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Spirit of Money: Buying Versus Sharing a Car

My husband and I commute via subway and put only a few thousand miles a year on our 15-year-old car. Now that it's on its last leg, we're debating whether it would be cheaper to buy a new car (and take care of it, just like our old one) or join a car-sharing service. What's your advice?

--Eve L., Washington, D.C.

Answer:

As you're obviously aware, car-sharing companies make a fleet of cars available at various spots around a given urban environment. You pay a nominal annual fee for the right to use the cars, and then pay only for the hours you use it. For someone in your situation, I would say yes, without a doubt, you should go this route rather than buy new. Environmentally it's a slam dunk: Research has shown that each car-sharing vehicle removes anywhere from 6 to 23 vehicles from the road, which means less greenhouse gases, smog, and congestion.

But environmental issues aside, is car sharing cheaper? Again that's probably a yes, although it's a little more complicated and depends on the cost of your new car, how long you'll keep it, and how much you'll drive. Where you live, in D.C., you can join Zipcar for $50 a year (plus a one-time $25 registration fee) and reserve a car for $9 an hour. (For a list of car-sharing companies across the country, see carsharing.net.) If you were to drive, say, eight hours a week, you'd pay $72, or a little over $3,800 (including the registration fee and annual membership) a year. In about six years, that would add up to the cost of a reasonably priced new car. But keep in mind, that's six years of not paying for gas, repairs, insurance, or registration, which will easily tally into the thousands. (According to a 2007 AAA study, someone who owns a vehicle and drives 15,000 miles a year spends $652 a month on car expenses. That includes the monthly payment and all those extras mentioned above.)

Here are a few other reasons you might like car-sharing:

It makes you realize how much you drive.
When you own a car, it's easy to hop in and run out for a quick jaunt to the corner store. If you have to reserve a car and pay for that jaunt, you might just walk or bike. That might sound inconvenient, but you may find over time that you prefer it, and either way your health benefits.

It's fun.
You don't have just one car; you have a fleet. Need a larger vehicle to haul something home from the store? You've got one. Feel like trying out a hybrid vehicle? You've got one. Need to drive some friends around in an SUV? You've got one. As a test run, why not give car-sharing a try while your current car is still breathing? Pledge to keep your car in the garage for two months and just use Zipcar. Keep a journal of how much you spend, and compare that to how much you'll spend on a new car (keeping related expenses like repairs and insurance in mind). Think about how car-sharing makes you feel. I suspect those two months will convert you into Zipcar fans.

Text by Tracy Fernandez

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