How to Know If You Need a Car

Auto Loans, Loans
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The American dream of owning a car may be fading.

Cars are more expensive than ever. Many of our cities are so congested it’s no longer convenient to drive, and it can often feel impossible to find a place to park. More and more people are going without wheels, at least the kind of wheels on gas-powered cars. They choose bikes, scooters or ridesharing services such as Uber and Lyft.

So, do you need a car? It can be hard to tell. The decision depends on many factors, including how far from home you work, how close you live to public transportation, how much money you make, how important the environment is to you and even your politics. You should also consider how highly you value your time, convenience and flexibility.

It’s a tough decision with a lot of moving parts. We’ll help you sort through the factors.

Benefits of a car-free lifestyle

Saves money: Many people think the cost of ownership is simply the car’s purchase price. But that’s just the start. Over five years, the cost of owning a sedan purchased for $19,272 is actually $38,368 — including fuel, state fees, financing, maintenance, repairs and insurance — according to Kelley Blue Book’s Five-Year Cost to Own calculation. AAA estimates the annual national average cost of car ownership in 2015 was $8,698, or $725 a month.

Lowers stress: Owning a car means making lots of decisions, such as what to buy and how to survive the gantlet of salespeople at the car lot. You also have to shop for insurance, decide where to park and choose where to have the car serviced and repaired. And then there’s the stress of driving in traffic.

Reduces pollution: Carpooling, using public transit or biking all reduce tailpipe emissions. Furthermore, they cut down on the use of engine fluids — oil, gas, coolant and brake fluid — which are toxic and require careful disposal and recycling.

Benefits of owning a car

Saves time: One of the biggest reasons to own a car is simply that it saves time. As soon as you fire it up, you’re on your way. No waiting for Uber or a taxi to arrive or standing at a bus stop.

Convenience and safety: Owning a car gives you unlimited freedom to explore the world, bring along friends and change your plans on the fly. It can be a whole lot easier to cruise in your own little bubble than to rub elbows with strangers on public transportation. You feel safe in your mobile castle as you cruise through sketchy sections of town.

You are what you drive: You express yourself through your choice of car. Whether you’re a socially conscious electric car driver or you prefer to tool around in a muscle car, you tell the world about yourself with your choice of wheels. It indicates who you are, your status and income, even your political leanings (think Toyota Prius).

Alternatives to car ownership

Depending on where you live, a car isn’t the only game in town. One form of transportation, available to just about everyone, is walking. While this seems obvious, many people never even consider it. Walking is great for your health and gets you where you’re going faster than you might imagine in many cases. There are plenty of online map services to help you plan trips on foot, and if you buy a fitness tracker, you can even make a game of it.

For longer distances, there are plenty of other alternatives:

  • Public transportation.
  • Taxis and ridesharing services.
  • Free shuttles to and from airports or on college campuses.
  • Car sharing companies such as Zipcar.
  • Car sharing programs.
  • Rides from a friend.
  • Rental cars.

How to tell if a car-free life is right for you

These questions can help you make a decision:

Are there workable alternatives? Find the nearest public transportation. Download a ridesharing app and look at the availability of local drivers. Consider a bike.

Are the cost savings significant? It’s nice to think that you could save the entire $8,698 that the AAA says is the yearly cost of ownership. But without a car, it’s likely you’ll pay for some taxi rides or train and bus tickets. Still, with the average cost of an Uber ride at $19.42, you could take 37 trips with the ridesharing service for less than the monthly cost of car ownership. And you don’t have to pay for parking.

Will public transportation work for your schedule? Taking the bus will usually take longer than driving, though you’ll have time on the bus or train to work, read or relax. Don’t forget to factor in your walk or bike ride to the bus stop or station, plus any transfers.

Does your employer subsidize public transportation? More and more employers provide a stipend or subsidy for public transportation costs. You not only save money by not having a car, you also eliminate commuting costs — a double win.

Do you have backup? There may be times — an emergency in the middle of the night, perhaps — when you need to have a car. Do you have a neighbor, friend or family member who can help?

After weighing the pros and cons of car ownership, you might still be undecided. Going cold turkey can be scary. But — particularly if your car is in its final years — perhaps you can begin experimenting with some of these alternatives and gradually make the transition to a car-free life.

More from NerdWallet
What is the total cost of owning a car?
Financial steps to take before buying a car
How to buy a used car

Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: preed@nerdwallet.com.


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