Why You Should Sell Your Car & Hire Uber | You Might SAVE Money
Living in downtown Grand Rapids, many times we can walk to meetings, photo sessions and other cultural activities that friends of ours have to drive 30 minutes to enjoy. It's a great perk of being in the downtown neighborhood.
One of the questions we get asked over and over again is, "Where do you park?"
Our answer to the question is always ready:
"We only have 1 car for the two of us and we pay to park in a city ramp next to our building. If we have to be in 2 places at once, we simply use Uber for transportation."
The next question is usually something like:
"Doesn't that get expensive, using Uber all the time?"
So I thought I'd share what 2016 looked like for us using Uber as our second car.
To be fair, my wife and I do live right in downtown Grand Rapids. We have been used to being a 1 car family for almost all of our marriage AND I work from home much of the time (but not always).
In 2016, we spent a total of $784.46 on 101 Uber rides.
That averages out to 2 Uber rides a week and our driving/riding playbook usually looks something like this.
I have to be somewhere for a photo shoot at 3pm but my wife has a 3:30pm meeting somewhere else in Grand Rapids. She drops me off for my 3pm photo session and then when I'm done, I simply Uber home.
If you average the cost out per month, our average monthly spend for 2016 was $65.38 and our "per trip" cost was $7.77.
Compare that to the total cost of owning a car, which in 2015 was $725 per month according to AAA.
The cost of owning a car is not just the monthly payment. If you've owned a car you know there is more to it than that. Things such as fuel, tires, maintenance and repairs, taxes, license and registration fees, insurance premiums and interest all factor in to the cost of ownership.
In 2015, the average monthly payment on a car in the USA was $482. That means car owners are spending $243 a month on all the other things that go along with a car payment even when you don't have a payment.
So what does all this say about selling your car and riding daily with Uber?
Let's compare the current average spend of $725 a month in ownership with using Uber on a regular basis.
Perhaps in the next 12 months you think you will use Uber more than our 101 times in a year. Ok, fair enough.
Let's not just 2x your trips, let's 4X your trips and see how the math works out.
If you needed 404 rides in a year and it was an average of $8 per ride, that would total $3,232 for the next 12 months.
Does that seem like a lot to you? It's the same as 4.5 months of car ownership.
That means if you got rid of your $725 cost per month to own the car, you would have 7.5 months of EXTRA money in your life.
If each of those months was $725, you would keep $5,437.50 in your pocket (and not put it in your gas tank).
Many people we meet would love to travel more, save for retirement, save for kids college education, pay off debt, etc.
Imagine if you had an extra $5,000+ every year to do just that?
How much FASTER could you pay off the last $18,000 in student loans you have? How about the $3,000 credit card bill that built up last Christmas?
Another scenario: say you don't have a car payment and out of pocket cost is only $243 a month. That means you are spending $2,916 a year on total cost of car ownership.
Even though you'd be paying an extra $316 over the course of 12 months ($27 a month), you would never visit the mechanic again. You'd never have to stop and get gas. You never have to change your cars tires or get an oil change.
If you value your time, you might consider giving up owning a car altogether to have your own personal driver with Uber.
You call them, they show up with a clean car knowing exactly where you want to go. Sometimes providing you with a bottle of water or a small snack. Always eager to hear about your day and find out who you are and what you're interested in.
I know our situation may be unique and I know what you're thinking:
"But Russ, my situation is different. I go one way to work, my wife goes another way. She drops the kids off and I pick them up..."
I know how you feel. During her previous career, my wife commuted 75 miles to work, one way. She did this everyday for 6 years.
Yes, this takes a little planning and communication. But what we've found is that even if we change the scenario for a case like yours, the scales may tip toward having Uber as your personal driver.
And in the end do you really care about the car that much if it makes financial sense?
If you can take your wife to Hawaii every year because of a $5,000 swing in your finances because of this article, then you really shouldn't care.
And just because we like you so much (and because you got through this entire article), we thought we'd give you a little something.