Should You Own a Car or Rely on Transit?

white and red train beside building at daytime
by Advice Chaser
by Advice Chaser

We are all trying to save money, and not all of us can work or study remotely. For those of us who have to get to work or school, is it more cost efficient to drive a car or take public transit? 

The real answer is that it depends. It primarily depends upon where you live. There are other variables that affect the savings though. Here are some general notes to consider comparing the differences for your situation. 

white and red train beside building at daytime

The Case for Driving a Car

Americans love their cars. You can travel alone, set your own schedule, and go anywhere you want. If you live in the suburbs, which were designed to be navigated by car, you probably already own a vehicle. Already owning a car and living in a place designed for car ownership are two good reasons to stick with what you’re doing. 

In many areas, it’s not even a question. Public transit is spotty or nonexistent, or there are no routes going from your home to your work at the time you need. People who work odd hours may have a more difficult time finding a commuter bus or train than those who work 9-5.

In other areas, transit exists but it costs so much it doesn’t seem worth it. Especially if you have free parking at work, paying for transit will incur an obvious cost you wouldn’t pay otherwise. Sometimes, you have to drive to the train station and park there—which can come with a cost also.

You may also find you need a car to get to places other than your work. If your doctor, grocery store, close friends, or gym aren’t on the transit route, you will need to own a car even if you don’t have to drive it to work. If your work requires frequent travel out of town, a car may be useful for getting to the airport.

The Cost of Car Ownership

However, experts generally agree that, if you live in a city with reliable public transportation options, owning a car costs a lot more than taking transit. According to Experian, in 2022 the average monthly payment on a new car is $667. That’s already a lot, but that’s not all. You may pay another hundred dollars for your insurance, plus another hundred dollars for monthly maintenance, plus fifty dollars for registration fees and taxes. Now you’re up to more than a thousand dollars a month, not counting what you would have to spend on gas. And that doesn’t cover what you would have to spend on tolls and parking. And what if you have a parking ticket, speeding ticket, accident, or car problem? These expenses hit without warning.

The U.S. Census Bureau reported in 2010-2015 as many as 9.1% of Americans live car free. So if you decide to live in the city without a car, you won’t be alone.

The Case For Public Transit

There are perks to riding the rails or taking the bus. It is better for the environment. You don’t have to pay for gas. Many find taking a bus or train less stressful than navigating traffic everyday. You can even take a nap on the way. People tend to walk a little more when taking public transit than they do driving, which has health benefits. It is safer and greatly reduces chances of being in accidents. 

According to the American Public Transportation Association, households could save as much as $833 a month just by taking public transit instead of driving. Some cities base discounts on frequency of public transit use to incentivize eco-friendly living. How much you could save depends upon where you live though. And while spending more time walking is good for many people’s health, it isn’t an option for everyone due to time constraints.

Before making a decision, run a cost comparison. How much would you spend on a car payment, gas, insurance, parking, and so on? How much is a monthly transit pass? Will you need to hire taxis for destinations transit doesn’t reach? And, of course, don’t forget your time. Depending on your transit system, you may spend hours each week riding slow buses . . . or you may whiz past traffic jams while using the time to read a good book. Time is money—what would you do with extra time every day?

Get Budget Advice

Transportation is a vital part of your budget. When you save money on your commute, you can put it toward your financial goals. A financial advisor can help you estimate how much you could save. We can introduce you to the right professional when you contact us.

Interested in more?

Your financial plan is as unique as you are. We partner with businesses all over the U.S., so that we can help you connect with the right options, all at no cost to you.