Advertiser Disclosure
Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. MoneyCrashers.com does not include all banks, credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, Chase, U.S. Bank, and Barclaycard, among others.

Should You Become a One Car Family?


FEATURED PROMOTION


Additional Resources

Americans love our cars. Many families even own two or more — and they’re paying for it too. Based on 2019 calculations from AAA, the total cost of owning two cars could be anywhere from $12,120 to $25,114 per year.

If you’re currently part of a two-car family, you may have wondered whether you could save money by downsizing from two cars to one (or even live without a car entirely). The answer to that question is a definite maybe. 

For some families, becoming a one-car household leads to significant savings with little sacrifice. But for others, it’s too much effort for too little benefit. To find out if it’s right for you, you need to know how much you stand to save and what the alternatives are.

Cost Savings of Giving Up a Second Car

The most obvious benefit of giving up a second car is the money you get from selling it. That amount depends on the age and condition of your vehicle as well as your location. 


Motley Fool Stock Advisor recommendations have an average return of 372%. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now

For instance, Kelley Blue Book says a good-condition base-model 2016 Honda Civic with 50,000 miles on it could get you around $18,500 in October 2021 if you sell the car yourself. But the same car with 100,000 miles on it would only be worth about $13,500.

Either way, that money could be a big help. It could help you start an emergency fund or deal with an unexpected expense. Or it could go toward college savings or retirement savings.

But the financial benefits of becoming a one-car family don’t end when you sell the second vehicle. That car costs money to maintain, so getting rid of it allows you to reap ongoing savings year after year. The exact amount varies based on what car you have and how much you use it.

To figure out how much your family would save, you need to calculate how much your second car costs you right now. To do that, you need to add up all the costs of owning that vehicle, from the car payment down to the cost of a parking space. 

Car Payment

If you’re like many car owners in the United States, you still have an outstanding balance on your car loan

And if you do, paying it off reduces the immediate payoff from selling your second car. It could even reduce it to less than zero if you’re upside down on your car loan, actually taking money out of your pocket. 

But the extra cash you free up by eliminating that monthly payment could still make it worthwhile. If you’re currently paying $500 per month on your car, wiping out that car loan would give you an extra $6,000 per year.

If you’re leasing your second car, you can’t get an immediate payment from selling it. But you still free up a significant amount of monthly cash. 

Fuel

The yearly cost of fuel for a second vehicle varies widely. It depends on your car’s gas mileage, the number of miles you drive it each year, and how much you pay for gas. 

To figure your fuel costs, calculate the number of miles you put on your second car in a year. Divide that number by your vehicle’s gas mileage to get the number of gallons used per year. Then divide that by the cost of a gallon of gas in your area to find your yearly cost. (If you have an electric car, measure its fuel usage in kilowatt-hours instead.)

Giving up your second car might not save you that entire amount. You’ll likely put more miles per year on your remaining vehicle if you have to use it for all your errands and trips. But you can eliminate at least some trips with methods like carpooling, public transportation, and walking.

Insurance

Having a second car doesn’t necessarily double the cost of car insurance. So you can’t just divide your current policy price in half to find out what you’d save. 

If both your cars are on the same insurance policy, you can usually get a discount of up to 25% per year. So if you pay $1,000 per year to insure your first vehicle, the cost of adding a second vehicle could be as little as $750 per year.

You can get an accurate estimate by contacting your insurance company for a quote on a policy for just one car. 

Maintenance

Another cost associated with keeping two cars is maintenance. You have to pay for basic maintenance like oil changes and repairing the car when it breaks.

The more miles you put on your car each year, the higher maintenance costs are likely to be. AAA reports that the cost of maintenance ranges from $0.066 per mile for an electric vehicle to $0.096 per mile for a medium SUV. You can multiply these figures by the number of miles driven to estimate your yearly cost. See AAA’s driving costs analysis for the details.

But despite the extra miles on your primary vehicle, you still experience some cost savings. There are some regular maintenance jobs all cars require yearly, such as changing the air filter. Getting rid of the second vehicle means you only need to pay for those jobs on one car.

Registration

One cost you can eliminate by getting rid of a second car is the cost of registering it. This cost varies dramatically based on where you live. Each state has its own method of calculating it.

If you don’t know your yearly registration cost, check your state’s motor vehicle department website. If you can’t find it easily, search the site for “registration fee.” If your state only renews registrations every two years, divide the number in half to get your yearly cost.

Tolls

When you drive your second car, you don’t just pay for gas. Often, you have to pay tolls on highways and bridges.

The cost varies a lot depending on where and when you drive. In some areas, tolls are higher on weekdays than on weekends — and higher still during rush hour. And some bridges charge tolls going in one direction only.

If you only pay a $3 toll once per week, that adds up to just over $150 per year. That’s about the same as some families pay for one month of cable TV or cellphone service

But if you pay that same $3 toll going to and from work five days per week, 50 weeks per year, that’s $1,500 per year. That could be enough to cover all the insurance costs on your primary vehicle and then some.

