I recently bought a slightly used truck from a relative. First time truck owner. Let’s just say that my testosterone is currently in a bull market right now. Pro-tip: In some states, if you purchase a vehicle from a relative you don’t have pay sales tax—which can easily add up to $3-4k.
In the past few years we’ve upgraded from sedans to an SUV and a pickup truck. Upgrading from cars to larger vehicles is the new trend. According to LMC Automotive, which tracks the auto industry, they estimate that by 2022, 84 percent of the vehicles General Motors sells in the U.S. market will be some kind of truck or SUV. Ford’s ratio of domestic SUV and truck sales will hit 90 percent; Fiat Chrysler’s will notch a whopping 97 percent.
These purchases were not cheap, believe me. But, seeing the amount of utility that we’ve gotten out of these larger vehicles has been a game changer. I cannot see myself ever owning anything other than a truck for the rest of my life.
Kevin O’Leary wants you to believe you shouldn’t own a car. I’m not going to say he’s dead wrong—he is—but it’s clearly not as black and white as he would have you believe.
I made a quick flowchart to help you decide if you need a car.
Let’s knock out the easy one first. If you don’t live in a big city or if you live basically anywhere in the Midwest, you pretty much need a car. The public transportation systems are lacking and the availability of ride sharing companies or taxis are minimal or even non-existent. The inconvenience factor alone will force you to own a car.
If you live in a big city with ridiculous traffic and parking and don’t have kids you could probably make a case for not owning a car. The public transit systems are much more evolved in cities. Now imagine trying to get around with kids without a car—absolute nightmare. The government basically dictates now that they have to ride in some form of car seat until they’re 16 years old. Okay, that was a little bit of a stretch but I remember as a kid my mom let us ride in the front all the time. I don’t think we even had car seats.
There are a handful of ride-sharing companies now—mainly Uber and Lyft—that are making it increasingly easier and cheaper to get around and earn fewer DUIs. If you have to hail an Uber with a car seat though it will cost you an extra $10 per ride. Also, parents know how big of a pain in the ass these are to install.
So how many Uber rides would it take to break even versus the yearly cost to own a car?
Well, obviously it depends on many factors such as where you live, how far you need to travel each day, what the traffic situation is, what kind of car you are driving, etc. Kyle Hill actually broke down a pretty detailed calculation here with some basic assumptions and came to the following conclusion: In summary, he notes if you drive less than 9,481 miles per year you could make a case for not needing a car. The average American drives about 13,500 miles each year. But, obviously his analysis doesn’t factor in the convenience angle.
I really don’t think the economics work out for the average middle class American family to use ride-sharing services in lieu of owning a car. It really just depends on how much you drive and how much convenience you would be willing to forego to save a couple hundred dollars a year. At the end of the day, it’s not worth it in my opinion. My pupper and kiddo would agree.
This is post #36. You can follow me on Twitter or Instagram or sign up for my free newsletter here. Also please check out my Amazon page for a full reading list.