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The True Cost of Car Ownership: Why Public Transportation Can Save You Thousands

The Cost of Owning a Car

When it comes to buying a car, most people tend to focus on the upfront costs, such as the sticker price, financing, and incentives. However, it’s important to consider the long-term cost of ownership, which includes maintenance, insurance, gas, and more.

In this article, we will explore the various factors that contribute to the cost of owning a car and how it compares to taking public transportation as a viable alternative.

Record-High Prices for New Cars

According to Kelley Blue Book (KBB), the average price of a new car in 2021 is around $48,000, which is significantly higher than previous years. One factor contributing to this increase is the global microchip shortage, which has led to a decrease in the production of new cars.

As a result, dealerships have fewer cars in inventory, and prices have risen accordingly. Additionally, financing rates for new cars have never been higher, with J.D. Power reporting an average monthly payment of $700.

Low Deals and Discounts for New Cars

Another issue that exacerbates the high cost of new cars is the lack of deals and discounts. Due to the limited inventory, dealerships do not have much incentive to lower prices or offer incentives.

Additionally, the manufacturer’s suggested retail price (MSRP) is the standard price for most new cars, leaving little room for negotiations.

Record-High Prices for Used Cars

Used cars are also experiencing a surge in prices, reaching an all-time high of $28,000, according to KBB. One reason for this increase is the shortage of new cars, which has led many consumers to turn to the used car market.

As a result, dealerships are raising prices to meet demand, and consumers are paying a premium for pre-owned vehicles.

Rising Cost of Ownership

Aside from the upfront costs, owning a car also entails ongoing expenses such as maintenance, gas, insurance, and depreciation. A report by AAA estimates that the average cost of vehicle ownership is around $9,000 per year.

This includes expenses such as depreciation, gas, maintenance, and insurance, which can add up quickly. Furthermore, gas prices have increased significantly in recent years, making it one of the major expenses for car owners.

Other “Little” Costs

Aside from the major expenses, there are other costs associated with owning a car that can be easily overlooked. For instance, financing a car means paying interest, which can add up to thousands of dollars over the life of the loan.

Additionally, repairs and warranty costs can be significant depending on the make and model of the car. Finally, taxes, title fees, and finance charges can quickly increase the total cost of ownership.

Public Transportation as an Alternative

While owning a car offers convenience and mobility, taking public transportation can be a viable alternative for many people. Not only does it save money, but it can also have health and environmental benefits.

Here are some reasons why public transportation might be a better option for you.

Potential Savings by Taking Public Transportation

According to the American Public Transportation Association (APTA), taking public transportation can save you up to $10,000 per year compared to owning a car. This includes the cost of gas, maintenance, insurance, and financing.

Additionally, if you decide to give up your car altogether, you can save even more money and put that towards other expenses such as housing or education. Furthermore, every dollar spent on public transportation generates 16 cents of economic activity, which benefits the community as a whole.

Potential Health Benefits of Taking Public Transportation

Not only is public transportation cheaper than owning a car, but it can also be safer. APTA reports that public transportation is 10 times safer per mile than driving, reducing the risk of accidents and injuries.

Additionally, taking public transportation can also improve your overall health by reducing stress levels and promoting physical activity. Walking to and from public transportation stations can help you get more steps in during the day and potentially improve your overall health.

Pennsylvania Study on Public Transportation Costs

In a recent study by the Pennsylvania State Employees Credit Union (PSECU), researchers found that taking public transportation is significantly cheaper than owning a car. The study compared the cost of owning a car with the cost of taking public transportation in different cities across Pennsylvania.

The results showed that taking public transportation could save an individual up to $6,000 per year compared to owning a car. Additionally, the study found that the cities with higher public transportation usage also had lower rates of traffic congestion and air pollution.

Conclusion

In conclusion, the cost of owning a car is more than just the sticker price. It also includes ongoing expenses such as maintenance, insurance, and gas that can add up quickly.

Furthermore, the limited inventory and lack of deals on new cars have made ownership even more expensive. However, taking public transportation can be a viable alternative that can save you money and benefit your overall health and environment.

By weighing the pros and cons of both options, you can make an informed decision about what is best for you. Owning a car is more than just the sticker price, and it’s essential to consider the long-term costs such as gas, maintenance, and insurance.

The limited inventory, lack of deals, and financing rates for new cars have made owning a car even more expensive. Public transportation is a viable alternative that can save money, reduce stress, and improve health and the environment, serving as an ideal alternative to owning a car.

By factoring in these considerations, individuals can make informed decisions about their transportation that would benefit them and the community in the long run.

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