Is Owning a Car Worth It?
With all the social, economic and technological changes, will we decide that it is actually cheaper to use alternative ways to get around other than driving? Is it worth owning a car now? What about in the future? Well, it depends.
A few years back, as ride-share services like Uber and Lyft became more popular, the decision of whether or not city residents should still own cars started to be more and more of a debate. The conversation continues, as investments in autonomous vehicles increase and the global pandemic raised issues that we maybe have not considered before. So, is owning a car worth it? Will it still be worth it a couple of years down the road? There are a few things to consider before we answer.
The response is highly dependent on location, in addition to other factors, of course. In some cities where public transit systems are less reliable and mobility operators are not so active, driving is still the best way to get around. Here, the costs caused by delays in getting from A to B add up to the total cost of not having a car. Also, renting a car can prove way more expensive than owning one. Walking or biking could also be solutions, but usually these options only cover a part of a daily commute.
In case you were wondering how much owning a car actually costs, the American Automobile Association offers some interesting numbers that get updated annually. The latest, from September 2019, show that the average annual cost of owning a new car was up 24 percent year-over-year to $9,282 or $773.50 a month. The jump was mostly linked to finance—higher interest rates and vehicle prices, in addition to fuel and maintenance costs. The composite average cost of car ownership per mile is 62 cents for a vehicle doing roughly 15,000 miles/year. The cost is down to 47 cents for a small sedan.
Float has made it one of its goals to help users decide easier and faster if they should keep their vehicle or if it would actually be cheaper to do without it. Reducing the number of driven miles and raising the ultimate sale value of their car are other goals for Float. In doing so, the platform analyzes user data linked to car and transportation costs, and based on it can suggest and facilitate various solutions for lower spending on parking, tolls, gas, insurance, maintenance. Also, it can assist users in using their vehicles to earn money or figure out if it’s better to sell them. Based on the results of the calculations that the platform will be making, the user will be able to decide whether it makes more financial sense for them to drive versus use ride-share apps.
Another major aspect that comes into play when discussing car ownership is environmental protection. Some people do not base their decision on buying (or keeping) a car solely on costs, but also on impact on the planet. Greener lifestyles that focus on personal and public health involve less driving and more biking or using public transit fueled by electricity (coming from alternative sources, ideally). Minimalists will also find the asset lite option more appealing.
Speaking of asset lite, four years ago, marketing guru and businessman Neil Patel wrote in a piece for Entrepreneur that for him, the decision of not owning a car was actually a business decision. He felt that owning a car—and driving—was distracting him from the things that really mattered to him: family, friends and his businesses. Patel explained how he prefers ride-share services because being a passenger allows him to be more productive.
“A 20-minute ride lets me produce 30 emails and conduct five phone conversations. That, in turn, makes me money. To drive myself those 20 minutes would be a net loss,” he wrote.
Staying safe during a pandemic is a major pro car ownership argument, as driving in one’s personal vehicle involves a lot less exposure than using public transit, for example. It’s been shown that the number of cars on the roads is quickly approaching pre-pandemic levels as opposed to bus and rail transportation, which is still down.
Whatever the choice, Float will help its users understand the financial impact of their decision and provide customized local travel solutions.