Beyond the monthly payment: The true cost of owning a car
SAN FRANCISCO (KGO) -- Auto ownership used to be a symbol of freedom In America. But now, for many in the Bay Area, car ownership looks more like a ball and chain.
I have been looking into the true costs of owning a car and what it takes to leave that all behind. The average cost of owning a car is $9,000 a year. A bigger part of your budget than food, less than housing. So take a moment and consider your options.
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Chelsea Mowery shows us her car. She likes it. "Yeah, I mean nice drive, good gas mileage," she said.
I asked her, "Do you know how many miles you put on it a year?" "Uh, probably about 10,000," she replied.
I met Mowery when I asked on Twitter if anyone wanted me to figure out their actual car costs. "How much does it cost you a month?," I asked her. "$231 and some odd cents," she said.
I spoke to Matt Jones, an automotive expert with Edmunds.com, a respected automotive website. "Matt, she just said her car cost $231 a month," I told him.
"I hear a lot of people say that their car costs, what their car payment is, and for most people, that's actually not 100% accurate because there is more to owning a car than just the payment," said Jones. He is using Edmunds' online calculators to run Mowery's numbers. Figuring gas mileage, auto insurance costs, depreciation, and maintenance.
"That's about $3,600 right? So, if we divide that up by 12 months, that's $300 per month in addition to the $231. So, your car really costs you about $530 per month," said Jones. "I mean, that's a big difference," admitted Mowery.
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She still has no plans to go car less, even though her monthly cost is more than double what she thought.
There are plenty of other transportation options.
"Once you start doing the math and dive into how much you are really spending on car ownership, and start to look at the alternatives, what if I am taking public transportation more, taking Lyft more, walking a bit more, you start to recognize that it just doesn't make great financial sense to own a car," said Timothy Burr, Director of Public Policy for Lyft. He just got rid of his car. He says a quarter of all Lyft trips start or end at transit agencies.
"We don't see people getting rid of a car and replacing that with one-to-one with Uber. We tend to see them using a combination of modes," said Andrew Salzberg from Uber.
That is exactly what Ashlee Walker is doing. She commutes by BART from Oakland to San Francisco, walking on both ends of the trip. Nearly everywhere else, she takes Lyft. "There is a lot of freedom in not having to worry about a car note and insurance."
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So, when do cars lose their grip on us?
When we are young, millennials are 30% less likely to own a car. When we live or work near public transit. Ease of use is key. "If you have a car at the end of your driveway, you just use that car, it is easy to understand," said Salzberg. "What we want to build is something in the app that is just as convenient or more convenient than doing that," he said.
And finally if you do the math, you may leave the car behind. "If I had to make a guess, I would say I am saving at least $600," Walker said.
Uber and Lyft both offer carpool type rides, and are also experimenting with subscriptions allowing you to know exactly how much a commute will cost you. Things are changing fast, so make sure you keep track of them.
Click here for more stories, photos, and video from 7 on Your Side and Michael Finney.
