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What are some alternatives to buying a car?

What are some alternatives to buying a car?

The prospect of driving a new car out of a showroom is exciting, but this excitement is often dampened by the other expenses that come with owning a car. These expenses may include the fees and interest on your car loan (if you have one), registration, fuel, road tolls, insurance, roadside assistance, and servicing.

According to the Australian Automobile Association (AAA), the average amount spent by a metropolitan household on transport is about $17,864 annually and about $14,118 annually if you live regionally. You may want to seriously consider these expenses before making your purchase. It makes sense to explore some alternatives to buying a car.

Ride-sharing, car sharing and car subscription

Ridesharing isn’t a new concept. For years, people have been carpooling to the office or during school drop off. Ridesharing can be a stress-free way to commute. They allow you to utilise your commute time in productive ways such as reading something, replying to emails, or even catching a power nap. You also don’t have to worry about finding a parking spot when you’re sharing the ride. The best part? You don’t need to worry about traffic fines or speeding tickets.

Most rideshare services have an app that you install on your smartphone that you use to book a ride. From inside the app, you enter your location and destination. You’ll get a notification when a driver has accepted your request. You’ll need to link a bank account or a credit card to the app for payment. Once it’s set up, it means you don’t need to pay at the end of your ride because the charges are automatically deducted.

The rise of Uber, Ola, GoCatch, DiDi and other on-demand car ride services in Australia means you should be able to find a suitable rideshare service in your city. It may be a bit harder if you live regionally. There’s also Scooti - a motorbike rideshare service if you don’t mind riding a scooter rather than in a car. Scooti is currently available in Sydney and Melbourne, and you may find this to be cheaper and faster.

If you’re not a fan of ridesharing, a great option might be car sharing. Car sharing works well when you need a car occasionally, such as on a vacation where you need to drive to the destination or need a car when you arrive. For these once-in-a-while situations, renting or sharing a car makes more sense than buying it. You can pick a car that offers the features you need and fits in your budget without going through all the work that ownership entails.

Car sharing services are different from ridesharing and are more like renting a car that you’ll drive. But unlike car rentals, making a reservation, picking up, and returning the car are all done in self-service mode with car sharing. You also don’t need to go to a specific office location as car sharing cars are parked everywhere. This means you can easily book a car even when the company’s offices are closed. You’ll need to be pre-approved and have an account with the car sharing company set up to get a car this way. GoGet, Flexicar, Turo, and Car Next Door are some of the car sharing businessess on offer in Australia.

A car subscription is similar to renting a car, but it’s more like a Netflix or a Spotify subscription. With a car subscription, you make regular payments and get to use the service at any time without additional payments, maintenance, or even insurance. It’s almost like owning a car without actually buying or leasing it. This option also allows you to upgrade or switch cars, depending on the scheme that you’ve chosen. So, if you’re done driving a sedan and have an urge to swap it for an SUV, you can have that option. Additionally, there’s no obligation for you to continue forever; you can typically cancel the subscription at any time. Some of the car subscription services available in Australia are Carbar, Carly, FlexiGo, HelloCars, Loopit, and Motopool. There may be more, as this is not an exhaustive list.

Motorbikes and bicycles

Owning a motorbike is also a good alternative to car ownership.  Bikes are typically more affordable than cars and have the added benefit of being smaller, making them easier to park. If you’re interested in buying a used vehicle, there are online portals to check and buy a motorbike that fits your needs. You still need to get a license for motorbikes, but they can also save you money spent on fuel each year. You may save commute time compared to a car and be able to beat traffic.

If you’re a fitness enthusiast and an environmentalist, then you could choose a bicycle for transportation. There are multiple options available like a pedal cycle, tricycles, and power-assisted cycles or e-bikes.

Public Transport

One of the best alternatives to car ownership is public transport that comes with zero cost of ownership. You can save substantially, and there’s no question of any maintenance. Australia has a robust public transport network in metro areas but less so if you live in a regional area. You can often buy a monthly or weekly pass if you commute regularly. These passes can help you save even more.

Some of the public transport options in Australia are commuter rail, trams and light rail, buses, and ferries in some parts.

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This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.



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