Do you drive to work or take public transportation? Do you need access to a car on a weekly basis? Or is your need for a car limited to big shopping trips and occasional weekend excursions? Some costs associated with vehicle ownership — like insurance and monthly or yearly parking fees — are a given, even if you don’t use your car very often. If you don’t drive on a consistent basis, renting might make more sense.
In big cities, parking can be a hassle, and the cost of a monthly parking garage can easily top the $300-mark depending where you live. By renting a car as needed, you’ll avoid the parking wars and headache.
Do you have the money for a down payment? Can you swing a monthly payment? And don’t forget the cost of car insurance and maintenance. Sure, daily car rental rates might seem expensive at first glance, but consider the aggregate cost of owning versus renting when you’re not using that car all the time.
Suppose you typically need a car one day per month. Zipcar, the world’s leading car sharing network, charges $79 a day for a vehicle in major U.S. cities, and that includes gas, insurance, and 180 miles of usage. Membership involves a meager $25 application fee and can cost as little as $6 per month. If you rent a car once a month over the course of a year, you’ll spend just over $1,000 all-in. Need a car twice a month, or 24 times a year? With Zipcar, you can swing it for just under $2,000.
Now let’s assume you opt to buy a car instead of renting. In a major city, you can easily pay $2,000 or more in yearly insurance costs alone. Then there’s routine maintenance. According to data from the US Bureau of Labor Statistics, the average yearly cost of maintenance and repairs was close to $800. Even if you cut that in half to account for decreased usage, you’re still looking at $400 annually. Oh yeah — and then there’s that whole matter of a car payment, which can be anywhere from $250 to $500 a month depending on the type of vehicle you buy, the amount you put down and your financing terms.
If you have access to public transportation and don’t need a car for everyday use, renting is likely the most cost-effective option. Before you buy, think about the logistics of vehicle ownership and crunch some numbers. You may be surprised by how much more convenient and affordable it is to rent.