ZipCar vs. Owning: The Economics of Car Sharing vs. Owning

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Zipcar is a service where you can pay one hourly or daily rate for usage of a vehicle. With Zipcar you get access to cars without all the hassles that come with the ownership. Is Zipcar for you? Zipcar can be used when you need a spare vehicle or as a p

Introduction to an Alternative to Vehicle Ownership

We have been depending on them for over a decade. We personalize them. Some of us even give them names. But sometimes “Betsy” can be rather costly.  Innovations have created alternatives to car ownership. Those who reside in metropolitan have the option of car sharing and the trend is spreading rapidly.  Zipcar is a service where you can pay one hourly or daily rate for usage of a vehicle. With Zipcar you get access to cars without all the hassles that come with the ownership. Is Zipcar for you? Let’s compare both. Below is an overview of the benefits and downfalls of the traditional transportation concept of purchasing/owning a personal vehicle.

Benefits of Ownership 

  • With car ownership you can get the car that suits you. You can personalize it to match your style and day to day needs. You can leave the car seats in it, install TV’s and you don’t have to constantly readjust your seat.
  • When you own your own car you can come and go as you like. You get to be spontaneous. You don’t have to make a reservation or worry about availability.
  • Buying a car is an investment. You are gaining personal collateral and credit through purchasing a car. This is one of the stepping stones to building credit enough to purchase a home.

Downfalls of Vehicle Ownership

You have the responsibilities of basic maintenance. These costs are things like oil change, brakes, tune-up, tires, and tire rotation. Oil changes should be done every 3,000 miles.  Oil changes normally cost $25 to $35.  A basic tune-up starts at a little over $200. These costs can add up quickly.

If you own a car at some point in time you will have to pay for repairs. Repairs can range from starter or alternator replacement to reconditioning and repair of cylinder heads. Small to major auto repairs can cost anywhere from $100 to $1500. 

There are many expenses that go along with owning a car such as insurance gas and car payment. If you are purchasing a car most lienholders require that you maintain comprehensive coverage insurance.  Depending on your driving record, as well as the car you purchase, this could be rather costly.

For those who purchase new car, depreciation is a key element to consider. A new car typically loses value as soon as it is taken off the lot. Just think about how much you will invest versus how much you will sell if for later.

Now we have looked over all the positives and negatives of vehicle ownership. Let me introduce you to the alternative.

Meet Zipcar - The Leading Car Sharing Company

Founders Antje Danielson and Robin chase started Zipcar in 2000. Today the Chairman and Chief Executive Officer is Scott Griffith and Zipcar has over 750,000 members.  Zipcar offers different packages and rates vary depending on the city you reside in.

Zipcar offers two basic packages:

  • The occasional driving package                                      
    • Annual fee ($50.00 & up)
    • Application fee ($25.00)
    • No monthly commitment fee
    • Hourly rates from($8.00 & up)
    • Daily rates (69.00 &up)
    • No driving discount
    • Gas included
    • Insurance included
    • 180 free miles included
  • The extra value plan
    • Annual fee ($0 & up)
    • Application ($25.00 & up)
    • Monthly commitment ($50 & up)
    • Hourly rates ($7.00 & up)
    • Daily rates ($69.00 & up)
    • Gas included
    • Insurance included
    • 180 free included
    • Lower rates are available

Benefits of Zipcar

  • Zipcars can be reserved over the phone or on the Internet anytime. You can get one right way or even reserve one a year before you need it.
  • Always drive a well maintained, late model vehicle. You can choose what you drive.  Zipcar offers a variety of vehicles from a Minicooper to a BMW.
  • Gas is included. You are required to make sure the vehicle is at ¼ of a tank when you return it.
  • Insurance is included. All Zipcars include a comprehensive coverage.
  • Use up to 180 miles for no additional charge per use.
  • When you sign up for Zipcar you get a "Zipcard" that unlocks your car with the key in it. There is also apps available on the leading cellphones to help you locate your vehicle.
  • Zipcar is beneficial to the environment. Car sharing reduces the need for mass manufacturing and parking spaces. Those who are paying hourly for a vehicle are less likely to use it frugally.


Zipcar is a way to get a car when you need it without all the hassles and expenses of owning a vehicle.You can use Zipcar to go on your family vacation or maybe just when you need a spare car. Zipcar is not suited well for those who have long daily commutes. Owning a vehicle is the best option for those who are very dependent having immediate transportation on a daily basis.

The easiest way to decide if Zipcar could save you money is compare by adding up all the hours/days that you use your car weekly and multiply that by four (weeks in a month). Go to the Zipcar website and look up the rates in your area. Calculate how much those trips would cost you in a month. If that amount equals less than your monthly travel expenses (car payment +insurance+ gas) then try out and see if Zipcar is right for you.

Here is an example comparison:

Chris lives in Atlanta. He carpools with some friends to work. They use his car for the carpool on Fridays.  He drives out of town every Sunday to visit his mother. The drive is approximately 2 hours. He goes grocery shopping weekly. It usually takes him about 2 hours. He also has a cooking class on Thursdays that lasts 2 hours.

The rates in Atlanta are $69 a day and $8 per hour. If Chris chose to use the occasional driving plan from Zipcar  he would pay $69  on Sunday and Fridays. He would pay for an additional 4 hours (4x8=32) for transportation for shopping and cooking classes.His total transportation cost weekly is $170 (138+32) a week or $680  a month.

He has a car payment for a 2007 Honda Accord for the amount  $478 monthly. His insurance is $200 a month. He lives in the metropolitan area and puts in about $50 in gas weekly and pays $10 a week for parking.

His monthly travel expenses totals $918.


His total monthly savings would be $238.

If you don’t feel like doing the math yourself just go to Zipcar’s savings  calculator.


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