Ditch Your Car and Save
By: manybanking.com Staff

How much does your car cost you per year? Americans spend on average $8,003 per year to own and operate a vehicle, according to the most recent Consumer Expenditures, released in 2006 by the U.S. Bureau of Labor Statistics. That factors out to about $667 per month. Those costs include purchasing costs, gas costs, maintenance and other vehicle related expenses. If you’re looking for ways to shave down your monthly expenses, have you considered giving up your car?

If you commute to work everyday and there are no public transportation options, you may not be able to survive without your car. If you don’t have a long commute, however, you may find it’s easier to live without a car than you thought. These days, there are several alternatives to owning or leasing a car that allow you to maintain nearly the same level of convenience at substantial savings.

Car sharing was once a service that catered almost exclusively to college kids and twenty-somethings. Last year’s high gas prices and the general call to tighten belts throughout the country, however, have caused the car sharing industry to take off. Zipcar Inc., the world’s largest car sharing provider, has seen its membership grow by more than 50% in the last 12 months. Uncertainty throughout the economy has Americans looking to consume less and save more.

“Smart consumption is the new black. It seems to go with everything these days,” the CEO of Zipcar, Scott Griffith, told Reuters.

Zipcar works by parking cars strategically around city centers. It currently operates in 29 states and has cars in London, England and Canadian operations in Ontario and British Columbia. The fleet totals 5,500 vehicles, which service approximately 250,000 members throughout the network. Members pay an annual membership fee of $50 and a sign-up fee of $25 to gain access to the Zipcar network. They then reserve cars online and walk to the car’s location to pick it up. Swiping a membership card over the windshield unlocks the car. It costs about $10 an hour to use the car, and gas and insurance coverage is included in the fee.

Zipcars are perfect for running errands you can’t do with public transportation, such as trips to Costco (Stock Quote: COST) or visiting friends in the suburbs. Of course, for longer rental times, traditional car rental companies still offer good value for consumers. Those who choose to give up their car can still save money by only using daily car rentals when absolutely necessary. For example, if you want to take a weekend car trip.

The recent success of Zipcar has motivated some traditional vehicle rental companies including Hertz, Enterprise and U-Haul to delve into the car sharing market. Each of these companies is experimenting with car sharing models in limited markets. This is good news for consumers as competition will likely yield better prices.

In addition to car sharing and car renting, savings can be had by taking to two wheels instead of four. Biking to work has become increasingly popular and scooter sales soared in the high gas price environment of 2008. So, if you want to forego hundreds of dollars of month in car expenses, you don’t have to stay at home.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

Sign Up Now for Our FREE Newsletter
Search for Rates

US Rate Map - National Auto Loan Rates

Roll over states to see best rates.
Lower Rates Higher Rates

This illustration shows rates based on all terms and locations of a particular state. Products may not be offered by all institutions. Individual institutions determine the availability and required qualifications of their products. Product restrictions may apply.


Calculator Access our Savings, Mortgage, Auto Loan and Personal Finance Tools here.