If you live in an urban area and don’t need to drive to commute to work, then car sharing may be for you. Let’s take a look at the costs of both:
Costs of Car Ownership
- Monthly payment: $472
- Monthly insurance: $92
- Monthly gas, given $3 / gallon and 6.6k miles / year: $75
- Monthly maintenance: $42
- Assuming no parking expenses
This works out to a total of $680 / month ($8160 / year). I based these costs off from personal experience, owning a car in Boston, MA. Your costs may be different depending on where you live, what kind of car you drive, how much you drive a month, what kind of gas it needs, etc. Motley Fool did a recent article / analysis, where they peg the annual cost of owning a car at $9279.
Costs of Car Sharing
- Hourly rate, from $5 to $18, depending on which service, what metro area, the type of car, and day of week, and time of day
- Gas is typically included
- Insurance is included
- Maintenance is included
- Annual membership fee for some services: for example, Zipcar’s is $60; some have none
- You pay for tolls, just like with car ownership, so they aren’t counted
Why People Think Car Sharing is Expensive
Many people look at the hourly costs for car sharing services and think that they’re super expensive. This is because the costs for car sharing are explicit, meaning that you see the cost of using the car when you make the reservation and use the car. This is unlike owning a car, where most of the time the payments are either deducted automatically from your bank account (like for the auto payment) or you just pay once a year (like for the auto insurance). So, every additional time you drive an owned car, there is very little additional cost, since you only see your gas costs day to day.
How Much Could I Drive Using Car Sharing?
For the owned car example above ($680 / month), I could drive a car sharing car for:
- 136 hours a month (for the $5 / hour rate)
- 48 hours a month (for a $14 / hour rate)
- 37 hours a month (for a $18 / hour rate)
Given that I can take the subway to work and live in a walkable neighborhood, that’s a lot of driving!