Would It Make Financial Sense to Drop A Car?

[This post originally appeared on my blog Think Of It As An Adventure.]

One of the things I love about the Longfellow neighborhood – and a big reason I wanted to live here – was its close proximity to everything. That made it possible, in 2010, for my husband and I make the decision to become a one-car household. In the past 7 years we’ve found that to be a pretty easy lifestyle change, with only an occasional inconvenience. In fact, it’s been so easy that I’ve begun to wonder if we’re ready to go even further and give up car ownership altogether.

The Dollars and Cents of Transportation (Including Carbon)

According to AAA, in 2017 the average auto driver spent $706 a month to own and operate their vehicle for an average of 15,000 miles. Think about it: that’s almost as much as the rent on an efficiency apartment in Minneapolis! And that figure doesn’t include the cost of car payments – or the cost of its associated carbon footprint.

So what does transportation cost my two-person family? I took a look at NerdWallet’s Car Cost Calculator and then factored in the rest of our transportation costs.

  • Gas: Our car gets about 25 mpg in the city. We drive 6,000 to 7,000 miles a year so we used about 280 gallons of gas @ $2.30/gallon = $644/yr. Let’s account for the full cost of that gas by looking at the amount of CO2 we produced. Burning a gallon of E10 gas produces 18.9 pounds of CO2 so our 280 gallons produced 5,292 pounds of carbon, or 2.6 tons. If we carbon-tax ourselves at, let’s say $40 per ton, we’d pay an extra $104/yr.
  • Insurance for two: about $1,200/yr
  • Maintenance and repairs: If the past 6 months are typical, it would be about $200 a month or $2,400 /yr
  • Car Payment: Zero, our car is 12 years old.
  • Parking: $20/month or $240/yr
  • Taxes: $45/yr

Car Ownership = $5,381/yr

We also use mass transit. We spend $80 a month ($960/yr) to take the bus and light rail, which saves us, at minimum, $120 a month in parking ($1,440/yr) and the absolute nightmare of driving downtown. We hopped on the bus to get to the Ordway last month and saved parking and a whole lot of hassle fighting traffic with all the sports events occurring that night!

Taking the bus shaves 30% off my husbad’s work-related carbon footprint, according to Transit Screen. Taking the light rail shaves another 30%. Driving fewer miles keeps our insurance lower, too.

Total Transit Cost Per Year: $6,341/yr

What if we dropped our other car and …

  • Took the Bus: Bought one all-you-can-ride monthly bus card and one stored-value card for when we need to travel together ($103/month or $1,236/yr)
  • Biked more: Peter could ride his bike to work to save money from May-October, while finally getting in some exercise. His employer offers a secure bike garage at his building so he would pay nothing. (If his employer didn’t have the locker option, he could rent a bike locker from Metro Transit.) (-$120/yr)
  • Used Hour Car Sharing Service: $8.50 an hour and 100 miles free (no charge for gas or miles) with $55/yr fee (x 2). We’d need to bus to the closest car sharing hub about 2 miles away.  If I used a car 3 days a week for maybe 8 hours that would be $292/month or $3,504/yr. Hour Car provides insurance so we’d save (-$1,200). Hour Car pays for the gas, too, so we wouldn’t spend -$644. If I still drove the same number of miles, I’d still have the same carbon footprint ($104 carbon tax) and I’d still be paying to park ($240/yr).
  • Rented a car for vacation: We could borrow a friend’s car for a few days or we could rent an Hour Car for $75 a day for the weekend, or rent a car at the airport for $350 a week. Last year we took a 2-week trip and traveled by train and bus. If we had to plan separately for transportation, it would make us more aware of the true cost of our trip.

Transit Cost Without Car Ownership: $5,074/yr -$5,194

Cost for Convenience: around $1,147-$1,267

That’s not as much of a difference as I expected. And if we took a 2-week vacation and paid to rent a car, it would be half that savings. But it’s possible that making this change would result in more changes. That we’d look for opportunities to carpool, or we’d drive even less.

We’ve talked it over and we’re going to try a month-long no-car challenge to see how it goes.

Leslie MacKenzie

About Leslie MacKenzie

Leslie lives in the bungalow neighborhood of Longfellow, South Minneapolis, one block from the Midtown Greenway. She and her husband are organizers of a neighborhood sustainability group, Transition Longfellow, and Leslie also works with Transition Twin Cities. She blogs on energy, gardening, and sustainability topics at https://thinkofitasanadventure.com/.

15 thoughts on “Would It Make Financial Sense to Drop A Car?

  1. Daniel Hartigkingledion

    Great analysis! A quibble on methodology, though. I think you should pro-rate your vehicle’s cost over the life of the car. I have a 2007 Toyota Tacoma that I bought new for $15,500. I have already gotten 10 years out of it, so its prorated cost comes to $1550 per year, so far. If I expect the truck to last 10 more years (and I do), then its pro-rated cost is $775 per years. I think you should add that to the car ownership cost, which will make your savings from dropping the car a bit more. Remember, you will get some money from selling the car!

    Other note, are you really paying $2400 per year for maintenance? That is pretty unsustainable. I doubt I’ve paid that much in the last 5 years.

