Guest Post: Does a car-sharing service save money?
NOTE: This is a guest post by Steven Zussino, President of GroceryAlerts.ca, Canada’s Source for Grocery Deals, canadian coupons, and printable coupons. They match coupons with the latest grocery flyer specials.
Many people have access to car-sharing services like ZipCar, but the question is do these services save money and how they compare to renting a car.
Car-sharing is similar to a traditional car rental service, however, car-sharing differs where you would only need a car for a short period of time (less than 1 day). Additionally, you only pay for the usage (typically the length of the rental and the distance travelled).
How does a car-sharing service save money?
1. Not paying for insurance that you don’t use.
One problem I have with insurance is that it should be based on how much you drive. I am paying almost the same rate of insurance if I drive 40 kms per month or 4,000 kms per month. A car-sharing service may work if you drive sporadically.
2. Save money on car depreciation.
As soon as you purchase a car, the value is decreased. With a car-sharing service, you do not have the car as a depreciating asset on your personal balance sheet.
3. Save money on parking.
My wife and I live in a large Metropolitan city in the downtown area. A parking spot would cost at least $60 to $120 per month. In more expensive cities, parking could be over $200 per month. A car-sharing service has cars located in several convenient areas around the city and absorbs the cost of a monthly parking pass.
4. Save time by not doing maintenance.
A car needs constant maintenance and repairs. A car-sharing service saves you time by not getting oil changes, filling gas, cleaning the inside of the car, and doing a car wash.
How can a car-sharing service cost money?
1. Wrong company or plan.
Some car-sharing companies have different tiers or plans. You will want to thoroughly review a company’s car-sharing plans carefully to make sure that you’re getting what you will use out of the service. Make sure you get a map of the locations of their vehicles and always review the plan to make sure it works for your situation.
2. Possible being underinsured.
Most car-sharing services will come with insurance coverage but you are responsible for the deductible if you get in an accident. When comparing car-sharing services, make sure that you fully understand the insurance policy.
3. Not following the regulations of the service.
For any type of sharing service, rules and regulations come into play. A car-sharing service has several rules i.e., you must return your cars on time otherwise the person that booked after you won’t be able to get the car. The sharing service requires you to take a close look at the vehicle before driving to make sure nothing is damaged and that their is gas in the tank.
When the rules are not followed, you will be docked with fees and this is something to be aware of when considering a car-sharing service.
4. Driving too many long-distance drives.
If you plan on driving a long-distance (over 20 kms), it is often better to just rent a car because some car-sharing services charge extra per km or mile driven.
Is it worthwhile?
In my opinion, it depends on the frequency and spontaneity of your driving style. My recommendation is to try the Zipcar calculator tool and see if you would save money based on your driving style and costs.
9 Responses to “Guest Post: Does a car-sharing service save money?”
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When I lived in Toronto Zipcar offered me a great option to do periodic day activities (like Costco runs, or driving my great uncle to see my great aunt) that I otherwise wouldn’t have been able to do. It was definitely way less expensive to use Zipcar than to consider purchasing a car (and finding where the heck to park it without giving up an arm and a leg).
AMD´s latest post —> Two Trimesters Down, One To Go
@AMD: I think it would work best in large cities like Toronto where it is cost-prohibitive to have a parking spot and pay for a depreciating asset.
Steve @ Grocery Alerts´s latest post —> Hidden BOGO Clubhouse Gravy Coupon- Save.ca
I love car sharing. When my brother was in Vancouver he was a member of a car cooperative. We used this service whenever we needed to go grocery shopping and/or picking up family and friends from the airport (the Canada Line didn’t exist yet back then). I think at the time the cost of gas was deducted from the cost of the rental too…which was super awesome.
In 2010, I spent over $3,800 to have my own car in Vancouver. I gave up my car in January 2011, using the BC Scrap-it Program & I got a $750 credit to apply to my new ZipCar account.
This year, I have spent just $100.80 (to sign up with ZipCar) and have over $500 of credit left to date. Yes, I walk & take the bus more & am the first to admit that I’ve changed the way I do things. I know it’s not for everyone. For me, knowing that I didn’t shell out another $4,000 or more this year makes my ZipCar membership more than worth it.
On the other hand it have to be an interesting partner who you are going to share car with.
As instead of listening a good audiobook or thinking your ideas through, you have to listen and talk about something else…
On the other hand in America and Canada the prices are so low, it is hardly worth considering. Savings would be $100 a month in exchange for?…30 hours of your life?
Financial Independence´s latest post —> Inflation influence
There’s no doubt I save hundreds of dollars a month with car sharing instead of owning. But that’s because I don’t drive much to begin with.
I think most of the ways that he points out that will “cost you money” aren’t really an issue. Insurance waivers cost $5-$10 a month in the U.S. with Zipcar, which isn’t even close to insuring a car that you own.
Zipcar really isn’t good for trips longer than one day because you have to pay for the car until you bring it back to its parking spot.
I think anywhere that Zipcar exists (which is typically medium to large cities) there’s the potential to save based on your lifestyle. But as the author says, it depends on many factors.
Jeffrey Trull´s latest post —> How Much to Spend on Travel
For a list of Canadian carsharing organizations, from Victoria to Halifax, check out http://CarSharing.ca
@Kevin McLaughlin: Thanks for letting me know of this list and the website.
Steve @ Grocery Alerts s´s latest post —> New Purina Dog and Cat Food coupons | Save.ca
[...] A look at whether it makes financial sense to use a car sharing service, a more flexible alternative to car rentals. [...]