By on August 23, 2018

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Say you’re an urbanite who made the decision to leave the perils and unexpected expenses of car ownership begin and rely only on your phone. A money-saving choice? Not necessarily, according to a study the American Automobile Association.

Drawing information from numerous studies, AAA’s report looks at the cost of owning a vehicle versus the cost of replacing those same trips with a ride-hailing app and infrequent car rental. It’s not even close, but, as the saying goes, your mileage may vary.

The study focused only on urban dwellers, who, according to a previous study, drive an average of 10,841 miles annually. As we’re dealing with averages here, the vehicle in question is a medium-sized sedan. Amassing data from the AAA Foundation for Traffic Safety, the study found the average cost of ownership for this faceless sedan (including maintenance, fuel, insurance, vehicle payments) amounts to $7,321 a year, or $10,049 after factoring in parking charges.

If those same drivers replaced their total miles driven with ride-hailing apps and a few key rentals, the average annual cost comes to $20,118, or $1.86 per mile — far less than the $0.93 cost of owning a vehicle and paying for parking.

Just to bolster the ride-hailing side of the study, AAA found that the average car-less urbanite in possession of a driver’s license makes 2.1 road trips a year, totalling 11 days and 1,476 miles. Naturally, there’s a fair bit of variability in what it costs to travel by hailed car in these 20 cities. Total annual cost, including those rentals, amounted to $16,944 in Dallas, whereas Bostonians stand to spend $27,545.

On the car owner’s side, just as much variability exists. Some choose to own a large SUV or trucks; others, a Hyundai Accent or Mitsubishi Mirage. Fuel economy spans the gamut, as do miles driven, some vehicles are more reliable than others, and some drivers own their car outright. Average parking costs range from $706 in Phoenix to over eight grand in New York City.

While AAA’s study provides an interesting look at averages, what’s missing from the data is the option of not driving at all. Many urbanites have access to rapid transit within walking distance from their home or place of work, and this study admittedly doesn’t take that into account. Few people living with a subway or commuter train close at hand would take an Uber into work every single morning, as they’d probably get there late.

Transit and cycling, where it’s a viable option, easily supplements vehicle trips, lowering overall transportation costs for car owners and abstainers alike. As well, looking just at car owners, how many miles driven are necessary miles? We all take the long way home from time to time, or just go for a drive with no destination in mind. This eats up plenty of miles, but we do it because we can. No one hails a Lyft and tells the driver, “Never mind the route I asked for. Just take me for a ride.”

For car owners, buying groceries at the nearest store isn’t a necessity. We’ll drive past four grocery stores to get to the one we like better — the one with those amazing sales on ground beef. Again, more miles, but not necessary ones.

Everyone weighs their options and ends up making choices that works for their particular situation. But the study offers food for thought for members of the anti-car crowd who live too busy a life to stand on the side of the road, waiting for a bus.

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43 Comments on “Feeling Average? Study Shows Owning a Car Is Still the Cheapest Way to Get to Your Destination In a Car...”


  • avatar
    jmo2

    I assume they started the study with the conclusion already decided. The key in most cases would be the commute. If you’re already taking public transit, riding your bike, walking, etc. to work (or working from home) then Uber and renting a car is going to be substantially cheaper than owning a car.

    • 0 avatar
      2drsedanman

      Agreed. There are so many variables on both sides of this equation. There is really no way to make a valid comparison. I would think in general, if you live in a city where you could walk, bike, or rent a car, this would be cheaper than the upkeep, parking, maintenance, etc of owning a car. But considering who authored the study, the conclusion is to be expected.

    • 0 avatar
      Featherston

      +2, and I’m disappointed in myself for even clicking on the link to this article.

      Furthermore, the premise that “urban dwellers” drive an average of 10,841 miles annually is extremely suspect. AAA must be using an incredibly broad definition of “urban.”

  • avatar
    MrGreenMan

    “For car owners, buying groceries at the nearest store isn’t a necessity. We’ll drive past four grocery stores to get to the one we like better — the one with those amazing sales on ground beef. Again, more miles, but not necessary ones.”

    Did you miss intro to calculus? Depending on the amount of beef you buy, the savings per pound, the cost per mile of transportation, and the distance to the store with the better price, you might be stupid not to drive the extra miles.

  • avatar
    notapreppie

    “Study Shows Owning a Car Is Still the Cheapest Way to Get to Your Destination In a Car”

    As opposed to not owning a car and having to buy one so you can get to your destination in a car?

