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Shedding a vehicle and its costs could work wonders for your finances. Read on to see if you’re ready to ditch your car.
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Owning a vehicle is hardly an inexpensive prospect. Between maintenance, auto insurance, and other expenses, the average cost of having a car reached an astounding $10,728 last year, according to AAA. That’s almost $900 a month.
Now, think about what an extra $900 a month might do for your finances. It could be your ticket to boosting your savings account balance, paying off debt, and having more cash on hand for leisure and fun activities. So if you’re able to unload your car, the upside could be huge.
Of course, functioning without a car can be easier said than done. But here are a few signs that you may be ready to live a car-free existence.
1. Your job has become 100% remote
Many people’s jobs went remote during the COVID-19 pandemic. But over the past year, a lot of workers have slowly made a return to the office, either on a partial or full-time basis.
Some employers, however, have maintained their remote setups. Given the cost savings of not having to rent out office space, that’s understandable.
If your job is still 100% remote and you expect it to stay that way for the foreseeable future, then you may no longer need to keep a car around if the main reason for having one was to get to work. If you only need a car on occasion — say, once a week for errands or social events — then it could be far more cost-effective to use a ride-hailing service if you need a ride. Even if this costs you $100 a week, and your total tab there is $400 a month, that’s less than half of what it costs to own a vehicle on average.
2. You do most of your shopping online
Even if you don’t need a car for work, you may like having one to hit the supermarket when you need to. But if you’re someone who mostly orders groceries online and you can’t remember the last time you picked out your own produce, then you may not need a car any longer.
Similarly, if you tend to order loads of items on Amazon to avoid hitting the mall or your local Target, then you may not need a car for the occasional errand — not when you can simply use a ride-hailing service for those one-off occasions where you have to do your shopping in person. And while having a car may be handy in the context of meeting friends at a restaurant, you could work around that by choosing places within walking distance or simply asking for rides.
3. Your kids are older and are easier to bring on public transportation
Just because you live in a city with public transportation doesn’t automatically mean you don’t need a car of your own. If you have young kids, for example, it’s not exactly easy to wrangle a stroller on a train or bus.
But if your kids are older, it may be easier to get around town using public transportation. And in that case, you may not need to bear the expense of a car.
Plus, if you live somewhere with ample public transportation, chances are, you’re in a city where parking is either tough to come by or expensive to pay for. So that’s another good reason to get rid of your vehicle if you can do without it.
Functioning without a vehicle isn’t always feasible. But if you live in an area where you can get around via public transportation or on foot, and you don’t really need a car to work or shop, then it could pay to unload your car and enjoy the savings.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com and Target. The Motley Fool has positions in and recommends Amazon.com and Target. The Motley Fool has a disclosure policy.
