One common talking point with local car rental subscription services1. is that it will save you a TON of money. This is often based on cost of ownership estimates of around $10,000 per year. Here’s an example from Zipcar’s website breaking down how they get there:
With those assumptions, they calculate an annual cost of $9,684 per year:
Which looks quite good when compared to what Zipcar estimates I’d spend on their service annually:
To me, that seems inflated because people giving up their cars for car rental probably aren’t paying anything near that to own a car. For example, I plugged in what I believe are accurate costs for my 2007 Honda Civic. This car was purchased new and financed for a short period, so there were some finance charges to divide over the past 84 months. And I divided the purchase price by the KBB trade-in value and divided that by 84 months to account for depreciation.
I don’t pay for parking where I live, and assume I’d pay for the same amount of parking while out on the town, so that’s a wash. I have a garage I pay to maintain, but that’s not going anywhere. Our maintenance costs would be lower if we didn’t crack our front bumper jumping snow berms, but we don’t seem to be willing to change our behavior.
With those numbers plugged in, it looks like it costs around half of Zipcar’s default calculation to keep my car on the road:
But, that’s the cost of keeping my primary car on the road. I imagine that a large number of people considering using services like Zipcar are considering the switch by dropping their second car. In my case, the second car in our household was a Saturn wagon purchased used for $6,000 and driven for 12 years. I haven’t dug up the costs of keeping that car on the road, but they were surely lower than the Civic since it was driven less and maintained to different standards.
Anecdotally, this particular model of car rentals seems to be doing better with people going from zero cars to having some access than from people going from two to one or one to zero owned cars.
While there probably is someone who’s making car payments on a relatively new car (but, with lower maintenance costs), and paying a premium for car storage at home, who happens to live near a rental subscription location with reliable availability, that scenario seems very uncommon in most of America.
1. Often misleadingly described as “car sharing”, which is a twisted term to describe paying an Avis owned company for short term access to their car fleet.