  • avatar
    TR4

    So using what is essentially a taxi service to go everywhere is more expensive than your own car? Whoulda thunk!

    BTW, in the fourth paragraph, “far less” should be “far more”.

    • 0 avatar
      Prove your humanity: 9 + 8 =

      “…who made the decision to leave the perils and unexpected expenses of car ownership begin” should be “…ownership behind”.

      “Again, more miles, but not necessary ones.” ????

      “Transit and cycling, where it’s a viable option, easily supplements vehicle trips” supplement (plural: transit and cycling)

      Just take the time to print out your article, set it aside for a few minutes, then read it slowly and carefully before submitting it. We’ll all be the better for it.

  • avatar
    Lie2me

    ” according to a study the American Automobile Association.”

    Yeah, and owning a house is better then renting according to the National Association of Homebuilders

    Got it

    • 0 avatar
      28-Cars-Later

      Let the rent vs own debate begin!

      • 0 avatar
        Lie2me

        It varies, a lot on circumstance and location. Just like what the “ideal” car is. One size does not fit all

        • 0 avatar
          PrincipalDan

          It is very situational.

          Many who would look at the combined household income of my wife and I would be shocked to see we are renting but our rent is cheaper per month than a mortgage AND it is very nice when something breaks to have someone else paying to fix it. The lower payment leaves more money to be put toward student loan payments and socking something away in the savings every paycheck.

          Plus now that we are largely back to requiring substantial down payments for mortgages (which is as it should be IMHO) – it does make home ownership more difficult when you need to pony up a double digit percentage as the down payment.

          • 0 avatar
            Lie2me

            I’m sure you’ve examined all the pros and cons and are doing what’s right for you. Never let anyone who’s not paying your bills tell you different

        • 0 avatar
          Lou_BC

          “Just like what the “ideal” car is.”

          Statistically, it is looking more like the ideal “truck” as opposed to ideal “car”.

      • 0 avatar
        Prove your humanity: 9 + 8 =

        Even cheaper than renting or buying is borrowing. Or living at your parents’ house and using their car (at great cost to your dignity, pride and privacy).

        We’ll leave stealing cars out of the options considered.

    • 0 avatar
      krhodes1

      Rent vs. own is entirely location dependent. In both my summer and winter locales, the cost of renting is frankly, [email protected] insane. Houses aren’t THAT cheap in urban Maine, but renting is nuts – like $2000+/mo for a two-bedroom apartment. In Florida, it’s even more out of whack – my $90K house would rent for $1400+/mo. But it is all local factors that drive this in both places. In Maine, just not enough rental units. In Florida, that, plus if you own you are on the hook for very expensive insurance, tons of seasonal demand taking units off the market for year-round rentals, and just plain not many people being able to qualify for mortgages/scrape up a down payment in an area with few good paying jobs, even though houses are cheap.

    • 0 avatar
      vagvoba

      The NAH will be just as happy if you rent your place. They don’t care about who owns the building as long as they are being built.

  • avatar
    dwford

    As a full time Uber driver, I see many people using Uber as their way to get to work. Most of them only commute a few miles within my city. For them, It’s about $10-15 per trip, or $20-30 per day, $400-600 per month. You don’t get much of a car for $400-600 a month once you factor in the monthly payment, insurance, gas, taxes, repairs.

    This is a pretty biased study.

    • 0 avatar
      Advance_92

      Where do they live where a $600 a month commuting fee is acceptable that doesn’t have a decent transit infrastructure or land cheap enough to park a few beaters in the grass next to their shack?

      Is this Dallas/Ft Worth?

      • 0 avatar
        Jagboi

        The parking at my last office building was $650/month. For me it was faster to take transit than to drive and no parking costs, it was a no brainer to not drive.

    • 0 avatar
      ahintofpepperjack

      My 2015 Dodge Challenger was $395/month plus $100/month for insurance and another $100/month for fuel you could add $50/month for maintenance. So $650/month for something pretty fun.

      You could certainly get something cheaper and still fun like a Focus ST/Elantra sport/BRZ/GTI/Etc. And you would be well under $600/month

    • 0 avatar
      jkross22

      Isn’t $600/mo what Volvo is charging for the XC40 lease that includes insurance and maintenance?

    • 0 avatar
      redrum

      That’s $400-600 strictly to commute, though. How do they get around the rest of the time? I do agree that the study doesn’t smell right. An “urban dweller” driving over 10k a year seems awfully high.

