You may never have had your own chauffeur. In fact, if you’re over the age of 50, you’ve probably always either owned or leased your car. Yes, you may also have taken public transportation (bus, train, tram, etc.), rented a car, used a ride service like Lyft or Uber, and maybe even used a car sharing company like Zipcar. But your primary mode of transportation has probably always been a car that you owned or leased.
Well, it’s time to re-think how you move around. Have you really thought about what the true cost is? How certain are you that owning or renting a car is the most cost-effective solution?
Let’s consider some different transportation options, and their cost.
Most Americans own a car. This is particularly true in the western states, where cities and towns are spread out, the road system is extensive and public transportation is still not as efficient as it is on the east coast.
The costs of owning a car are many, and include: the vehicle itself, fuel, insurance, maintenance, registration and, for many, parking. Also, unless you buy a collectible, the car will surely depreciate in value while you own it.
Rather than buy a car, you could lease one. Leases have historically been popular for businesses, because there were tax advantages associated with leasing versus to owning.
When you lease a vehicle, you are essentially renting it for a period of time. You pay the leasing company for the use of the car, through monthly lease payments. You also pay for fuel, basic maintenance (e.g. oil changes) and tires. You’re also required to insure it. There is no deprecation to worry about, because you do not own the car.
For people who drive less than about 12,000 miles each year, leasing may be less expensive than owning a car. It can also be attractive for drivers who feel compelled to drive cars with the latest technology and safety features.
Perhaps you don’t need a car very often, because you mainly use public transportation to get around. But, on occasion, you need one to move your stuff, or you want to make a longer trip out of the area. You could rent a car.
You already know about the traditional way to rent a car. When you rent, you’re financially responsible for the rental cost (per day, per week, or per month), insuring it and paying for fuel. The car rental company handles vehicle maintenance. Because you’re renting, there is no depreciation cost to you.
Another option is Zipcar, which allows you to rent a car for very short-term use. You pay by the hour, by the day, or by the month. With Zipcar, you use a membership card that allows you to access their vehicles that are strategically located throughout certain metropolitan areas. The Zipcar membership includes 180 miles per day. There’s a special payment card inside the car that’s used to pay for gas. Zipcar insures the vehicle and provides roadside assistance. Again, because you’re renting, depreciation is not a factor.
What if you live in a large metropolitan area, and you don’t take long trips out of the area? If you don’t want to take public transportation, you might consider a ride service like Uber or Lyft. These services provide on-demand transportation by companies that hire part-time drivers. You can request a ride from your current location to another in the area, and a car will generally arrive within minutes.
So, you could avoid all of the costs of owning or leasing. It costs $2 per mile, on average, to use a ride service. So, if you needed 200 miles of transportation each month, the cost would be approximately $400. This will likely be much less than you would spend on owning or leasing a car.
DRIVERLESS RIDE SERVICE
You may have heard about the next generation of transportation options. Imagine using your technology device in your hand (often referred to as a mobile phone) to summon a car to your location. However, instead of being greeted by a “gig” driver from a ride service company, the car is driverless. You get in, close the door and the vehicle (playing your favorite music) takes off to your selected destination. When you arrive, you step out, and the service is complete.
You would have a subscription for this service, and probably use it for all of your local transportation needs. You wouldn’t pay for any of the costs traditionally associated with owning a car. This may sound futuristic, but it will likely be viable within your lifetime.
We would be remiss if we didn’t acknowledge that here are still more ways to get around. They include public transportation, like buses, light rail, trams, street cars, trolleys, and ferries. You may also one day be able to travel by drone or air taxi, though that’s probably still far off in the “Jetsons” age.
For the truly adventurous, you can rent bikes (human-powered and electric), Segways, and skateboards (human-powered and electric) and scooters.
Lastly, you might just decide to walk.