How to Save Big Bucks by Being a One-Car Household

Have you ever wondered about being a one-car household? If you’re single, have you ever imagined living without your own vehicle?

There was a time when either of those ideas would have seemed impractical, unrealistic or unpopular. Car ownership used to be considered a rite of passage and a goal for many of us after getting our driver’s license as teens. A vehicle is frequently the first major purchase we make — or the first thing we finance.

But keeping a car is costly, and costs keep rising. There’s fuel, insurance and the ever-present worry about upkeep. When you own a car you also deal with registration fees and parking expenses, whether at work or when dining out or attending events.

During the early months of the pandemic, when many people stayed home, the streets were quiet. Fewer trips meant fewer miles driven. News reports highlighted temporary environmental improvements during that period.

Now life is gradually returning to normal. Does that normalcy automatically require having a second vehicle available at all times?

4 Things to Weigh Before Becoming a One-Car Family

Below are factors that make switching to a single-vehicle household feasible, and reasons you might want to consider it. Use these points to evaluate your family’s circumstances.

1. How Many Drivers Live with You?

This may be the primary consideration. A household with two adult drivers is often the easiest situation for transitioning to one car. Coordinating schedules tends to be simpler. With more than two drivers, you’ll need greater patience and cooperation.

For instance, if two adults and two driving teens live together, relying on a single car could be chaotic unless you’re in a city with strong public transit. That said, with planning and attention to schedules you might be able to reduce from three cars to two.

2. Commutes for Work and School

If everyone has jobs or classes that require leaving home, and destinations are distant enough that walking or transit aren’t realistic, then a two-car setup might be necessary.

However, if some family members work from home or attend school online, the count of needed vehicles can be reconsidered. That could enable a shift to one car.

3. Proximity of Essential Places

Aside from commuting, what regular trips are essential? Groceries, of course. Are there other locations you must visit frequently? Are any of those within walking distance? Consider whether someone working from home could drive you to an appointment during a lunch break.

Compare the cost of a round-trip Uber or Lyft from the places you frequent. It might be cheaper than the prorated cost of gas, insurance and maintenance. Remember, though, rideshare fares have increased recently like many other expenses.

4. How Often Are Both Cars in Use?

On a typical week, how much time do both household drivers spend on the road at the same time? Or, flip the question: how many hours in a normal week does at least one car sit unused in the driveway?

What Owning a Car Actually Costs

Vehicle ownership is more costly than ever for multiple reasons. The pandemic pushed the average new car price to roughly $40,000, and used car prices surged by about 40%. And those figures don’t cover the full spectrum of ongoing costs.

Rising ownership costs might be prompting you to contemplate shedding a vehicle. Alternatively, selling a car now could fetch a good price on the used market and sway your decision.

The table below uses 2021 figures from move.org showing annual ownership costs. The national average is $5,265 per year for payments, fees, fuel and upkeep. Shown are the costs in the five highest- and five lowest-cost states.

Annual Cost of Car Ownership at a Glance

Monthly Car Payments

Are you making loan payments on one or both cars? Payments for newer vehicles commonly hover around $500 monthly, and one loan may be larger than the other. Selling one car is a quick way to reduce monthly expenses.

Fuel Costs

Gas prices reached record highs in spring 2022. In early April, the federal government released millions of gallons from the strategic petroleum reserve to ease prices, but that’s a short-term measure. Consider:

• How much do you budget weekly for gas?
• How often do you refill?
• Would you save money if you only had to fill one vehicle each week?

Insurance Premiums

Depending on your age and driving record, car insurance can be one of the pricier line items in your budget. The U.S. average for full coverage is about $1,655 per year, roughly $138 a month. While insurers often discount multi-car policies, insuring two vehicles still costs more overall than insuring only one.

Routine Maintenance

Scheduled upkeep includes oil changes and replacing tires, plus wipers and brakes. AAA estimates the average annual cost of routine maintenance at about $792, depending on mileage. That doesn’t include major repairs that older cars may require once warranties expire.

