Save By Sharing One Car

American and Canadian families spend a large portion of their paycheck on transportation. Usually, we spend most on housing, transportation, and food in that order. One of the best ways to reduce that big slice of the expenditure pie is to share one car. We each used to drive our own car and it was a big expense. Over the last 5 years, we made a few lifestyle changes such as moving from the suburbs to downtown Portland, and were able to reduce our transportation needs down to one vehicle by partially utilizing public transportation.

By sharing one car we save on:

Fuel cost. Gas prices went up this year and I read many articles on how to improve your gas mileage. That’s great, but if you can go down to one car, you’ll save even more.

Insurance. Auto insurance is expensive and I hate paying that bill. I haven’t been in an accident for 14 years! We all need insurance though so itโ€™s an unavoidable expense.

Car payment. How many of us are stuck with car payments? With one vehicle, you double your chance of paying your car off early. ๐Ÿ˜‰

Maintenance and repair. This is another thing I hate about owning a car. Whenever I take the car in for service, it always costs more than I thought.

Vehicle registration and other fee. Oregon’s vehicle registration is pretty reasonable at $19 per year, but I know Californians have to pay quite a bit more. We also have a $5 county registration fee to help pay for a replacement bridge. Yeap, another hidden tax.

Depreciation. This is another big one. As we all heard, a new vehicle loses 30% of its value as soon you drive it off the lot. Every year, that car you paid $30,000 for depreciates.

Opportunity cost. The big unknown is what else could you have done with all these savings above? If you invest what you had saved, you can give your retirement fund a big boost! Why not invest all that saving in your Roth IRA account for instance.

mazda 5 share one car

What do you think? We probably saved at least $300 each month by reducing to one vehicle. I know many families need two or more vehicles, but take a good look and you might be able to do it. We did it by moving into the city. Our current location has great public transportation options which includes a โ€œfarelessโ€ zone, ย and we can walk to many places including the art museum, theaters, restaurants, and the library. My employer pays for part of my public transportation monthly pass. Mrs. RB40โ€™s employer picks up the cost of an annual pass, so that helps keep our transportation costs down.

We even went carless for 3 months before we purchased the Mazda 5 to replace our old BMW Z3. We joined Zipcar and it’s a great option for city living. I like having a car way too much to stay carless though. ๐Ÿ˜‰

What about you? Can your family function with one vehicle? If you are already sharing one vehicle, how did you do it?

 

The following two tabs change content below.
Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

Latest posts by retirebyforty (see all)

Get update via email:
Sign up to receive new articles via email
We hate spam just as much as you

48 thoughts on “Save By Sharing One Car”

  1. Pingback: How Young Adults Can Build Wealth » Financial Success for Young Adults
  2. Pingback: 5 Ways to Save on Gas During Retirement | ResidualRx.com
  3. Pingback: How Young Adults Can Build Wealth » Financial Success for Young Adults
  4. Sharing one car, my favorite money saving tactic. We would not have been able to set ourselves on the path without giving up one car. We do not plan on buying another car unless my DH and I have to live apart for postdoc.

    Reply
  5. Pingback: How to save money – 1000+ ideas from the Yakezie Network | Broke Professionals
  6. Pingback: Weekend Edition: To Panic or Not To Panic | BeatingTheIndex.com
  7. Hey, new reader. Clicked over here from get rich slowly because my family has the same goal as the title of your blog! We also got rid of a car. It’s actually pretty easy once you do it, though it seems like a large inconvenience beforehand. One of the best moves we did, and helped us increase our speed of accumulation dramatically. We designed our lives better, so that I could take public transit easily. I don’t even miss it, and the money is significant. We are 3 children (a fourth on the way) and two adults, with but one minivan. Nice blog, I’m subscribing.

    Reply
      • My site is broadly parenting and family oriented, but I did a finance post (All-In: How I Made $800,000 in a Lifetime and $15,000 Last Week)and got requests to do more financial posts … if you’re mainly interested in finance-type stuff and not the rest then you might as well start with that post.

