Many of us share transportation by taking the bus, train, or subway, but these systems rarely satisfy all of our transportation needs. As a result, the rate of car ownership in the United States is enormous. In fact, we have more cars than licensed drivers. Here are some reasons to find alternatives:

  • Money. Most studies show that between 10% and 19% of our household budgets are spent on transportation. According to the American Automobile Association (AAA), in 2008, the average annual cost to own and operate a mid-sized sedan driven about 15,000 miles was $8,273.
  • Time and stress. It's not easy getting from here to there, especially when there is so far from here. According to an ABC News poll, people who drive to work average almost an hour a day in commute. Getting places can be stressful; it even sends some people into fits of road rage.
  • Efficiency. The way most of us use our cars is inefficient. Most cars spend most of their lives sitting in a parking space. When they are on the road, cars have only one person inside 85% of the time.
  • Our neighborhoods. Because we own so many cars, much of the architecture of our society has been built to accommodate them: roads, parking lots, gas stations, and so on. Parking lots and spots are valuable real estate—in urban areas, the value of the land you park on could be $5,000 to $8,000. Imagine what our communities would look like if even a fraction of the parking spaces were converted into park land (or community gardens), or some of our streets were closed to through traffic. One study showed that the more cars that drive down a street, the less likely people are to know their neighbors. Heavy traffic also deters people from walking or riding their bikes.
  • Our planet. Driving cars puts toxins into our oceans, waterways, and the air we breathe, and it releases carbon into our atmosphere. The manufacture of cars requires us to continually mine our planet's natural resources. Our need for fuel leads to drilling for oil, which has caused many ecological disasters.

This chapter explains some solutions to the high cost—to our wallets, our communities, and our planet—of car ownership. How much can you save by sharing the cost of a car or a ride? The worksheet below will help you figure out your annual car expenses and how much you could save by sharing your car or carpooling. You may be surprised at how the numbers add up!

Start by calculating your current car expenses. You may wonder why we didn't include the cost of your car itself on the table below. This cost will appear on the table in the form of depreciation, which is the value your car loses as it gets older and you put more miles on it. (See "Calculating Depreciation," below, for tips on calculating the year-by-year depreciation of your vehicle). The interest you pay on your car loan is a separate expense—it represents the cost of your car loan, not the car itself.

To figure out how much money you would save if you shared a car or carpooled, you'll need to consider three kinds of costs related to cars. First, there are expenses that don't depend on how much you drive, such as registration costs. Second, there are costs that increase somewhat with mileage or additional drivers, such as insurance premiums. Third, there are costs that are closely tied to how much you drive your car, such as fuel expenses, depreciation, and maintenance.

If you are calculating how much you'll save if you share your car with one neighbor, you will be able to cut the first kind of cost—fixed costs—in half. For costs that vary somewhat, you will likely pay a little more than half. And for costs that rise in direct proportion to your driving, you will pay approximately the same amount as you do now, unless you change how much you drive as well.

To calculate how much you'll save if you leave your car at home and carpool with others to work five days a week, first figure out how much of your driving is spent on your work commute. If driving to work makes up 80% of your total driving, you will be able to cut most of the variable expenses—like gas and maintenance—by up to 80% (depending on whether you share costs with your fellow carpoolers). You may be able to eliminate other major costs, such as parking and bridge tolls. And once you tell your insurance company that you've cut your driving significantly, it may reduce your rates.

If you give up your car entirely and join a carsharing program, you can erase most of the expenses below and start fresh with a new number based on the carsharing program's rates, which are usually based on how many hours and miles you drive the shared cars. Chances are you'll save thousands of dollars.

Worksheet: Annual Car Expenses
Type of ExpenseAnnual CostsCosts to Share a CarCosts to Carpool
Annual registration cost
License fees
Smog check (where applicable)
Insurance (average is $850 per year)
Interest on car loan (finance charges)
Roadside assistance program membership
Maintenance (regular replacements, tires, fluids, filters, tune-ups, windshield wipers, cleaning)
Major repairs
Title fee and transfer tax (usually applies only when car changes ownership)

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