To estimate your savings, think about all the trips you regularly make in your second car. Note which ones have tolls and how much they cost. Multiply that cost by the number of times per year you make the trip to get your yearly cost. If the list includes work, it will add up fast.

But getting rid of your second car might not save you the whole amount. If you switch to driving your primary vehicle to the same places, you still have to pay for the tolls. But if you switch to public transportation, walking, or biking, you can significantly lower or eliminate them.

Parking

Sometimes, a second car costs you money when you’re not even driving it. If you have to pay for a parking space — at home, at work, or while out and about — that’s another annual cost.

Parking costs vary widely based on where you live. According to a 2018 Statista report, the 10 most expensive U.S. cities for parking are Dallas, Detroit, Atlanta, Seattle, Boston, Chicago, Washington, Los Angeles, San Francisco, and New York City. Average annual parking costs range from $723 per year in Dallas to a whopping $5,395 per year in New York.

Of course, most cities aren’t nearly that expensive. Still, it’s another cost you must factor in when figuring out what it costs you to own that second car and what you could save by giving it up.

New Costs for Your Single Car

Giving up a car can also create new costs. You need another way to get around, and in some cases, that could mean using your remaining car more. 

For instance, if you and your spouse take two separate vehicles to work, perhaps you could carpool instead. However, if dropping your spouse off at work adds an extra 5 miles to the length of your daily commute, that adds up to about 1,250 more miles per year.

In other cases, you can use an alternative method of transportation. Some methods, such as walking, are pretty much free. But others, such as public transportation, have costs of their own. To figure out how much you can really save by becoming a one-car family, you must estimate how much these new costs will add to your budget.


Alternatives to Owning a Second Car

To figure out how much you’ll spend on getting around without your second car, you have to think about how you’re using it now. Grab a sheet of paper and jot down all the ways you currently use the car, such as:

  • Commuting
  • Errands, such as trips to the doctor or grocery store
  • Driving kids to school
  • Driving kids to events and activities, such as sports
  • Road trips

For each type of trip on your list, consider alternative ways to get there. There are lots of options to choose from, each with pluses and minuses.

Walking

You can make many short trips on foot. Aside from the wear and tear on your shoes, walking is completely free, and it’s excellent exercise.

But walking is much slower than driving. If it takes you an hour to walk to work, you’d have to get up an hour earlier in the morning and arrive home an hour later every evening. 

Plus, walking isn’t always an option. If your workplace is 15 miles away or there’s a major highway between home and work, there’s no practical way to make the trip on foot. And bad weather — heavy rain, snow, extreme heat, or poor air quality — can make walking uncomfortable at best and dangerous at worst.

Bike

For trips that are too long to make on foot, a bicycle can be a good option. A cyclist in reasonable shape can ride at about 15 miles per hour, so you can bike to work in less time than it would take to walk. Cycling can also be a good option for running errands, such as a quick trip to the grocery store.

Unlike walking, cycling involves some upfront costs. If you don’t already own a bike, you need to buy a bicycle along with some basic gear, such as a helmet, bike lock, and repair kit. A decent used bicycle plus a basic set of accessories will probably cost at least $200. 

And if you need it for errands like grocery shopping, you have to buy panniers or a trailer, which could easily cost $100 or more.

However, once you own the bike, it’s much cheaper to maintain than a car. Online bike retailer The Pros’ Closet estimates annual maintenance costs for a road bike at an average of around $185.

Like walking, cycling lets you get some fresh air and exercise. But cycling is still slower than driving. So there’s a limit to how long a trip you can reasonably make. And not all roads are safe for cycling.

If you’re looking for something with a bit more range than a standard bicycle, you could consider an electric-assisted bike (also called an e-bike) or a motor scooter. But these can cost much more to buy and maintain than a bicycle. 

Carpooling

If you’re too far away from your workplace to commute on foot or by bike, carpooling with one or more co-workers can be an affordable option. Even if you split the cost of gas, it’s much cheaper than owning a car.

For instance, suppose you currently spend $500 per year on gas for your daily commute. If you shared that trip with a co-worker, you would only pay $250 each. If you share with two co-workers, the cost would be less than $170 per person.

Of course, this arrangement only works if you happen to have co-workers who live near you and are on a schedule similar to yours. It also requires you to be on a strict schedule in the morning to avoid holding up your fellow passengers. On the plus side, it gives you someone to chat with during your commute or allows you to work while someone else drives.

Depending on your situation, carpooling may work for other trips as well. For instance, maybe your kids can carpool to school or after-school activities with their friends. You could even share a ride with a neighbor when running errands on weekends.

Public Transportation

Depending on where you live, you may be able to rely on public transportation, such as buses, subways, and trains, for many of your trips. Public transit can be a good option for commuting and short trips like errands.

In many areas, kids can rely on public school buses to get them to and from school. Even if there’s no official school bus, older children may be able to use public transit, eliminating the need for parents to drive them to school.

Commuting by transit allows you to use your time productively rather than staying focused on the road. It can also be less stressful than driving in rush-hour traffic. And you don’t have to worry about finding a parking space when you get there.

