Tip For Saving On Car Costs: Don't Buy, Rent
The American Automobile Association estimates the average yearly cost of owning a car (based on 15,000 miles of driving) at $7,834. Check out this guy's method of dropping that figure five-fold:
Roy Zinkil, a mortgage banker in San Diego, says that he doesn't own a car, but that he rents one every Thursday through Monday to "run to the store and the cleaners and do all those errands you do on the weekends." He rides a commuter train to work during the week and pays $128 a month, or $1,536 a year, in rental fees. "I put pencil to paper and saw that it was a better deal for me to rent." Mr. Zinkil said he gets good rates because he rents on weekends, is a regular customer at a rental location within walking distance of his office and is willing to take just about any car that's available: "I'm not picky; it's transportation."
If it would be at all possible to get through the week without owning a car (don't forget taxis!), this is definitely an option worth looking into.
The profile above was taken from a very good article on the subject in The New York Times, where you can find some more specific tips for making this work.
(photo: Ben McLeod)
Comments
Love this post. With insurance and parking costs, never mind the actual cost of the car and gas, it makes sense for me to rent a car for a couple weekends a month rather than own my own. Also, for people in larger cities (and some college towns) there's the ZipCar and FlexCar options.
I also think this post is right on the money. My wife and I only have one car. Right now I am in law school and ride the bus to school every day. Due to parking at our university, I think I actually walk less than my classmates who drive to school. Plus I don't have to pay $200+ for a parking permit.
I have two legal internships this summer, and my wife and I specifically looked for a place to stay that is on the light rail system. I have a 5 minute walk to the train, 25 minutes to downtown, then hop off right at the office.
I'm not a tree hugger or anything, but I can't see why people feel the need to have a car at their disposal 24/7. It's just much more economical to use mass transit & share one car, rent, or do the ZipCar option.
The NYT article talks about insurance discounts if you already own a car but not if you don't own one. In my experience, the best insurance deal if you don't already have car insurance is to reserve and pay the deposit on the rental car with a "Platinum" Visa or Mastercard that has rental car insurance as one of its perks. When you turn the car in (accident free) you can then pay the tab with another card such as a debit card and the 'hold' is removed from your Platinum card. Should you have an accident though it's wise to complete the transaction with the platinum card since the insurance usually requires you to 'complete the entire transaction' using the card for the insurance to be valid.
Living in Japan where public transportation is wonderfully efficient, I dread the idea of having to purchase a car when I return back. This may be a good compromise...
Where does Leasing fit into the picture?
Dion
Leasing fits into the picture as "even worse idea than buying". You prepay the 36,000 mile depreciation of your car whether you drive it or not.
Guide To Car Insurance
Here is a useful guide to car insurance. Buying car or motor insurance is important as it is legally enforced in the UK . You are required by law to have a policy to cover your liability to other road users.
Car Insurance protects motorists and drivers against liability in the event of accidents they may cause. It can also provide cover for the motorist's own vehicle. If you are the cause of an accident the car insurance company will pay your liability to other people involved in the accident.