Things like insurance, fuel, parking, tires, maintenance and repairs can add up at an accelerated rate.
One way to keep your monthly costs low is to find an alternative to owning a vehicle.
When I was in university I owned a vehicle but only had it insured during the summer months. This meant I didn’t have to pay for vehicle costs for about 8 months of the year and was able to save big.
Plus a travel bonus worth another $150.
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At that time I had no choice - I was a student with little to no income, so I had to cut costs where I could. Even today, after graduating, I still try to drive as little as possible as I know vehicles can be expensive, especially with the rising cost of fuel.
Mr. Money Mustache, a Canadian-born engineer who retired at 30 and now lives in the United States, explains that vehicles are costly for most of us and advocates using a vehicle as little as possible.
6 Alternatives To Cut Your Costs
Below are some alternatives to owning a vehicle.
Assuming that owning a car costs $437.48 a month or $5,250 per year, potential savings can be calculated based on that.
1. Ride Sharing/Carpooling
Ride sharing is an economical alternative to owning a vehicle.
There are carpooling websites available to Canadians and numerous ads on classifieds like Kijiji and Craigslist in large cities with people seeking a ride-sharing arrangement.
Carpool.ca allows you to participate even if you don’t have a car. You can indicate that you want to be just a passenger. This arrangement involves one designated driver. And cost will depend on the number of passengers, and the agreed upon shared expenses such as gas and parking.
One drawback can be that the schedules of each person have to be the same.
2. Public Transportation
One the most economical options to owning a car is public transportation.
Depending on your city there are likely a couple options and most cities have bus service. Bigger cities such as Vancouver and Toronto offer train service, which is more efficient.
This might not be an option for you depending on where you live, but if it is the savings can’t be ignored.
3. Weekend Car Rentals
Car rentals are another alternative to owning a vehicle.
If you live close to work and only need transportation once a week (or less) you may be able to save money by using car rentals instead of owning a vehicle.
Car rental companies like Enterprise sometimes have weekend specials of $9.99 per day for the weekend, which means you’d pay around $20 (plus taxes) for having unlimited access to a rental vehicle for the weekend.
They are able to do this because the large majority of their rentals are corporate/insurance which are focused on the weekdays, so they can offer specials on weekends to making additional revenue off the vehicles instead of having them sit idle.
When I didn’t own a vehicle, I would rent cars on the weekends and was able to easily get around town on my days off.
Renting a car on weekends was great for me because it allowed me to have the freedom of having my own car but without the extra cost and I was able to take advantage of the reduced rates car rental companies offer on weekends.
Taking cabs can help cut down the cost of transportation if they aren’t used that often.
Since the cost of each cab ride is generally higher than other alternatives, using cabs to get around town would be cheaper than owning a car for anyone who doesn’t need to travel often or can get by with other transportation methods most of the time.
Consider someone who lives close to work and has everything they need for their daily lives nearby like food, groceries and shopping. They would only need to take a cab for trips to the airport and would be better off than owning a vehicle.
I have a coworker who is in this situation – she walks to work and is also within walking distance to most stores and only uses a cab to get to/from the airport when travelling out of town.
The cab ride costs about $50 (one way) but since she only travels 1-2 times per year she saves money compared to owning a car year-round and rarely using it.
Another benefit of using cabs is the access for persons with disability. Most municipalities have bylaws that regulate the taxi industry on providing access for persons with disability, who benefit from having access to cabs that are equipped to transport them within the city.
Even though they offer great convenience, cabs are still one of the most expensive transportation options available and shouldn’t be used as a primary form of transportation.
Uber gets lot of press these days, here’s a quick primer:
Uber is an a company that uses an app to enable people to arrange rides with others for money. Anyone with a smartphone can download the app and submit a trip request which gets sent to Uber drivers (who use their own vehicles). The trips are generally significantly cheaper than a cab fare - peak travel times excepted - and the app allows users to see in real-time where the vehicle picking them up is located.
Using Uber to get around a large city is a great alternative to owning a vehicle as it means you wouldn’t have to pay for all the costs a vehicle owner pays – depreciation, interest, maintenance, insurance, fuel, repairs and parking.
A couple downsides of Uber is that the company is currently only operating in select cities and fare prices tend to spike dramatically during peak travel times such as New Year's Eve. Find out if Uber is in your city, do a search here.
Without a doubt the cheapest alternative to owning a car is walking or biking.
The average Canadian commutes 25 minutes to get to work each morning and those who walk (or bike) to work usually have the simplest commutes. Not only is walking or biking economical, it also forces you to focus on your health by providing a cardio workout each time you go to/from work.
An obvious drawback is that you are restricted to everything within walking or biking distance. One way to get around this is to use Uber (if available in your area) when you need to go somewhere far. Another idea is to schedule all errands for a day and rent a car that day to get them done. And of course there's also public transportation.
Question For You
If you’re serious in lowering your transportation cost, there’s ways to do that.
Here’s the question...
Which of these six alternatives makes the most sense to your situation?
Share your thoughts below.