By Autumn Cafiero Giusti
At a time when two- and three-car families are the norm, getting rid of one or more vehicles might seem daunting.
But if you’re willing to make a few tradeoffs, experts say, downsizing a few sets of wheels can yield sizeable savings for your household.
In addition to regular car payments, fuel, state fees, financing costs, maintenance, repairs, insurance and depreciation account for a considerable amount of your out-of-pocket expenses when it comes to owning a vehicle.
Based on these factors, according to Kelley Blue Book, the five-year cost to own a 2014 Honda Accord comes out to $33,593. That’s in addition to the $21,441 purchase price of the car.
“From our perspective, having more cars than you need in your household is going to be a costly endeavor,” says Alec Gutierrez, senior analyst with Kelley Blue Book. “Having the number of vehicles in your house right sized is critically important.”
Here are five ways to become a household with fewer cars:
1. Re-evaluate your lifestyle.
Lifestyle choices such as where you live and work and when you commute can factor heavily into the need for additional cars. Eric Tyson, author of “Personal Finance for Dummies,” says to examine your work schedule. Some families might be able to coordinate their schedules in a way that makes sharing one commute possible. “If you’re a married couple, you should really stop and think about whether you need two cars based on where you live and what your daily needs are,” Tyson says.
There’s also an opportunity to downsize if one of the adults in your household doesn’t work outside the home or works within walking distance or near public transit, he says.
If you’re planning a move in the near future, transportation should be one of the factors you consider in choosing a place to live. Urban areas, for example, are more conducive to using public transportation instead of a car. “The need for so many cars could be driven, in part, by you choosing a place to live that is not very convenient or centrally located,” Tyson says.
2. Let go of that old car.
If you’ve just purchased a new car, experts say it doesn’t make sense to hang on to your older model just because it’s paid off.
“I find that over time, some families accumulate cars. If they get a new car, they’ll just keep the old one, reasoning that it’s paid for and not costing that much,” says Tyson.
Even if the car is paid off and you don’t drive it around very often, operating expenses and maintenance can rack up big bills – especially if the car is more than five years old. “It’s really all of those ongoing expenses that are going to start to add up over time,” says Gutierrez.
3. Share the wheel with your kids.
These days it’s not unusual to see families with one car for each adult. But buying a car for your children can ultimately send them the wrong message, Tyson says. “Honestly, I can’t think of a worse thing to do than to buy a kid their own car. It’s an expensive luxury, especially if you’re handing a brand new, expensive car to a kid who hasn’t worked for it,” he says.
A better idea is to share your car with your teenage driver, Tyson says. “This reinforces that this is your car that you bought and paid for. You can use it when it works for our family, but that doesn’t mean you get to use it all the time,” he says.
For some families, there’s no getting out of the multi-car scenario because of conflicting work and school schedules. “But in some cases, that’s not necessary,” Tyson says.
4. Consider a car-sharing or ride-sharing program.
Car sharing and ride sharing programs have grown steadily in the past decade, providing an alternative to car rental and making it easier for individuals to go “car-light” or even car free. Once relegated to major cities, these programs have been expanding their reach to more metro areas and communities.
First, it’s important to know the difference between ride sharing and car sharing. While both services help provide transportation, they are very different, says Harry Campbell, who runs the blog and podcast TheRideShareGuy.com. “Car sharing is a cross between car rental and a library card. As long as there is a car available and you are a member of the service, you can check out the car. Ride sharing is similar to a taxi service, except it is much easier to request a ride. With ride share, a person drives you from place to place,” Campbell says. Lyft and UberX are two examples of ride-share programs.
One car-sharing program, Zipcar, has vehicles in more than 470 cities worldwide.
Relying on car sharing instead of your own vehicle requires a little planning and works best when used in tandem with other modes of transportation, says Zipcar spokeswoman Lindsay Wester.
“Zipcar is one part of a complete ‘transportation portfolio,’ so if you are ditching a car, we suggest thinking about all of the ways you plan to get around – invest in a bicycle for short trips, learn the best walking routes, become familiar with public transit,” she says.
And for occasions when you need a set of wheels, that’s where a sharing program comes in. Off-site business meetings, trips to the grocery store and weekend getaways are among the more common applications of ride sharing.
Wester says Zipcar members report savings of up to $600 a month since they no longer have to make car payments or pay for gas, maintenance or insurance.
Some individuals might actually be surprised to discover how little they use their car. Wester says the average owned vehicle sits idle up to 23 hours a day. “Write out what it is you need your vehicle for, and then figure out other ways of getting around,” she says.
If you take public transportation most of the time, Campbell says car sharing can be ideal because you don’t have to pay for a parking spot, and you won’t be making monthly payments on a vehicle that starts to depreciate as soon as you purchase it. “For a great number of people in big cities, car sharing is a fantastic solution for the occasional transportation need,” Campbell says.
Just remember to return the cars on time and with the same amount of gas, Campbell says. Otherwise, you might face extra fees.
5. Explore all of your transportation options.
Before ultimately deciding whether to park one of your cars for good, experts advise taking stock of all of the options at your disposal for getting from place to place. In addition to ride sharing programs, public transit, taxicabs, bicycling and carpooling are a few possibilities.
Relying on multiple forms of transportation can help, although some individuals have more modes of transportation to choose from than others.
“If you live in a city, you’ve obviously got more public transit options,” Tyson says.
Carpooling is another alternative, especially for suburbanites who are further removed from transit systems. “I know for many years my dad commuted to his job with someone else in our town who worked for the same company. You can find ways to share a ride,” Tyson says.
If you don’t need a second car that often, relying on a cab or driver service such as Uber can be a solution for occasional transportation needs.
If you do decide that getting rid of a car simply isn’t possible, Gutierrez suggests looking into leasing a vehicle. He says lease payments can be comparable to public transportation costs if you choose a smaller car.
“Leasing is very popular and affordable. We live in Irvine, Calif., and have a lot of folks who work in San Diego and take the train. A one-month pass is around $150 to $200, which is about the same cost as leasing a small sub-compact car,” he says.
Owning a car of course means paying additional expenses to maintain it, but in some cases getting rid of the car won’t save you a ton of money, Gutierrez says. “There are areas where you’re going to win and where you’re going to lose,” he says.
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