Public Transportation Saves Money for Many: Don't Get Left Behind

Jennifer A. Digiovanni, January 2017

Maintaining a car or truck is a large expense that you might have grown accustomed to thinking of as a necessity in your life. But as more environmentally friendly alternatives are offered, you may realize you no longer need to set aside money for a car payment and other expenses like gas, insurance and parking fees. Public transportation saves money for many families. Here's why.

The Average Cost of Car Ownership

Adding up the cost of car ownership can show you how much of your budget goes toward traveling around town. To give you an idea of average car-related expenses, AAA reports that the annual cost of owning and operating a vehicle is $8,558. Expenses included in this total include amounts for gas ($1,267), insurance ($1,222) and maintenance ($792). Finance charges, depreciation, license and registration fees, taxes and the cost of tires are also included in the annual cost. With the average monthly car payment for a new vehicle now more than $500, according to Experian, you may also need to set aside money each year to buy your car. Then there's the actual cost of driving, like time lost sitting in traffic, which the Texas AM Transportation Institute reports costs $960 per commuter. Time really is money.

Public Transportation Can Save Money

A well-developed public transportation system alleviates the need for car ownership in large cities. The term public transit encompasses a variety of transportation methods, including buses, trains and subways. Public transportation can save you money, but it often requires committing to certain changes in your lifestyle. You may find a reliable service to take you to and from work, but may also need to walk or bike to attend to daily errands without a car. Monthly transit passes are often the best deal and run much lower in price than car ownership expenses. For example, the cost of a subway pass in Boston is $84.50. In Philadelphia, a monthly transit pass is $109. In addition to public transportation, communities are also encouraging walkers and bikers by adding trails, bike lanes, bike share programs and other safe spaces for nonautomotive travel. Options are becoming readily available for those who wish to reduce their reliance on automobiles.

The Popularity of Car Sharing

In addition to increasing reliance on public transit, another way to decrease car expenses is to consider car sharing. Just eliminating one of two cars in a two-person household can result in sizable savings of more than $10,000 per year, according to the American Public Transportation Association. With companies like Uber and Lyft, it's now easier than ever to get places without a car. You may also want to consider car-sharing services like Zipcar, which give you access to a car when you need it. The Transportation Sustainability Research Center reports that car-sharing users experience monthly savings of $154-$435 and are likely to also use public transportation.

Shifting away from car ownership saves money and also helps you engage in an environmentally friendly lifestyle. If you'd like to decrease your reliance on automobiles, take the time to plan out your work commute first, as you'll need to travel this route daily. A combination of biking, walking, public transportation and car sharing can help you get where you need to go for less money.

Content provided for informational and educational purposes only and is in no way to be construed as financial, investment, or legal advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal financial issues.

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