        Reply
  8. I loved reducing our three-car load to two cars. My husband has a project Beetle, and we had 2 cars on top of that. When I started working from home, we decided to sell our small commuter and keep our SUV for the fam. Now I borrow the SUV when I need it, but we have saved quite a bit of cash by selling the commuter!

    Reply
  9. Pingback: 3 Ways To Reduce Car Depreciation « Financially Consumed
  10. Pingback: Roundup: Better Money Management
  11. Great observations here. If people COULD switch to a one car approach, it would save a nice chunk of money every month. Insurance, gas, even car payments if people have them….

    All comes down to wants and needs. While many households definitely need 2 cars, some might not. For the latter group, it may be worth examining the idea further.

    Reply
  12. Pingback: Get Inspired!
  13. Never in a million years could we survive with just one car. My husband needs his for work (driving to clients), we have about 0 mass transit, and the kids need to be driven to school. Not to mention, I would feel trapped if I were at home without a car.

    Now, if we did live in the city, it would be a different story. It is great you have been able to do it.

    Reply
  14. My husband and I share one car as well and it’s so much more affordable, even with a car payment. Since he works from home and I work within bicycle distance, we also keep our annual mileage to a minimum – meaning less wear and tear on the car.

    Reply
  15. We could probably get along fine with one car, but it’d require a change (As all good things do). Currently both cars are running fine, but one is probably on the way out in the next 24 months – I wouldnt mind going down to 1 for the time being once that happens.

    Reply
  16. I’ve been considering the options of downsizing to just one car. However, to make it work for us, we’d have to move much closer to the city (we commute!). Trying to figure out if we would save in the long run…gas prices have really hurt us this year.

    Reply
    • You can try keeping track of all the transportation cost for a few months and see if it’s worth it. Our housing cost went up quite a bit when we moved to the city. ๐Ÿ™‚ We like living in the city much better though.

      Reply
  17. My hubby and I just started carpooling. I used to walk to work but my office location changed, and due to safety reasons I can’t walk anymore. I like carpooling. It gives that extra time in the morning to spend with each other which I think is great for a relationship. Plus you save money too.

    Reply
  18. I think it’s entirely possible to get by with one car when you live in a city. Similarly, living in a city often makes the cost of owning and using your car much higher so you have even more incentives to downsize.

    Reply
  19. We have one car right now, but it’s not always going to work for us. My husband is within walking distance to work and from there gets a government vehicle.

    We are set to be transferring soon and we won’t have access to a government issued vehicle and don’t know if we will be within walking distance. We are going to try though. Or maybe by a scooter:) I do enjoy the cost of having only one car.

    Reply
  20. My wife and I have always had only one car! We used to work very close to one another, which made carpooling easy. Now, she works virtually, so often times she doesn’t need a vehicle! It’s been great, and it’s definitely been a savings! ๐Ÿ™‚

    Reply
  21. One car would be difficult, as I commute to work and public transport is not that available in our town. If gas prices get high enough though, we could probably organize some kind of carpooling service. Now there’s an idea …..

    Reply
    • Carpool will be really helpful if gas price goes up anymore. I can probably car pool more as well, but I already take public transport. I usually drive when I have errands to do after work or if I want to sneak out early. ๐Ÿ˜‰

      Reply
  22. It would be nice to be able to use just one vehicle but is just impossible at this stage of our lives. My work hours can be unpredictable as can my wife’s. Then the kids need to be getting to school during the year, soccer practice, gymnastics. We actually drive about 60,000 miles per year or more. Once the kids move out, it will be easier to downsize.

    Reply
  23. This is a nice explanation of the benefits of switching to fewer cars. Right now, honestly, it would be extremely difficult for our family to make the change from 2 to 1 cars. It would force my wife to bicycle 40 miles each day to get to work, or prevent me from getting the children to and from school and after-school related activities. It would require a total re-think as to how we do things. Who knows, maybe radically higher gas prices will force this change on all of us in a few years.

    Nice Mazda by the way….zoom zoom.

    Reply

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.