Is it time to wave goodbye to your car?
A bicycle, public transport and the occasional renting of a car could save you cash
Back in May, Cliona Brophy wrote in this paper how her family had successfully transitioned from having a car to giving it up in favour of bikes, public transport, and renting a car when needed.
Depending on where you live, or where you have to get to for work, opting to forgo your car may simply not be an option.
For those in urban areas well serviced by public transport, however, her assertion that “instead of being daunted by the prospect of a new year with car loans and associated costs and worries, we are looking forward to a new phase in our lives: car-free and carefree” might hit home.
But does it actually make financial sense to give up your car? And if you’re a two-car family for whom giving up both cars would be too much of a stretch, might it make sense to clear some space on your drive-way and go back to just one car?
Let’s take a look at the pros and cons.
The cost of driving
If your car was registered on or after July 1st, 2008, motor tax is unlikely to be your biggest expense. Depending on C02 emissions, you can expect to pay upwards of €120 for your annual motor tax. If, however, you have an older car, you will likely pay more, with rates starting at €199. For example, a 2010 Nissan Qashqai with a 1.5 litre engine will cost you €280 a year in tax, while an older car with a similar size engine will cost you €514 a year. And remember, it’s typically cheaper to pay your motor tax in full, as paying on a quarterly basis is more expensive – that €514 bill will actually work out as €612 a year if you pay in instalments.
Insurance is another major cost. Keeping with the aforementioned Nissan Qashqai, a 33-year-old driver with a clean driving licence will pay almost €500 a year for comprehensive insurance on this vehicle according to Nononsense.ie. If a couple share the car, they will benefit from a reduced premium.
Depreciation, or the amount your vehicle declines in value, will also hit you. Take a new Land Rover Range Rover Sport, which retails for about €84,000. Carculator.ie puts its annual depreciation at about €16,520 a year. Or how about a 2012 Opel Corsa, which retails new for about €16,500. Carculator.ie estimates its depreciation is of the order of about €1,549 a year.
At first glance, getting your car serviced has become a lot cheaper since the heady days of the boom years.
Servicing Stop offers to collect your car anywhere in the country, service it, and drop it back to you. It’ll cost you from €119 to service a Ford Fiesta, or €152 for a Volkswagen Passat.
However, remember to discuss any additional charges that might apply before you hand over the keys so you are fully aware of what the total bill might come to – and bear in mind that if you need new tyres, it may cost you in excess of €400 for these alone.
Fuel costs continue to rise, with each increase making every journey that little bit more expensive. According to the AA, the average retail price per litre of petrol stood at €1.55 in June 2014, or €1.47 for diesel. Compare this with June 2008, when car owners paid just €1.17 per litre of petrol, or €1.08 for diesel.
Over the course of a year, the AA estimates that if you have a Band B car, petrol will cost you 11.59 cent per kilometre. So, if you do 10,000km a year, this will set you back €1,159.
Parking is a further cost for those preferring to travel on four wheels. The AA estimated last year that you could expect to pay about €4,006 a year, or €77 a week, for the cost of parking your car.
This works out at about €15 per working day, which may be the cost of parking in Dublin’s city centre but is more than most people would expect to pay on a daily basis. If you don’t have free parking at work, you might opt to “park and ride” through a facility such as the Luas, for example. This works out at €3 a day, or €720 a year, based on 48 weeks. Alternatively, you might just pay to park while shopping in your local town, so €250 a year would be more than adequate.
Costs of giving up your car
If you would rather not depend on public transport, or if you live in an area where it isn’t available, getting a bike will keep you connected.
And, thanks to the government’s cycle to work scheme, it has also become more economical. If you qualify for the scheme, you will be able to buy a bike from your pre-tax income.
In effect, this means that if you pay tax at the higher rate, you will make an equivalent saving on the purchase of your bike, which could come in at about 52 per cent, given the universal social charge etc. So, if you opt for a bike costing €600, plus another €100 in accessories such as a helmet and a high-vis vest, the total cost will be €700 – but thanks to the scheme, the net cost to you will be just about €340.
The cost of the bike is deducted each month from your pay-cheque.
If you opt for an electric model, you will be able to cycle greater distances, although you will have to factor in the additional cost of charging it.
Such a bike will set you back upwards of about €1,000, which may push it above eligibility of the aforementioned cycle to work scheme. If you’d rather keep costs right down, you could also opt for a second-hand bike. Donedeal.ie has a wide variety of bikes listed on its site, with plenty of options for less than €300.
And remember, you can only avail of the scheme once every five years.
If you do give up your car, and need to travel longer distances than your bike will carry you – or you have small people needing to be transported to soccer training or piano lessons – it’s likely you will become quite dependent on public transport.
The most efficient way of travelling this way is to buy a pre-paid card. Availing of the Government’s taxsaver scheme, for example, means you will save between 31 per cent to 52 per cent in tax, PRSI and USC by buying your bus pass through your employer from your pre-tax income.
An annual Dublin Bus ticket, for example, will cost you €1,230. Buying it through the taxsaver scheme, however, will cost you just €590.40 if you’re a higher tax payer, or €848.70 for a lower rate payer for the annual card. In Cork, an annual green zone ticket will cost you €1012 or €698.28 through taxsaver if you pay tax at 41 per cent.
For ad hoc journeys, it’s worth looking for a discount card. In Dublin, for example, Leapcard promises a 19 per cent reduction on bus fares, a 20 per cent discount on Luas fares, and fares which are 23 per cent cheaper on Dart and commuter rail. Iarnród Éireann will also introduce Leapcard on its services from August 31st.
Rent a car
Just because you don’t own a car, doesn’t mean you can never have access to one. You may have a friendly neighbour or family member who is willing to allow you use their vehicle on an ad hoc basis, for those trips to Ikea or to locations not serviced by public transport. Or, you can hire a car for those occasions when you just have to have one.
And it doesn’t have to be expensive. You can hire a Ford Ka From Budget, for example, for about €26 a day.
And, to keep costs down, you can buy an annual car hire insurance excess policy from about €49.99 from carhireexcess.ie. This offers cover on the so-called “excess” the car hire company may make you liable in the event of an accident, usually the first €100-€2,000 of total costs, of up to €5,000 annually, and protects against fire, theft and vandalism.
Another option is to sign up for the “Go-car” service, which styles itself as a kind of “Dublin bikes for cars and vans”, although this may depend on where in the country you live, as the car club is currently confined to Dublin, where it operates 50 cars.
It is most suitable for short-term trips as for longer trips you might be better off renting a car. Joining the club costs €50 initially, and you then pay a €5 monthly fee. After that, you pay for each individual trip you make, with a fee of €4.99 an hour for a Hyundai i10 or Ford Fiesta model during peak hours of 8am-8pm, dropping to €2.49 an hour thereafter. You must also pay a fee of €0.45 per kilometre, dropping to €0.35/km for distances of more than 40km, but the fees include all fuel, insurance, road tax and vehicle maintenance. You can also hire a larger car or van, for €5.99 an hour.
Yet another option is to watch out for the introduction of “BlaBlaCar” in Ireland. A kind of “Airbnb” for motor transport, the online ride-sharing service matches drivers with passengers.
So, if you needed to get from Cork to Belfast, for example, you could look for someone driving the same journey and offer them a contribution towards the costs. While there’s nothing new about people sharing a car to cut costs, BlaBlaCar seems to be bringing the same veneer of respectability to car-sharing with strangers, as Airbnb did to flat-sharing with strangers. Failing that, a message on Facebook or a car sharing website such as carsharing.ie, might do the trick.