    1. Leslie MacKenzieLeslie MacKenzie Post author

      That’s a good point about prorating the cost. I didn’t add it in because the article that originally sparked this look at cost didn’t include the car payments. And sadly, yes, I will pay $2400 this year for maintenance and repairs. I don’t every year.

  2. Davis Parker

    I have walked through very similar numbers for our own situation. The other big cost of car transit is that of purchasing/leasing the car. Yours is paid off, so isn’t a regular expense but should be accounted for. Presumably one would need to buy another car at some point to continue driving, even if yours still has some good years of life left! Very roughly if you figure buying ~$10,000 car every ten years, that basically doubles the savings of going car-less.

  3. Aaron Berger

    Leslie, have you considered an electric bike or moped as a car replacement – at least when there’s no ice on the ground? I have been looking recently and I am impressed with the range – a local company sells a bike they say gets 40 miles per charge for $1200. Combined with a trailer I would think an e-bike could do many of the things a car can do.

    1. Leslie MacKenzieLeslie MacKenzie Post author

      Thanks for the thoughts, Aaron. I do now have an electric bike (after motor scooter and bike were stolen). And I have an Aesom bike trailer that I use to haul loads, like a trip to the plant store or the grocery store. That is definitely part of the reasoning behind trying to go car-free. I tried out e-bikes at the Midwest Renewable Energy Fair, where they have several vendors and more than a dozen different models of e-bike.

      1. Aaron Berger

        I’m sorry to hear you had a motor scooter and bike stolen! How maddening. I’m glad to hear an e-bike and trailer is working for you. I will admit to being a little e-bike crazy right now…

        1. Rosa

          theft/security is the biggest practical biking issue for me – I’m kind of over the theft of an entire bike, I just kind of figure a new bike every 3 years or so into the cost of bike commuting to downtown – but the vulnerability of bike parts to theft is a convenience/time issue – forget to take off your lights and they get stolen and you have no lights to get home (a big issue for me, since I often work until bar close in summer), plus I’ve had my brake wires slashed, my seat stolen (that’s not great, but I can bike home standing up or sitting on my cargo rack) and once the entire rear tire assemblage. And since I’ve for years bike commuted on weekends to jobs near a football stadium, twice I’ve had drunken fans completely ruin a bike – pee, beer, and stomping on the tires to break them.

          But more than that, not having a trunk is a PITA. Like I can’t hit the liquor store on the way to the elementary school on my bike, because I can’t take beer into school with me and I can’t leave it on the bike securely, either. I can go to the dollar store and then Target – once someone stole my bag of dollar store art supplies but oh well – but not really the other way around. I can fit all the cargo I need onto my Radish or into a trailer but I can’t leave it safely parked while I run other errands. There are some lock-to-the-bike options for small objects but nothing’s as secure as the trunk of a car.

  4. Hōkan

    I too live in Longfellow and it’s been 15 years since my car died. I said then that I’d get another car when I need to, I just haven’t needed to yet.

    Mostly bicycling to get around I do rent a car a few times a year and on rare occasions I’ll take the bus.

    It’s great having all that money not going towards the steel trap!

  5. Matty LangMatty Lang

    Great article, Leslie! I have used Turo to rent a car when I need one for longer time periods. It’s like air B and B but for cars. I usually can find one for a price comparable to or lower than rental companies and a pick up-drop off location much closer to me than the airport.

  6. Justin Doescher

    Dropped my car in 2013, been a life changer to go down to one car. Saves a ton of money and makes me bike and walk more.

  7. Ashley

    Writing from a one car household adjacent to Longfellow. I really do appreciate the options in our area. Something important to note with HourCar, only 100 miles are free per day. After that, it’s $.30 cents per mile. Taking it on a vacation can add up pretty fast, as I recently discovered when planning a trip to Duluth (Jefferson Lines bus runs there for a decent price – $45 round trip).

  8. Daughter Number Three

    What I would like is a calculator that makes it relatively easy for people to do what you just did, Leslie. And separately, a way to really understand the particulars of transit access from home to the key places people need to go.

    I guess I should write a grant request to some foundation.

  9. Tim BrackettModerator  

    Where did you get the $350 figure for a week’s car rental? I rented through Enterprise last summer for $140–I only needed the car for four days, but I guess if the rental is longer than three days you automatically get the car for a week.
    Also, I’ve used Jefferson Lines to travel around the Midwest a few times. I’ve gone as far as Springfield, Missouri. In the right circumstances, it can save money compared to a car rental + gas/parking.
    (edit: I apologize. I did not realize renting at the actual airport is so much more expensive than using the Enterprise office down the road from where I live.)

  10. Jenny WernessJ BModerator  

    I love your analysis, and I’m so glad you wrote it up here! I did a similar analysis last year and found that I a huge financial incentive to ditch my car. I was still making car payments on it, so that made a big difference. It’s saved me an average of $400/month over the past year, and that includes costs for renting cars, occasional Lyft, and transit.

    In the year since I sold my car, I’ve primarily biked, so I also included “bike costs” of ~ $100/month in my financial analysis. So far that has mostly gone to building up my bike tools and winter-specific bike stuff, and some maintenance.

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