Here’s When It’s Cheaper to Use Lyft Instead of a Car
Car ownership is much more expensive than just a monthly payment. There is interest on car loans, insurance, depreciation , taxes, gas, maintenance, parking and more.
The median total cost of car ownership was $ 841 per month in 2017, according to Nerd Wallet calculations (AAA estimates it at $ 8,558 per year , excluding parking and tolls). This includes the average cost of paying for the car, insurance, maintenance, gas, and registration / fees. In addition, there are less specific costs, the amount of time you spend driving, cleaning and maintaining your vehicle, plus, in the first place, the stress of driving anywhere.
Business Insider puts it succinctly: “At first glance, spending so much money on a device that immediately starts to lose value, takes up a lot of our free time and is rarely used seems ridiculous.”
At these high costs, it can be tempting to ditch the car and take advantage of one of the many ride-sharing services available, such as Uber or Lyft, everywhere. Put math to work?
When it makes sense to trade your car for Lyft
For people living in densely populated areas with public transportation systems, switching is easier as more drivers and other options are available in addition to services. But prices are also higher, even with options available like Uber Pool and Lyft Line.
A 2014 NerdWallet report found that it is still cheaper for most people to have a car than to use UberX or Lyft everywhere. But there are some examples where this might make sense:
- If you don’t use your car very often
- If you have a very short road
- If you have a bad driving experience and a high level of insurance
- If you live in Detroit, Memphis, Miami, Providence, or Tampa Bay (where these ride-sharing services are generally more readily available)
This 2017 report analyzes the costs of weekly travel via shared service and a private car in the 20 largest metropolitan areas in the United States by population:
And if you value your time more than your ability to drive everywhere, it might make sense to ditch your car. You can use this calculator , which takes into account your assigned time value to see if it’s worth it for you.
There are other options besides Uber and Lyft. For example, with Zipcar, which charges people an hourly or daily fee plus a flat monthly car rental membership fee, users reported they were saving about $ 600 a month, according to CNBC .
When is the best time to leave the car
The 2014 NerdWallet report states that you should leave your car if:
- You are a parent
- You have a long road ahead (the US Census Bureau reports that the longest one-way travel time is on average over 34 minutes)
- There are no car rental services or car finder apps in your area.
- You live in Albuquerque, Austin, Cincinnati, San Antonio, or Tucson ( many other cities analyzed ).
As Business Insider points out, “If you buy a high-performance vehicle for less than $ 25,000 and drive more than 15,000 miles a year until it falls apart, then you should definitely buy a car if your goal is to save money.”
You can also reduce the amount of vehicles your family owns, especially if multiple people have the same timetables, as CNBC suggests.
Much of the upkeep of your vehicle is not only about cost, but also about convenience. Outside of major cities, our communities are built to travel everywhere to live daily life. And cars have long been a status symbol for, well, the driving force behind the American economy for a long time (oh, oddly enough, NerdWallet is proposing to abandon your car in Detroit).
But for young people without children, seniors or less active people looking to cut costs, handing over keys can make financial sense and save you the serious headaches associated with owning a car.