The Frugal Canadian

A frugal spender seeks to find new ways to save money and increase her net worth.

Tuesday, October 17, 2006

Zipcar and AutoSharing

Every where I seem to go in Toronto, I’m seeing signs for Zipcar, an auto-sharing plan. I was curious to see what a casual driver such as myself what pay a year to Zipcar rather than own a car.

For an occasional driver, its $11/hour which includes gas, insurance and 150km/day. There’s a $30 application fee and if you want no minimum driving commitment there’s a $55 annual fee. Additional km are $0.25/km

Based on my driving patterns, I estimated I use my car 4 hours a week. This would let me drive to my weekly Rec sports game, allow for grocery shopping and another errand.

This would mean: $2,288/year plus $30 application fee plus $55 annual fee or $2,373

In addition, I might drive out of town on average one weekend a month, which would mean $70/day(the daily cap) X 2 days = $140 X 12 = $1680, giving me 300km for the weekend.

So on the year, I would spend $4,053 in Zipcar fees. I’d also have the ability to sublet my parking space which is included in my rent, giving me a savings of $80/month or $960 on the year. This leaves a one year net cost of $3,093 to use a Zipcar

Let’s compare that to my current car expenses:

Car Insurance $1200 annually plus car maintenance & gas of $75/month(actual run-rate) gives me a cost of $2,100 per year.

Also, my car cost approximately $25,000 brand new, let’s say it lasts me 10 years= $2,500/year

Actual net car costs on the year are therefore: $4,600

From this it looks like the Zipcar would save me $1500/year. My car is fully paid for and although I could probably sell it for $8,000, I don’t think I’m entirely convinced on switching to Zipcars. I think my car still has 5 years left on its life, so if I were to sell I’d get about $1600/year - the entire savings from using the Zipcar at $1500/year. For now I’ll stick with my existing car, but I think it’s could be a wise choice for those that currently don’t own a car and are casual drivers.

Autoshare is another service provider. The simple plan is $9.50/hour plus a $25 annual fee. But the upfront costs seem a little steep. There's a $25 application fee, a $100 joining fee plus a $250 deposit. Presumably if you really like the service, the $250 is a sunk cost.

Has anyone used either of these services? I'm curious whether users are content with the companies.

10 Comments:

At 2:02 PM, Anonymous Anonymous said...

Hi!

I never used Zipcar, but why paying $70/weekend day, when the a normal rate for rent-a-car companies is no more than $50? In Toronto, I usually get cars for up to $30/weekend day, and that includes taxes. It's true this doesn't include gas and insurance, but on the other side they generally include at least 1000km/day (it's 125km/day for Zipcar). I also use my Visa Gold for the insurance, so that's not an issue.

I agree that it's great to rent cars by hour, but instead of renting at zipcar for 3-4 hours, I can rent a car for a full day, and use it without being worried about the return time.

The main issue when renting a car is the location. If you have to ride the bus for an hour to get to the car, you may think twice :-)))

I'm not in the renting cars business, so don't get me wrong, but I really don't see why one should use Zipcar and pay their high prices.

I also agree that there is some convenience in it, since you don't have to wait for any paperwork. Also, if you live near a Zipcar parking location, it could make sense to use it even at their hourly rates.

Regards,
Vasile B

 
At 8:43 PM, Anonymous Anonymous said...

According to your fuel costs, and that you drive a car, you are likely buying about 80 - 85 litres / month of gas. If your car gets mileage as poor as 10 l/100km, then you should be driving some 800+ km per month. Based on your guesstimate of time spend driving, your average speed is about 50km/h, i.e. little out of town driving. I think you'd probably find there are a lot more trips that you actually make, than you calculated in your assessment of the Zipcar.
The lack of convenience might also cause you to give a miss on some of the trips you currently make, which may be good, or bad, depending. The Zipcar might make more sense if you were looking at the purchase of a replacement car......

DAvid

 
At 12:19 PM, Blogger Paige said...

Torontoist did a really good comprehensive post comparing both..

http://www.torontoist.com/archives/2006/09/the_car_sharing.php

That might help.

But if you're only saving like, $400 a year, consider the cost of convenience. No commuting or prepping to get your car.. makes sense. I think car sharing is more for those who don't have cars, not those who want to get rid of them..!

 
At 10:27 AM, Anonymous Anonymous said...

disagree with all the above posters. For a savings of $400 I could do without convenience.

Think about it $400 saved a year for 10 years is $4000 and if you factor in that you invest it with an annual return of 10%, after 10 years you will have made over double the initial $4000. So approximately you will have $8000

Overall you have a savings of about $800. I'm not rich like Larry Elison so I don't mind saving money whenever I can.

 
At 4:27 PM, Anonymous Monty Loree said...

I used to live in Toronto many years ago. I took the bus most of the time.

Now I live in small town Saskatchewan where it's only a 3 minute drive to work.

Sometimes I forget how big Toronto is.

 
At 4:50 PM, Blogger saulcolt said...

Hi Everyone!

I think Zipcar is the greatest thing since the invention of fire!

In fact since I work for them I will make you guys an amazing offer. Anyone who joins and says they saw this blog post will get $100 of free driving!

Saul Colt
Marketing Guy
Zipcar Toronto

 
At 12:01 PM, Anonymous Anonymous said...

havent used their service yet signed up for a membership recently and already got shitty customer service. i know i ve been working customer service for years .

putrid..

 
At 11:17 PM, Anonymous Anonymous said...

just a tought...
if you find yourself without car at some point, why not combine zipcar and renting.
for small errands that don't take that long, but that you just have to do (like big shopping, that's done about once or twice a month, or smaller weekly ones - depends on your habbits) you can use zipcar. the lowest plan of $50 can give you almost 8 hours of driving a month (if you don't mind the small cars that go for cheapest) and that should really cover it. if you plan well you can keep your expenses really low. good thing about it that you can also put somebody from your family on your plan (they'll have to pay that $30 application fee) but that's if you can trust them. so one of you will go shopping and it will always be used.
and then for weekend trips or all day events, you might want to consider some good rental place. i heard there's some really affordable ones out there.

 
At 7:08 PM, Blogger Daij said...

I'm trying to justify the alternative of Zipcar myself. I live in the states. Luckily, it's 2 blocks from my job, so if I reserve one this afternoon, I'm only 2 blocks away. But, when I return it, I have to walk about 2 miles home, which will suck.

Also, 2 weeks ago I reserved one for 1.5 hours at a cost about $14 and change. I was running late, and returned it 5 minutes late. My cell phone needed to be charged so I couldn't call to say I would be late, and I was charged and extra $55, which of course, upset me. Right across the street from my job is an Enterprise Rent-acar. For 2 days I could get a car for $15/day, totalling $30 (I have full liability insurance, so there were no extra costs) for the entire weekend, over the $69 zipcar charged me for the 97 minutes. The choice is very obvious

 
At 10:18 AM, Anonymous Anonymous said...

We have found we had huge savings using car sharing and wouldn't use anything else. In Kitchener, we also used Grand River Car Share which was great.

 

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