But public transport is only reliably available in some cities and suburbs. And even then, there isn’t always a route that takes you where you want to go. It may require changing trains or buses multiple times or walking, making your trip much longer.

As for the cost, that depends on where you live. According to the June 2017 Transit Savings Report from the American Public Transportation Association, a person who switches from driving to transit for their daily commute can save nearly $9,800 per year. 

However, that figure is based on average costs for transit, gas, and parking. Costs in your area may be higher or lower.

Ridesharing

Carpools and mass transit can’t always take you where you want to go. And thanks to modern ridesharing apps like Uber and Lyft, you can simply pay someone to give you a ride. 

Ridesharing is convenient because you can have a car show up exactly when you need it and take you wherever you want. It’s best for trips you only need to make occasionally. For example, you could call an Uber to take you to the airport or a doctor’s appointment. 

However, it’s probably too expensive to rely on for commuting and other routine trips. As of mid-2019, Statista put the cost of the average trip on either Uber or Lyft around $25. Moreover, ridesharing apps charge extra during busy periods, so hiring one during rush hour is likely to cost far more than taking the bus or even hiring an old-school taxicab.

Car-Sharing

Another option in some areas is car-sharing. Services like Zipcar give you access to a car you can use when you need it. It’s less expensive than owning a car because you share the ownership costs with the other people who use the service.

The exact amount you pay varies depending on where you live and the service you choose. There may be multiple fees, such as a membership fee when you join, a monthly fee, and a per-use fee.

For instance, in New Jersey, Zipcar costs $9 per month or $90 per year, plus $12.50 for each hour or $103.75 for each day you use the car. That covers everything, including gas and insurance.

On a per-hour basis, services like Zipcar can be more expensive than public transportation or even ridesharing. However, they’re a good choice for longer trips, such as a weekend getaway, when you need a car to get where you’re going and to get around while you’re there.  

But this service is only available in some locations. Zipcar operates in over 300 cities in the U.S. and Canada, but you generally find them in densely populated areas. 

Car Rental

In some cases, a conventional car rental could be cheaper than a car-sharing service like Zipcar. Rental car prices vary widely based on your location, the company, and the type of vehicle, so it’s impossible to say exactly which costs less per day. You need to check prices in your area to compare them.

However, rentals have one significant advantage over car-sharing: there’s no monthly fee. You pay for a car only on the days you use it. So if you need a car only a few times per year, you’re likely to spend less with a rental car company.

In many areas, an even cheaper alternative is renting a car from a peer-to-peer (P2P) marketplace, such as Turo or GetAround. These services connect people who need cars with others who have cars they aren’t using.

P2P car-sharing services operate in more areas than fleet-based services like Zipcar. For instance, Turo is available in over 5,500 cities in the U.S. and Canada and offers cars for as little as $25 per day. Costs vary depending on your location and the vehicle you choose.

Reducing Your Transportation Needs

A final method for managing without a second car is simply to reduce the number of trips you take. It’s the most efficient option because you don’t need to spend extra time or money on an alternate method of transportation.

For example, you can eliminate your daily commute by working from home. 

Working from home isn’t an option for everyone, and even those who can may not want to do it all the time. But some workplaces allow employees to take a hybrid approach, going to the office on some days and telecommuting on others. 

By traveling to work less often, you can reduce your need — and hence your cost — for public transportation or car-sharing.

Another way to reduce your transportation needs is to combine errands. For instance, suppose you typically pick the kids up from day care after work while your spouse does the grocery shopping. Even if the errands are in the same area, you’re taking two separate trips in two separate vehicles.

It’s much more efficient to combine the two trips. That way, you only need a single car to make them both, and you use less gas. The more errands you can combine into one trip, the more fuel and money you can save.


Final Word

Saving money isn’t the only perk of becoming a one-car family. For instance, if you spend less time driving and more time walking or cycling, you get more exercise. Switching to walking, biking, or transit can also make your commute less stressful. And if you do less driving in total, you’ll also pollute less, making your lifestyle greener as well.

However, sometimes, not having that second car causes more stress. If your spouse has a meeting at work at the same time you have a doctor’s appointment, it’s much harder to make it work with one car instead of two. But you can minimize the stress by anticipating and planning for these occasions.

Moreover, both the costs and benefits of becoming a one-car family vary widely depending on your situation. For a family with one freelance worker and one stay-at-home parent, the benefits can easily outweigh the costs. But for a family with two full-time workers and three school-age kids, it’s usually the other way around.

It isn’t a simple decision. The only way to figure out what’s right for you is to do the math for yourself. Figure out how much you could save, then discuss the idea with your family to see how they feel about getting by with one car. If everyone agrees it makes sense, you can take the plunge feeling confident in your choice.

FEATURED PROMOTION

Stock Advisor

Motley Fool Stock Advisor recommendations have an average return of 372%. For $79, or just $1.52 per week, join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee.

Stay financially healthy with our weekly newsletter

Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

FEATURED PROMOTION