      I live in the suburbs and using a car service just doesn’t make sense at all. My workplace offers a $10 Lyft credit to and from work every day, but considering Lyft would charge $25 each way for my commute (8 miles one way), it’d still be $30 a day out of pocket/$600 a month (again, with discount!).

    • 0 avatar
      W.Minter

      $400-600 per month is
      – extremely expensive in comparison to owning and driving a beater you can partly fix on your own
      – expensive compared to owning/financing a nice, durable CPO car (but you build up equity, only on a consumer good, but any equity is mostly better than nothing)
      – slightly more expensive than leasing a new car (and you need enough knowledge in analyzing the price & value), filling it up, insuring it, getting screwed by service departments at dealerships, paying for parking etc.
      – extremely cheap for having basically access to a pool of personal drivers with all pros and cons

      People probably don’t do the math properly, but it might be not the worst solution depending on the personal situation and level of car geekness.

      • 0 avatar
        Arthur Dailey

        For my wife’s year old daily driver, averaging around 24,000kms per year, amount generally rounded and averaged for the 16 months since we got it. Unfortunately it is only 1 of the 4 vehicles I have. The others are at least ‘paid for’ but their insurance costs are similar and maintenance for them is much higher.

        Per month:
        Payments: $302
        Insurance: $140
        Gas: $195
        Maintenance: $ 50
        Total: $607

        Not including depreciation, which is the steepest cost on new vehicles, and the exorbitant Highway 407 tolls of over $300 per month.

  • avatar
    Arthur Dailey

    I am not surprised that a study sponsored/conducted by the AAA would come to this conclusion. And realize that averages, particularly in a geographic area as diverse as the USA are basically ‘useless’.

    As someone who is quite ‘careful with a dollar’ and who obsesses on tracking costs, I resort to multiple types of vehicular use. Currently have 4 cars in the driveway. 3 as daily drivers (commuting) and 1 for weekends and ‘grocery getting’. As they are getting ‘long in the tooth’ we only allow the kids to use the ‘newest’ for long distance or night trips. For vacations, etc we rent with an unlimited mileage organization. Don’t purchase their ‘insurance’ as I keep a rider on our policy and also use a credit card with rental coverage. However that limits me to vehicles with an MSRP below $45k.

    For trips in the City of Toronto, or van rentals, will often use my Zipcar membership. Unfortunately it only allows 200 ‘free’ kms per day. However it does cover fuel and insurance.

    For short trip hauling, U-Haul. Our local dealer carries F-250’s so more than sufficient for anything that I carry short distances, and that limits their mileage fees which can easily build up.

    The only concern is that I have noticed that rental prices have increased rather dramatically this year. Looking to rent a Caravan for a week in the fall, as I did last year, and the price is up by about 35%.

    • 0 avatar
      Lou_BC

      @Arthur Dailey – as you have pointed out, one needs to do the math based upon one’s situation. People do need to accept the fact that vehicles are a luxury item. Anything that makes our life easier and isn’t directly used to “put food on the table” is a luxury.
      Personally, renting a truck for the times I really need it would be extremely expensive due to the industrial nature of my region. There are times of the year where it would be difficult to rent one. We have another bad wildfire season so most rental agencies don’t have left over trucks. Summer is already a primetime rental period for seasonal contract work.
      The local bulk home supply stores don’t have pickups to rent. Delivery charges for appliances or similar sized objects are around $50.00. If I’m buying a $1,000 dollar refrigerator, I’ll pay the fee but not for a load of lumber.

  • avatar
    civicjohn

    From AAA: in other news, the sky has remained blue for over 2 weeks in a row.

    I guess they’re trying to increase urban membership, good luck with that. In flyover country, this is hardly considered news that a car might be the cheapest way to get around.

    What is news is that I dumped AAA after 28 years when I finally realized my AMEX card had a better roadside assistance plan than AAA and I got free cards for my kids (made sure I put a spending cap on both).

    • 0 avatar
      PrincipalDan

      The last time I was a member of AAA was when I was in college and Dad was footing the bill for AAA. My car was such a POS Dad’s attitude was: “Don’t call me, call them.”

  • avatar
    Vulpine

    Owning will always be cheaper than subscribing, UBERing or any other form of ride-share business. Why? Because you OWN the vehicle; you go where you want, when you want, with no time wasted waiting for your ride to arrive and no added costs in so-called “subscription” usage where you never own the vehicle and pay at or near loan rates for the rest of your life.

