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Car Busters 27, June-Aug 2006

Dear Anna
Lately I have been going out less, not enjoying dinners out at my favourite local restaurants, and skipping out on theatre and live music as it seems I am dumping all my money into my car. How it is possible that a car can be so expensive?
Broke

Dear Broke

Car ownership costs are massive. But, very few drivers bother to add them up or consciously choose between being carfree or a car owner.

Marginal costs vary with use - like fuel, parking, tolls, congestion charges, fines and wear and tear. You save these when you phone, text, email, write, walk, cycle or share a lift instead of driving. Even paying for public transport instead may be cheaper, for instance in a congestion charging zone (£8 for central London).

Marginal costs are less than half of total private costs - according to the UK Inland Revenue tax allowances - 20p compared to 45p a mile.

By getting rid of, or avoiding buying a car, total savings are huge - around a days net wages a week. This is especially true of second cars, whose economic argument in terms of accessing a living wage isn't crucial.

So, what do you want from life? Do you each need a car or would you rather go part time, do work that you love at a lower wage, have a child, better home closer to town or buy convenience like meals out?

'Need' depends on how often you must drive, if there is no other viable choice for an essential trip. When driving requirements drop to less than every other day, not to own a car will be the best decision you ever made. I'm deliberately car free and so don't worry if it is safe from accident, theft or about maintenance, tax, insurance, cleaning, parking or when to replace it.

Fortunately not owning doesn't mean you can't occasionally use one. Taxis are viable and affordable to get the weekly food shopping in an urban area. Or use delivery and save time too!

Too many cars already compete for the same road space. There are spare seats. Many websites offer lift share matching e.g. www.liftshare.com or ask friends or colleagues.

Could you share ownership with a relative or partner and save over £1,000 a year each for two sharers? Consider how it will work e.g. bookings and payment, with advice from Smart Moves www.smartmoves.co.uk/publications

Remarkably, hiring a car even every other weekend is cheaper than ownership. Many firms offer discounts. Hiring cuts ownership hassles. Plus you always get a modern, fuel efficient vehicle with a good stereo.

Car clubs suit people who want to rent by the hour. Clubs have a choice of vehicles prebooked by phone or internet. See www.carclubs.org.uk Car owners who became car club members save over £1,400 a year.

The most expensive aspect of ownership is depreciation or loan repayments. Other fixed costs include tax, insurance, breakdown membership, motoring standard test fee (MOT), garaging, yearly parking permits and lost savings interest. Also the income tax paid on the extra money earnt to afford the car!

Non car owners buy a careful mix of transport items e.g. better shoes, waterproofs, cycling gear, public transport, car hire and taxis. Some of these wouldn't otherwise have been worthwhile, but if you don't sink money into your own metal box then a bus ticket seems cheap.

Non car owners tend to be healthier due to active travel, even just the walk to the bus stop. Also there is a conscious choice about if it is worth travelling at all since non owners pay more of the true journey costs of motorised travel. Less mobility often raises quality of life. It is certainly better for society.

Car ownership and housing decisions interact. Homes without off road parking or garages cost less to buy, rent and maintain. Could you afford to live closer to work to cut commuting costs and time by foregoing your own parking space? On road parking is enough. Invest your money wisely on assets that don't depreciate.

I helped write a worksheet called "Add up your car costs", free in pdf and excel versions (which does the maths for you) from www.cuttingyourcaruse.co.uk

Another site comparing cars with a mix of other transport costs is www.carclubs.org.uk. I've not seen one that factors housing, savings interest lost or tax paid on the income, which add to personal costs.

Cutting your car use or being car free will save you a great deal of money, make you healthy and green.

Good luck

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