Registration and Licensing

Many states use vehicle registration fees as a revenue source, and raising renewal fees is a simple way to increase funds. Oregon has among the highest registration costs—between $268 and $637 for new cars. Florida charges a $225 new registration fee. In contrast, Arizona’s fees are a fraction of those amounts.

Renewal costs vary by state, and some jurisdictions levy higher registration fees for electric or hybrid vehicles than for gasoline models. Many towns also require an annual vehicle sticker, which can reach $100 in some areas.

Parking Expenses

If you own or rent a single-family home, parking is usually free. But if you pay for a garage space, that’s an extra cost. Plus, when you go out, you may need to pay for parking at venues or in city centers.

Tolls

In regions with toll roads or bridges, you’ll likely need an electronic toll device on your windshield. There’s often an initial purchase fee for the transponder, and you must top up the account. Frequent toll usage raises your driving costs.

Costs for Ride-Hailing and Rentals

Uber or Lyft expenses depend on your location and trip distance. To decide if you can do without a second car, estimate how often you’d summon rides and how far you’d travel.

Keep in mind you’d need many rides to match the yearly cost of owning that extra vehicle.

For occasional longer trips, consider renting. Kayak noted that the average daily rental rate rose to $81 as of December 2021. What’s your extra vehicle’s daily cost equivalent, and how often would you need to rent?

Delivery Fees and Their Impact

Delivery services, especially for groceries, have added a new dimension to the car-ownership discussion.

How often do you use a second car to pick up items you could instead have delivered? Delivery has a cost, but if it’s modest it could support moving down to one vehicle.

Public Transit Availability

Buses and trains often reach near the places you need to go regularly.

The U.S. Census Bureau reports that most public transit commuters use buses, followed by subway/elevated rail, commuter trains, and then streetcars (where available).

For many suburbanites traveling between suburban areas, buses may be the only transit option, which can be inconvenient given spread-out stops and schedules.

Balancing Cost Against Convenience

Oscar Wilde observed that “a cynic is someone who knows the price of everything and the value of nothing.” We’ve reviewed the costs of owning a car versus using rideshares and transit. Now let’s consider perceived value.

Do you enjoy seeing a vehicle parked in your driveway or assigned spot, ready to go whenever you need it? Now factor in what you pay for that ease. Is it worth the expense?

Vehicles have environmental consequences, and while losing one car may not drastically change emissions, it could influence how you view your environmental footprint. Maybe removing a vehicle is a way you want to contribute.

There’s also a psychological trade-off when giving up a second car: some people feel a loss of freedom. Conversely, if you care about the environment, keeping two cars when one would do can also feel troubling.

How to Share One Car

Here’s another thought: remember the lessons of sharing learned in school.

To successfully downsize, establish a routine schedule for driving. Consider both drivers’ needs. Will one person own the car and the other borrow it? You should agree on ownership and usage before becoming a one-car household.

You may need to log appointments and work shifts in a shared calendar on your phones via Google Calendar or another app. Or you might prefer an old-fashioned paper calendar on the fridge. Either way, relying on one vehicle will push you to be more organized.

Frequently Asked Questions About Moving to One Car

Here are answers to common questions about reducing the number of cars in your household.

Yes, it can work, depending on your family size. But it takes planning, sharing, willingness to use public transit or rideshares, and a readiness to walk when feasible. If those options aren’t possible, going to one car will be tough. Urban residents generally find it easier to be a one-car household due to better transit options.

Owning two cars is certainly pricier than owning one. You must insure both (though multi-car discounts exist), maintain both, and register both. If you have loans on both, that doubles monthly financing costs. That said, if only one car is used at a time, some expenses like gas, parking and tolls don’t double.

Although insurers typically offer multiple-car discounts so the per-vehicle premium falls, you’ll still pay more total to insure two vehicles than you would to insure a single one. The difference won’t necessarily be double, and rates depend on vehicle age, make, usage and where you live. Cars in large metro areas often cost more to insure than those in small towns.

It could temporarily lower your credit score because applying for a second loan triggers a hard inquiry. Having two car loans affects your debt-to-income ratio, which factors into credit scoring.