    The ONLY time something like that can be cheaper is if you simply never travel. My mother didn’t need a car over the last five years of her life, she literally never went anywhere. She had a friend drive her to the bank, the post office, the doctor and… the restaurant. All that… maybe once a month. UBER could have worked for her but honestly her friend lived across the street and often combined her escorting of my mother around with other tasks, making for a reasonably pleasurable day out for my mother. My mother would have been 94 today. The only time her car was driven was when I drove it, once per year for the last 5 years.

    • 0 avatar
      jmo2

      “The ONLY time something like that can be cheaper is if you simply never travel.”

      That’s the point of living downtown. You have Whole Foods, Trader Joe’s, 70 restaurants and bars, your doctor, dentist and barber are all within a 6 block radius. Your office is walkable on a nice day and you Uber when it rains or you’re feeling lazy. You need to run to Target or Home Depot? ZipCar. Weekend road trip? Avis. That’s going to be a lot cheaper than buying and maintaining a car.

      • 0 avatar
        Vulpine

        “That’s the point of living downtown. You have Whole Foods, Trader Joe’s, 70 restaurants and bars, your doctor, dentist and barber are all within a 6 block radius.”

        — That’s only valid if you live within the 1- to 4-square mile region that is city center; and even then you may not have all of what you described available. Living outside of that area guarantees you need some form of personal transport, whether that be bicycle, scooter, etc. Sure, public transportation is available, but your travel is dependent on their schedules and often on what they’ll permit you to carry (you sure couldn’t do a Home Depot run on a city bus, for instance.) When everything you need is more than a half-mile away then walking becomes a hindrance unless you’re able to engineer a ‘shortest route circuit’ to reach all of your destinations and return home with your groceries still usable. An UBER for the same route would cost several times as much where, if you owned your own vehicle, it might only cost a couple dollars in fuel.

        So yes, maybe it is possible for some few to get away with it, but by no means can the majority realize any savings that way.

      • 0 avatar
        stingray65

        Show me a downtown with Whole Foods, Trader Joes, and 70 restaurants and bars, and health care facilities within walking distance, and I guarantee you will be paying $3,000++ per month to rent a small apartment. A car gives you many more alternatives on where you can work and where you can live, and the savings from suburban/rural housing prices versus prime downtown is going to buy a lot of gasoline and car payments. Furthermore, the major growth in employment is not in downtown locations – too expensive for business, and try switching to that better paying job across town if you don’t have a car.

        • 0 avatar
          krhodes1

          I bought a house for $90K within a 10-15 minute walk of most of that. And I’m not even in a remotely urban area. Suburb off a major shopping strip, and I live right behind and a street over from the area Mall. Port Charlotte, FL, to be exact. No public transit at all, but Uber works just fine.

          The major growth in many areas IS in the urban core these days. Businesses are moving their headquarters downtown in droves. Great example being GE moving their headquarters from suburban CT to the Seaport area of Boston. In Maine, WEX (major local employer) is moving from a suburban building right into downtown Portland. A whole area of Portland is under intense redevelopment due to this sort of thing. Similar all over the country. People are sick of commuting.

          • 0 avatar
            Vulpine

            “People are sick of commuting.”

            And yet the moves you just posted will be forcing more people to commute… or simply quit. By everything I’ve read, commuting into the downtown area of Boston is worse than a hassle, it’s nearly impossible… yet GE is moving to the sea port?

            Oh, I’m sick of commuting all right… But moving the business into the most congested parts of town? I hope they’re good with telecommuting because a lot of their people are not going to want to drive into the city to work.

      • 0 avatar
        Arthur Dailey

        @jmo2 Is correct. My eldest lives in a downtown condo. With no car. Saves on parking as parking spots selling for approximately $85k in her building. No insurance which would cost a minimum of $1,600 per year. No license fee. No gas. No car maintenance.

        Grocery store, gym, and all other conveniences are within walking distance.

        Instead she takes public transit to and from work for $32.50 per week. When she needs to go to IKEA, etc can use one of the car sharing vehicles that are parked beside her building. Another 30 are within walking distance. They cover gas, insurance, maintenance and in some cases parking. Membership is less than $85 per year. And she doesn’t have to worry about a vehicle that sits, parked, for 20+ hours per day, like most privately owned vehicles.

