Ten years ago, car sharing meant jumping into the passenger seat of your friend’s ride. Today, it means you have the ability to drive yourself, without the ongoing responsibilities of car ownership.
As someone who doesn’t live in the same area as I work, I was an eager adopter for the convenience of the carsharing model. But having considered purchasing a car in the past, I was curious to know:
“How much money am I saving by forgoing car ownership?”
“Are the savings worth forgetting about the pride and status symbol of having my own ride?”
To find out, I calculated the costs for using two of the most popular carshare providers, ZipCar and Car2Go, then put them up against the costs of owning a compact car.
How does it work?
Firstly, there are two big providers in Canada: Zipcar and Car2Go (others are smaller, more province-specific and won’t be covered).
Essentially, they both work in a similar way:
You search for the nearest car using your mobile device or computer, reserve your vehicle, hop in and drive to your designated location.
With Car2Go’s pay-as-you-go model, you can drive one-way and conveniently leave the car at your destination for the next person.
Zipcar on the other hand, is a round-trip car rental service. This means you have to reserve the car in advance and once you’re done, you have to return it to the same spot you picked it up at.
To figure out how these services compare economically, I calculated the cost of running each vehicle on a per kilometer basis.
Vehicle Assumptions for cost comparison
Here are the assumptions I made to ensure the data was as accurate as possible:
All costs include GST & PST.
Car purchase source: http://honda.ca/automotive
Cost Comparison Km / Week
The graph below shows a comparison between Car ownership (Honda Civic) , ZipCar and Car2Go given the assumptions above.
Results from the price comparison
Where Zipcar loses out on convenience, it wins on cost, since their rates are lower than the per-minute model of Car2Go. Car ownership has a much higher upfront cost, however – there is a much smaller cost increase over distance travelled compared to Zipcar or Car2Go.
For me, since I’m very active and don’t live too far away from where I need to go – my car usage does not exceed 10km per week.
Given this scenario, I’m saving a whopping $4000 per year!
Are the savings worth forgetting about the pride and status symbol of having my own ride?
Despite the size and distance limitations of using Car2Go, a cost-saving of $4000 per year is substantial enough for me to forgo owning a car, and I would definitely consider using Zipcar should I require more frequent transportation.
Which option fits your needs?
< 10km per week: Car2Go
If you’re like me and use a carshare service sporadically (under 10km per week) and for convenience, Car2Go will be the cheapest option.
10km – 350km per week: Zipcar monthly
In the case where your car usage will exceed 10km but stay within 350km per week on a consistent basis, the Zipcar monthly plan will work better for you. Just bear in mind their rates will fluctuate depending on the type of car and the day of the week.
350km + per week: Car ownership
You would be looking to drive around 350 kilometers per week to justify the cost of purchasing a Honda Civic from a purely financial standpoint. But of course, there will always be cases where family or lifestyle requirements offset the cost benefits of forgoing ownership, which is a judgement call you will have to make.
Carsharing options for longer trips
Of course, there are scenarios where you might need a car for a longer period of time, such as taking a day trip out of the city or a weekend away.
Car2Go does offer an hourly maximum rate of $14.99 plus tax, or a daily rate of $84.99, so the costs displayed in the chart above may be lower depending on your pricing level (if you’re taking longer, less frequent trips to fill the distance).
Zipcar also offers $50 – $250 of prepaid driving which makes sense for someone with a longer distance to travel than what is examined in my example. Daily rates work out at $76 per day, but only makes sense if you’re driving frequently, since you will either have to pay $70 per year membership fee or the $7 monthly plan.
Considering a car purchase but aren’t sure how much it’s going to cost? You use CAA’s driving costs calculator to approximate your yearly costs.
Car sharing costs may vary by location and the above calculations were made based on pricing in the Vancouver area.