Dear Carrie: My husband and I each have a car. We're retired, and our son keeps saying we could save a bundle by ditching one and using a ride-hailing service instead. What do you think? — A Reader
Dear Reader: Your son has a point. As the world of transportation continues to change dramatically, the old ideal of the two-car family is meeting with some practical skepticism. With ride-hailing services such as Uber and Lyft becoming almost ubiquitous in many areas and car-sharing companies such as Zipcar and Car2go becoming more available, do we all really need our own set of wheels?
As is often true, especially with lifestyle options, young people have been quicker to adopt these new technologies than older generations. According to a 2016 Pew Research Center report, close to 50 percent of 18- to 49-year-olds have used a ride-hailing service, whereas only 4 percent of Americans 65 or older have done so. I'm certainly not suggesting that people ditch their cars, yet the existence of these alternative services can be a starting point for evaluating just how important it is to each of you to have your own vehicle.
Getting rid of a car isn't a quick decision. There's no doubt that being a one-car family could save you money, but you also have to balance the cost with convenience. Let's start with the cost.
Calculate How Much You Could Save
Even if you're a good budgeter, chances are you've never calculated how much your cars cost you per year. Apart from a car payment, you have insurance, annual registration, maintenance, fuel costs and parking fees. Have you ever added it all up?
Here's a figure that may be eye-opening: An August 2017 report by AAA estimates that the average annual cost of owning a new vehicle is nearly $8,500. Even for those whose cars are paid off, the costs add up. The average consumer spends close to $5,000 a year just for gas, oil and other car expenses, according to a 2016 report by the U.S. Bureau of Labor Statistics. In fact, according to the BLS, transportation is the second-highest cost for individuals 65 or older; only housing is higher.
Of course, the figures above are just averages. A lot depends on where you live and the type of car you drive. So for starters, I'd suggest that you and your husband do the math. What does each car really cost you per year? Is one car more of an economic drain than the other? Then look at how many miles you put on each car annually. Does the usage warrant the cost?
Look at Your Transportation Alternatives
The ability to get around with public transportation or ride-hailing services depends on where you live. If you're in a city or close to an urban center, you probably have a lot of options, even if you live in the suburbs. If you're in a more rural area, you may have to do a bit of research to discover your alternatives. So first determine what your options are. Is there convenient bus or train service in your community? Does a ride-hailing service regularly operate in your area? Another interesting service is GoGoGrandparent, which charges a concierge fee to manage your rides through Uber and Lyft.
After you discover your local options, you'll also want to compare the relative cost. Transit services often have cost estimators on their websites. Ride-hailing companies also have cost estimators on their sites that let you input a starting point and an ending point to determine the average cost of a ride. If you have a regular route you follow, you should be able to come up with an estimate for the cost per trip. You may find that you could get where you need to go for a lot less than your car is costing you.
Figure Out How Often You Actually Use Your Cars
Some couples go in very different directions in the course of an average week; others pretty much move in tandem. Especially when you're retired, you may find that you actually travel together more often than not. If you and your husband have different schedules and destinations, two cars may be warranted. But if you find that one car often stays in the garage, it may be worth retiring it for the savings.
Come to an Agreement With Your Spouse About Who Gets the Car When
Also, let's be honest. There's an emotional side to having your own vehicle. The sense of freedom having your own car gave you at 16 doesn't necessarily change just because you're 60. If having your own car is central to your feeling of independence, that's an important consideration.
If you do decide to become a one-car family, the last thing you want is to tussle over who gets to use the car. Make sure you're each aware of any regularly scheduled trips so that there's no misunderstanding — and no missed appointments. As with any change, talk it through and agree on how you'll manage with one vehicle.
Put the Extra Money to Good Use
Going back to the national averages, getting rid of one car could save you several hundred dollars a month. So what will you do with it? Figure out where that extra money could best supplement your retirement budget. If you have the basics easily covered, maybe it goes into a travel or entertainment fund. Or maybe you decide to add to your emergency cushion. Whatever is best for you and your husband, giving up a car will seem less of a burden if you consciously use the savings to enhance some other area of your life. You might even treat your son in some way to thank him for his sage advice!
Carrie Schwab-Pomerantz, Certified Financial Planner, is president of the Charles Schwab Foundation and author of "The Charles Schwab Guide to Finances After Fifty." Read more at http://schwab.com/book. You can email Carrie at [email protected] The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.