    • 0 avatar
      krhodes1

      It would be cheaper for me to not own any cars and Uber wherever I go with the occasional rental. I put a grand total of 3K on my three cars in Maine last year. All three are paid for, but the fixed costs of insurance and registration are better than $1500/yr. The BMW is still depreciating as well, albeit slowly. But I have over $60K in sunk costs buying those three cars. In Florida, I actually do live within walking distance of a ton of shopping. I pay over $1K/yr for insurance on one car, and that car costs me $400/mo payment, plus a bunch in depreciation, gas, maintenance. I’ll put about 4K a year on it. But here is the thing – my “commute” is driving to the airport, 100+ miles roundtrip. Work will pay for that if I Uber (if I drive they pay for parking).

      So of course the secret is not driving much. That is where I take issue with the original study in this posting – nobody who is driving 11K miles a year is going to give up a car completely. But someone driving 5K or less certainly could.

      • 0 avatar
        mcs

        ” I’ve read, commuting into the downtown area of Boston is worse than a hassle, it’s nearly impossible… yet GE is moving to the sea port?”

        I commute into Boston occasionally and it’s not bad at all if you time it right. Better than many suburban locations around Boston. The T isn’t bad. I can take a commuter rail train in (they run about every 15 minutes at rush hour) and then subway everywhere else. Some companies have shuttles around the downtown area so you can avoid the subway. If I’m going to the Longwood Medical Area, I’ll drive in (I have free parking as a benefit), but I’ll leave a few minutes before 6am. The traffic is slow then, but not terrible.

        The Seaport district means you might have to make a transfer on the subway. If you are taking the T from the south, you can go into South Station and either walk or take the silver line.

        My other commute is the purely suburban 128/I-95 in the Boston suburbs. It’s worse than the Boston commute and there is no MBTA option for me.

        • 0 avatar
          Vulpine

          I will agree that if public transportation has a capacity sufficient for the demand, then taking light rail (in particular) is the better way to commute. Where I live, roughly 50 miles away from Philadelphia and Baltimore (in opposite directions), I have to either drive about 3 miles east or 12 miles west to reach the nearest commuter station going to one of those cities OR wait for a bus that runs, if lucky, about every 30 minutes to reach those stations and in both cases take at least three times as long to get there as driving a personal vehicle would. Of course, back in pre-WWII days, this is how many suburbanites commuted to their inner-city jobs. Where I live, there is a gap in coverage where no trains, either light rail OR Amtrak, stop to take on or off-load passengers, despite the town once having a train station and regular service both ways. Word is that this gap will be closed in a way to permit commuting in either direction but for the moment the earliest such service will be available will be between ’22 to ’25.

  • avatar
    tonyola

    I have something called a Golden Passport, a no-cost card which is issued to recipients of Social Security by Miami-Dade County Transit. It gives me free and unlimited usage of Metrobus (a pretty good system with clean, air-conditioned buses) and Metrorail. The bus stops in both directions right in front of my apartment building. Very convenient if I am not in a hurry and don’t have too much stuff to carry.

  • avatar
    stingray65

    Yes there are a few people that can get by cheaper without owning a car, but to assume more than a tiny fraction of people want to live that way is basically saying that the 98% of the population that own a car are totally irrational. The other factor is that once you own a car, it is normally far cheaper to use it than let it sit while paying for the mobility redundancy of an Uber or bus ticket. Furthermore, those that own an EV or hybrid are even less likely to take the bus or walk, because they are already saving the world.

    • 0 avatar
      krhodes1

      I think most people greatly underestimate the fixed costs of owning a car, especially in a high insurance cost state. And nobody ever properly accounts for depreciation, which is a very real cost even if you don’t write a check for it more than occasionally.

      I actually have spent a couple weekends with no car in FL because I took the insurance off for the summer and couldn’t be bothered to put it back on just for two days in town. I live in the ‘burbs, but can walk to shopping in about 10-15 minutes. Ubering around town is cheap and readily available (whether Uber pricing is appropriate is a different discussion). If you don’t have a daily commute (and most of my IT-geek friends don’t anymore), it would be pretty painless to ditch owning a car and you would most likely come out ahead. Maybe not ahead of the cheapest possible paid-for beater, but ahead of any decent mid-priced or above car. Ultimately, I love cars so I don’t care, and thus I own five of them split between Maine and Florida. But it is an expensive passion.

  • avatar
    Kendahl

    I think it will depend on whether you live in New York City or Omaha, Nebraska.

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