First Click: Why own a car when you can share one instead?

December 3rd, 2015

25

Dan Neil writing for the WSJ in a piece titled Could Self-Driving Cars Spell the End of Ownership?:

"Personal-vehicle ownership isn’t going away. Some people will own and cherish cars. But those people and their cars will be considered classics. Rates of ownership will decline, an artifact of an era of hyperproserity and reckless glut. Twenty-five years from now, the only people still owning cars will be hobbyists, hot-rodders and flat-earth dissenters. Everyone else will be happy to share."

Why wait 25 years for the arrival of autonomous vehicles? Chances are, if you live in a big city then you probably already have access to car-sharing services that can obviate ownership. 2.4 million people (about 1.3 million Americans) subscribe to at least one of dozens of car-sharing companies spread across 30 countries on five continents, according to a report from Navigant Research. Revenue from car-sharing services worldwide is expected to total $6.5 billion in 2024, up from $1.1 billion in 2015.

I haven’t owned a car for at least 15 years. I don't have to. Last year I gave €1,892.54 (about to $2,004) to a company called Greenwheels for the privilege of unfettered access to its fleet of cars in Amsterdam. That was my total cost, mind you, covering parking, insurance, taxes, maintenance, and fuel during an unusually heavy year of driving (I renovated my home neccessitating lots of trips to the hardware store). Greenwheels lets me choose the car that best fits my need at the time, allowing me to select between a subcompact, compact, or even a small cargo van which I used the five times I moved house this summer. And because I live in a densely populated city akin to San Francisco, I can almost always find an available car within a block of two of my home.

So, let’s compare that $2,000 I paid over the last 12 months to the cost of ownership for a car, realizing, of course, that your mileage, quite literally, will vary.

Total Cost of Ownership

AAA estimates that the total average cost to own and operate a car in the US is $8,698 per year. Consumer Reports says that the cheapest overall car (the Toyota Prius C Two subcompact) will cost you $24,600 in the first five years (almost $5,000 per year) after factoring in depreciation, fuel, loan interest, insurance premiums, sales tax, and maintenance and repairs. Other cars like the Hyundai Veloster will cost $32,400 over the first five years ($6,480 per year), while a Mini Cooper Countryman S will cost $37,800 ($7,560 per year). Consumer Reports’ most expensive car to own was the BMW 750Li luxury sedan with a five-year cost of $106,200, or $21,240 per year. You can add even more to those figures if you live in a big city where a private parking space will cost you a few thousand dollars each year, or maybe several hundred dollars if you’re willing to circle the block endlessly hunting for street parking.

If you live in a city and don’t have access to a car-sharing service now, chances are you will at some point in the next decade. But if you’re a car owner already in range of a car-sharing service you really have to ask yourself why — why own something so expensive that you use so rarely when car sharing might save you a boat-load of money and headaches? Zipcar, for example, notes that its members save up to $600 per month compared to owning a car, because they have nothing to garage, insure, or maintain.

As Dan Neil points out, the utilization rate of a US car is roughly 4 to 5 percent, meaning it’s sitting unused for 23 hours of every day. Rotting and depreciating and taking up space just like the increasingly outmoded idea of car ownership itself.


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