The modern values of millennials along with the sharing economy have changed the way they view car ownership with many placing a higher value on car access. Access to cars has never been easier with ride sharing services such as Uber and Lyft, and car subscription services like Carly.co. In this day and age it is no longer necessary to own a car. Below are some alternatives to buying a car.
Alternative to Buying a Car #1: Ride Sharing Services
For a millennial living and working in the CBD it makes perfect sense to forgo a car all together. With services such as Uber and Lyft available at the touch of a button, it’s never been easier or more convenient to get to where you need to be.
According to Budget Direct, the average cost of running a car in Sydney is $428 per week (approx. $22,000 per annum). This is made up of loan repayments, registration, CTP and licence costs, insurance, servicing and tyre costs, fuel, toll road costs and roadside assistance. Plus, there are the other costs such as cleaning your car and the stress of driving in traffic.
Depending on your travel needs, many millennials would spend much less than $428 per week using a ride sharing service. While doing away with your car isn’t for everyone, it does make good financial sense for people with a short commute, a high insurance premium due to a history of poor driving and anyone who pays to keep a car that doesn’t get used very often.
Alternative to Buying a Car #2: Subscription Services
These services let you essentially rent a car for a regular fee. The subscription fee generally covers the rent, insurance, registration, maintenance and assistance, leaving you to cover the cost of fuel. Flexibility (as well as driving a fancy car!) is attractive to millennials which makes this a great option as you can upgrade or cancel the subscription at any time, so you will never get bored of driving the same old car around and you’ll have endless New Car pics to post to your Instagram.
Services such as Carly.co have subscriptions starting at as little as $115 per week (approx. $6,000 per annum). You need to pay for fuel on top of this price but it’s probably pretty safe to say that you won’t be coming close to the $428 per week it costs to own a car.
For the millennial with ever changing life circumstances, these car subscription services are the perfect answer. Rather than buying a car and being stuck with it for a few years, you can downgrade or upgrade your rental car as your needs change. For example, a small, cheap car is perfect for running around in while you’re single, upgrade to impress your date, then upsize when the kids come along, all without having to deal with car salespeople or the hassles of the private market.
Renting a car also means that you can have the car of your dreams without having to outlay your own capital which gives a great opportunity to invest your capital elsewhere and make your money work smarter.
Car access over ownership gives so much flexibility for people to have the financial freedom to live their life exactly the way they like. With the modern travel options available and the alternatives to buying a car, millennials are spoiled for choice regarding how they get around.