Loans Car Loans Should You Really Own a Car? By Jean Chatzky Jean Chatzky Facebook Instagram Twitter Jean Chatzky is the CEO and co-founder of HerMoney, an award-winning personal finance journalist, and a best-selling author. learn about our editorial policies Updated on April 21, 2022 Reviewed by Erika Rasure Reviewed by Erika Rasure Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. learn about our financial review board Fact checked by Kyra Baker Photo: Prostock-Studio / Getty Images You grow up. Graduate. Nab that first job. What’s the next step? Unless you live in a city with a great transit system, you have to buy a car, right? Well, maybe not. The future of driving is going to look very different, and it’s coming sooner than you think. The independent think tank, RethinkX, predicts that by 2030, 95% of the miles traveled in the U.S. will be covered in self-driving electric vehicles owned by ridesharing companies. “I think a child born today is unlikely to learn how to drive,” says futurist Juan Enriquez, co-author of Evolving Ourselves: How Unnatural Selection and Nonrandom Mutation are Changing Life on Earth. In this near-future scenario, you won’t need to own a car or even have a license: We’ll all just be ferried around by on-demand self-driving cars. But we don’t need to wait for that self-driving future to see that the economics of car ownership has already changed. When you add up the costs—and sometimes headaches—of car ownership and factor in the proliferation of ridesharing services, you start to wonder whether owning a car makes sense. Here’s how to make the call on car ownership. Track Your Mileage The average American driver drives around 13,500 miles each year, according to the U.S. Department of Transportation Federal Highway Administration. Not hitting that mark? Then you have a case for finding alternative routes, be it leasing, public transportation, or ridesharing. If you still want a car, there’s a chance you can get a better price on a lease because they’re miles-based, says Ron Montoya of Edmunds. And if you’re driving less than 10,000 miles a year—and you’re living in an Uber-friendly city—then it turns out to be cheaper to rideshare, says Enriquez. Consider the Array of Alternatives Do you live in Chicago, Detroit, Los Angeles, Miami, New York, San Diego, San Francisco, or Washington, D.C.? In these cities, a NerdWallet study found that using ridesharing services for your weekly commute is cheaper than using a personal vehicle. In San Francisco, for example, you could save over $330 a month. Does Owning Fit Your Monthly Budget and Lifestyle? As of December 2021, the average price for a new car cost more than $47,000, according to Kelley Blue Book. The average monthly car loan payment was $634 per month as of Q4 2021. If this seems high, a lease payment may appeal: On average, it’s less than a monthly auto loan payment. But a monthly car payment is only part of the equation when calculating the costs of car ownership. The other costs include insurance, fuel, maintenance, and in some locations, parking. Some not-so-obvious ones include depreciation, license and registration fees, and taxes. The average annual insurance premium varies by state, but it was roughly $1,636 in 2021, according to Quadrant Information Services. The cost of parking is the other biggie for many people in cities—though it’s worth noting that if you’re living and working in a city, the cost of parking is partially offset by reduced fuel costs due to your shorter commute. Similarly, maintenance costs will depend on the vehicle. If you commute to work, AAA says you can expect about $57 in total vehicle expenses per 100 miles. To get a more tailored estimate for all of the above, use a calculator like Edmunds.com’s True Cost to Own. Can You Live Without One? If you currently own a car and want to see if it’s cheaper to ditch the wheels, then start experimenting. Once you’ve figured out your cost of ownership, you could use the fare estimate tools offered by many ridesharing services to see how the monthly cost would compare. But to get a sense of how costs differ—and to see if it suits your lifestyle—then you might try leaving your car in the garage for a month and test your other options. Note Another alternative: car subscription services. For a monthly fee you gain access to a fleet of vehicles, without the worries of maintenance or insurance. Conversely, if you don’t own a car, then track how much you’re spending on transportation each month and start comparing it to the average ownership costs listed above. Something that isn’t as quantifiable, though, is the personal time you get back by using ridesharing services or public transportation, whether you’re using that time to tackle emails, catch up with loved ones, or enjoy time to yourself. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. RethinkX. "Transportation." United States Department of Transportation Federal Highway Administration. "Average Annual Miles per Driver by Age Group." Charlotte Observer. "Taking Uber to Work Is Cheaper Than Driving in Cities Across the Country." Kelley Blue Book. "Average New Car Price Tops $47,000." Edmunds. "Average Monthly Payment for a New Car Hits Record of $636." Experian. "What Credit Score Do I Need for a Car Lease?" ValuePenguin. "State of Auto Insurance in 2021." AAA. "Your Driving Costs."