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Save thousands by ditching the car

Want to go car-free but worry you'll still need wheels from time to time? Auto- and ride-sharing companies can help.

By Donna_Freedman Jan 15, 2013 12:45PM

Logo: Los Angeles, Calif., traffic on Interstate 405 (VisionsofAmerica/Joe Sohm/Digital Vision/Getty Images)The Avis Budget Group's recent purchase of auto-by-the-hour company Zipcar moves the rental-car behemoth closer to a new market: people who don't want to own a car but sometimes need a set of wheels.

Avis now joins Hertz and Enterprise in offering "car sharing," shorter-term usage vs. daily rentals.

Zipcar was a fairly symbolic purchase, since it was the world's largest car-sharing service. Other companies like IGO, Timecar and City CarShare still exist across the country for people who can't afford, or simply don't want to own, a vehicle.

A more recent trend is peer-to-peer car sharing, i.e., renting out your car when you aren’t using it through companies like RelayRides and Wheelz. A third option is on-demand ridesharing, via sites such as SideCar and Lyft.  


All are alternatives to the high cost of private auto ownership, which MSN Money columnist Liz Weston says is "wrecking (the) retirement" of many Americans.

"The average household shelled out $8,293, or 13% of its $63,985 pretax income, on transportation costs in 2011," including $2,669 for costs and car payments, $2,655 for gas and oil charges of $2,655, and $2,454 for other expenses, Weston writes. At the same time, most Americans are failing to save enough for retirement.

Big-time savings (usually)

With fees of $5 to $15 per hour, these services can be cheaper than cabs for suburban or city dwellers who want to make a monthly Costco run or do a bunch of errands in quick succession. A $5-an-hour P2P rental might even let you drive your partner to the airport vs. paying for a shuttle.

Rules and rates vary from company to company, but you will always need a current license and your driving background will be checked.

A couple of advantages:

  • The car-sharing companies pay for gasoline and insurance.
  • People under age 25, and maybe even as young as 18, may be able to rent without paying a premium. 
Note that car-sharing is best used for short periods of time, since an eight-hour usage could wind up costing more than a traditional auto rental. But for those who need a car only occasionally, sharing is smart.

Andrew Schrage of the Money Crashers personal finance blog used Zipcar for four years while living in Chicago. Ultimately he delayed purchasing a car for one year, saving him an estimated $7,000 in payments, gas, maintenance, insurance and parking (a big-ticket item in the Windy City). Schrage also liked reducing his "impact to the environment" during that time.

Borrow from a (new) friend

Peer-to-peer car sharing has existed since autos were invented, in the form of borrowing wheels from your brother or a buddy. Companies like RelayRides and Getaround have found a way to make this work between strangers.

Drivers must provide valid licenses and credit card information and agree to a record check --  not that different than doing a traditional car rental. Well, except for the price: During a recent trip to Boston, travel writer Dani Blanchette paid RelayRides just $20 for four hours of use.

"No ridiculous insurance (fees) . . . The price you read is the price you pay. I love it," says Blanchette, who wrote about her experience on her Going Nomadic blog.

 

A third option is on-demand ridesharing, which are app-based versions of the old college ride board. You state where you need to be and sites like SideCar and Lyft will find someone who's going that way and will let you ride along. These are "donation-based" services, i.e., there's no set fee; you pay what you think is fair.

The bottom line

Ditching your car and going with alternative auto scenarios only probably won't work for:

  • People with chronic illnesses or disabilities who require reliable, regular transportation.
  • Those who live far from work and/or needed services.
  • Residents of areas with little to no public transit (or, for that matter, car-sharing services).
  • Folks with several kids on different schedules.
  • Workers whose jobs require them to drive.
  • Those who simply like owning their own vehicles.

However, car-sharing might help pare a two-car family down to one, whether that's to decrease a carbon footprint or to bolster the economic bottom line. What could you do with an additional $8,000 a year?

To find auto- and ride-sharing services in the U.S., Canada and abroad, visit CarSharing.net.

 

Readers: Are you in a position to choose the car-free life? Would services like ZipCar and RelayRides make it easier to do so?

More from MSN Money:

9Comments
Jan 15, 2013 9:54PM
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Bus doesn't work for those who live in small town or rural areas and MUST commute to work or school (or both). Carpools can help, as can dial-a-ride if you only need it periodically. Bottom line? If you live in a CITY, living without a car could be a good option. For MOST Americans in the lower 48, Alaska and Hawaii who don't live in a major metropolitan area and who don't work from home, a car is something of a necessity. Of course, it needn't be brand spanking new with all the bells & whistles, etc.
Jan 15, 2013 8:46PM
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Ride the bus.You meet the most interesting people on city bus.
Jan 15, 2013 5:55PM
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Always with the rose colored glasses when talking about alternative and public transportation.  5 mile bike ride 10 or 110 degree weather makes for a pleasant work day.  Ladies, ignore creepy smelly homeless guy staring at you while trying to bite his own face.  He's harmless, right?  Share a ride with someone you never met!  Sounds like a blast right, and you'll be best friends forever.

Jan 15, 2013 8:09PM
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Four adults in my household, including two college students,14 miles minimum to work and/or school. Husband carpools every other day, sons take bus to school. We have 3 vehicles, 2 from 2000 owned outright and one new to replace husband's 2000 small sedan with 220,000+ mileage (lived in So.Cal for 2 years when car was new, 2+ hour commute for husband each way). I rarely drive out of town. Insurance is lowest available through college alumni program. If one lives in a city and public transportation is widely available, cars aren't a big necessity. If one lives in a small town (as we do), rurally (as much of our family does), or a distance from work due to lower housing costs, a car truly IS necessary. Some may be able to rely on family and friends for occasional transportation beyond the norm when working from home, carpools are a plus, and public transportation is fantasticly frugal when available, yet one size does NOT fit all. I currently don't know many people (if any) who could live comfortably without a car.
Jan 15, 2013 7:31PM
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I'm saving up for a Segway, I live a mile from work and the grocery store.  They work in the snow also!
Jan 20, 2013 4:24PM
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I Live in the Los Angeles basin and I can tell you, taking the bus is fine if your job is local.

I tried this once, from Pasadena to Puente Hills (a 20 min trip by car) took 4 hrs to go 30 miles.........

NOT feasible for those that have families and lives.

Right now, if I ditch the car the wife has to walk to work through a not-so-nice area of town........I have no issue, I can fight with the best if needed, but she is a small woman with no combat skills and even less in observation and situational awareness...and there have been assaults in the area on women.......nope, car is needed in this city........make the bus systems faster then we have an option.  

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Donna Freedman

Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.

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