Have you found your bills getting more and more expensive recently? Cars especially can be a larger expense, and in some cases, it can feel like you’re not making money with a car when you’re spending so much monthly or you don’t use it enough to warrant the price tag.
It’s a common feeling among people in larger cities, and it may be tempting to wonder if you even need to own a car or if you can exclusively rely on rideshare services, like Uber or Lyft, to get around when you need to.
But is it possible to offset car ownership costs by taking rideshares? Trading the relatively predictable costs of car payments, insurance and fuel for surge pricing and inconsistent availability might be more of a headache for potential car owners than they think.
Let’s walk through how expensive it is to own a car and compare it with the expenses you’d face relying on Uber as your primary mode of car-based transportation, as well as some alternatives to Uber and Lyft that might offer even more flexibility, significant savings and even the ability to make money without getting rid of your car, if you already own one.
How expensive is owning a car?
Just how expensive is owning a car? It’s a complicated answer and one that depends on the specific person, their car and their location.
The most expensive state for car ownership is — no surprise — California, with the nation’s second-highest gas prices and third-highest repair costs. Car insurance costs in the Golden State aren’t the highest, but they’re still expensive at $2,462 per year on average. Nevada’s similarly high prices make it a tie for first, with Colorado rounding out the top three.
A handful of factors influence how much you’ll pay for your vehicle each year. One major factor is that new cars are more expensive to purchase now, especially compared to used vehicles. Financing those vehicles is costly, too, with higher interest rates on car loans.
But it’s not the only thing at play. Car ownership also includes several costs that aren’t hidden, but that you might not immediately consider when writing the check for your down payment. Paying for gas, auto insurance, annual registration and maintenance all play into your yearly expenses. You’ll also have to contend with depreciation, the decrease in your car’s overall value each year.
If you’ve never stopped to consider how much you’re paying for the privilege of owning a car, sit down and input your monthly payments into our car ownership cost calculator. The number might surprise you.
The cost of Ubering everywhere
If the cost of car ownership gave you the kind of sticker shock that has you reconsidering your choice to drive, your first instinct might be to avoid buying a car and just take an Uber everywhere. But relying on rideshare services alone isn’t necessarily the best bang for your buck, and you could be wondering if Uber is cheaper than owning a car, or if there’s another, better, solution.
Services like Uber and Lyft calculate your ride prices based on distance, time and demand. The app provides an estimated cost before you request a ride, but that cost isn’t always consistent. You may pay $25 for a particular trip on a Tuesday morning, but spend twice as much the next day due to increased demand through surge pricing.
Rideshare pricing will also vary based on the level of service. If you prefer to ride to your destination in the back of a luxury SUV or town car, you’ll pay for the appropriate level of service. You can save money with the basic service if you’re not picky. Just know that your driver might show up in an older vehicle that barely meets the rideshare company’s vehicle requirements.
In addition to upfront costs, you’ll also want to factor in tipping. You don’t have to tip your rideshare driver, but passengers and drivers can also rate one another. The last thing you want is to find yourself stranded because you didn’t tip your previous drivers, and now no one wants to pick you up.
Owning a car vs. Uber
So which one is cheaper, owning a car or relying on rideshare services?
There’s no convenient, one-size-fits-all answer. It depends on where you live and how often you need to leave the house. But let’s assume your daily commute won’t be impacted by surge pricing that much. In this situation, look at the average miles you travel each year. Then, consider your gas mileage and how much you usually pay to refuel. Factor in your car insurance premiums and maintenance costs. You should have a ballpark number — especially if you used our calculator.
Now multiply the cost of your typical daily Uber trips by the number of times you’d take them each week. Suppose you’re taking two weeks of vacation, so multiply your number of weekly trips by 50. That’s how much you might expect to pay, at a minimum, for regular Uber or Lyft usage.
Car sharing vs. Uber
Car ownership isn’t the only alternative to Uber. Instead of relying exclusively on Uber for a day when you need to run multiple errands or take a weekend getaway, consider car sharing.
What is car sharing? In essence, it’s like renting a car, in that you pay to use a vehicle for a day or more. However, instead of renting from a large company, you’re renting from a car owner in the city you’re in. Car sharing allows you to dodge many of the worst parts of Uber, like waiting for your ride and dealing with surge pricing. It allows you to move around town conveniently, but without the hassle of maintaining a vehicle of your own.
In addition to being a great way to get around town, car sharing is also a fantastic way for vehicle owners to make extra money without driving. When you share your car through Avail, you are guaranteed to earn at least $50 per week.
Here’s how car sharing works for borrowers: You reserve a vehicle through an easy-to-use app or website and pick it up from a nearby neighborhood or downtown location. Avail locations are self-service, so you just grab the keys from a key box and get on your way. After your reservation period, you return the car to the lot where you picked it up, with the same amount of gas as when you left.
Car sharing through Avail is often more convenient than relying on Uber or Lyft because you pay a single rate for an entire day or weekend. The daily mileage limit is generous, and you can choose your vehicle. If you need an SUV to help haul something from IKEA, you can borrow one. Or if you need a sedan for a quick weekend trip to a nearby city, you have plenty of options.
Because Chicago and Denver — Avail’s two service areas — are big cities and tourist destinations, borrowing a car through Avail can help you avoid one of the biggest pitfalls of Ubering during a busy weekend: surge pricing.
If you’ve never tried car sharing as an alternative to Uber or car rentals, give it a try to see if it works for your needs. Download the Avail app and sign up to find a convenient car rental today.