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Financial planning tips

July 09, 2012

Should you give up your car?

When you weigh the costs of owning your car against how much you actually use it, you may decide it’s time to park it for good.

When Pippa and Jason Van Dam’s 11-year-old car broke down again last winter, they feared a steep repair bill. With a three-year-old daughter and a baby on the way, it was likely time for a replacement vehicle.

Or was it? They started asking themselves whether they needed a car at all.

New monthly car payments, gas, insurance, parking and regular maintenance might be a necessity for those who use a vehicle regularly, but consider the Van Dams’ situation. They both take public transit to work and walk their daughter to and from preschool. They shop for groceries and other small items on the way home from the office or at stores within walking distance from their home. They used their car generally only on weekends for excursions to places such as the zoo or a relative’s home. Why fork out a huge amount of money for something they barely used?

Car-sharing brings big savings

The solution for the Van Dams: joining a car-sharing program. Their choice has three locations within a 10-minute walk of their Toronto home. They simply rent a car by the hour or day when they need it, generally once a week.

Pippa, a marketing director, says they pay just over $200 a month for their membership, which includes gas, insurance and maintenance. Car seats are a bit tricky but not unmanageable. One of them will pick up the car, bring it home and pop in the seat. Pippa estimates she and Jason are saving $5,000 a year by not having a car of their own – money they can put towards other expenses.

“We’re a young family, we have childcare costs and a mortgage, so we have to watch where we spend our money,” explains Pippa. “This was one way we could save and maintaining a car is one fewer stressful thing to worry about.”

More walking can boost fitness

Natasha MacFarlane, a Toronto-based digital consultant, decided the same thing. She says that when she lived in Kitchener, Ont., she needed a car for the work commute and daycare run. Public transit was too spread out and it would take her too long to accomplish what she needed to. Since moving to Toronto two years ago, however, she found herself using the car less and less. So last March, she chose not to renew her lease. She and her three school-aged kids get by on public transit and simply walk more. She notes that in a few months, she’s lost five pounds and counting.

Of course, not having a car can mean saying good-bye to spontaneous excursions to places not close to home. You have to plan out things more, notes MacFarlane. When she had her car, MacFarlane used to drive her kids regularly down to the beach, spend an hour there and come home. Now, it takes too long on transit to do that: “We’ve changed what we do recreationally. We discover more things in our neighbourhood now, and we do something that’s close by.”

Sometimes, MacFarlane misses the simple pleasure of driving, but the economic savings outweigh the convenience factor.

If you’re thinking about parking your car for good, Pippa Van Dam recommends experimenting for a month before committing. “It’s interesting to see what impact it has on your life,” she says. “We find not having a car makes us a little more active. If it’s cold weather or raining, we might have driven our daughter to daycare. Now we can never do that, but you get used to it.”

Thinking of parking your car for good? Ask yourself:

  1. How much do you pay for car-related expenses? 
  2. How often do you use your vehicle? 
  3. Do you live near reliable public transit? 
  4. How long does it take you to get to work by bike or public transit? 
  5. How far do you live from grocery stores and community services? 
  6. Do you live near a car rental or car-sharing service?

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