Running a car now costs around five and a half grand a year, according to the RAC. So in theory joining a car club could cut a massive chunk out of your bills – especially for two car households. But will it work for you in practice?
First, let’s be brutally honest about a couple of facts: The car is officially one of the worst investments you will ever make. Brand new, it starts losing value the second you turn the engine on, and the older it gets the more it costs to maintain.
But equally, joining a car club – effectively sharing cars with a group of people – is never, ever going to be as handy as having your own car in the driveway. So it all comes down to cost versus convenience.
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Do you value status or money more?
In a way, choosing between owning a car and joining a club is like flying business class versus cattle. No one flies economy because of the legroom or exquisite chicken dinners.
Some might also feel communal cars a tad tacky, and view them as a step down in status. Well, scooting around in an ageing Fiat Panda/Ford Fiesta probably doesn’t do too much for you in that department either, and you’re paying far more for the privilege. Plus with car clubs you can bore your friends with boasts about how ‘green’ you are.
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The numbers speak for themselves
There’s another benefit to selling your car. You free up some cash that is currently locked away in a rapidly depreciating asset. You could use that cash to pay off debt, salt away in the bank or invest for the long-term, perhaps for your retirement.
Furthermore, the RAC puts the annual cost of running your car at an average of £5,539, or £461 a month. They reached that figure by assuming a car depreciates in value to the tune of £2500 a year, so your figure could be higher or lower than that.
Either way, it’s a hell of a lot of money to be spending if you aren’t getting maximum use out of it. Worse, the cost of running a car rose by over 10% last year alone, so the hole it burns in your pocket could be even bigger this year.
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You could save yourself £1,500 a year
Another study by a national charity promoting responsible car use called CarPlus claims a car club will likely save you around £1,000 and £1,500 a year if you drive less than 6,000 miles in that time.
“Replacing a second family car with car club membership is likely to bring even more cash savings,” the charity added. For a city dweller it seems like a no-brainer to ditch the second car, as you can see from the above you could cut your bills and still have the convenience of owning one car.
Obviously larger families or those in remote areas have a greater need for more cars, but I still find it hard to believe that the quarter of English households that own two cars do so out of necessity.
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Will joining a car club work for you?
Many people still own a car out of a psychological need, or the assumption that every household must have one. But realistically their usefulness is constantly on the wane, especially in London, where unsurprisingly car clubs are proving the most popular.
So could you sell your car and save a bundle without notably impacting daily routine? Factors like how often you use your car, how far you travel, and the public transport network around you will all play a part in whether car clubs could work for you or not.
If you have to use your car to travel to work every day, then obviously car clubs are not going to be for you, as you’ll just end up paying out more for zero benefit. But for everyone else, let’s create a few scenarios to get a rough idea of what it could cost you annually (Check the price of a single journey by using this
car journey cost estimator).
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Here are the costs involved
Prices vary among the big car clubs in London, but you’ll need to put down a deposit of between £100-£150 (which you will get back upon leaving), and some will charge a joining fee, say £25-£40.
Now down to using the car. You’re generally going to pay £5 an hour for use, but you can also book cars for 24-hour periods (around £35 on weekdays, and £55 on weekends) or longer. With these deals, you get the first 30 miles free, after which you are charged around 20p per mile travelled.
So let’s assume you use your car an average of three times a week. Once to take your kid to football (three hours), once to the shops (two hours) and one unexpected trip that always seems to happen when you’ve just made yourself comfortable on the couch (two hours).
Then lets also assume you’ll need a car for 24 hours once a month - on a weekend - for a family outing somewhere 50 miles away. That works out to £35 a week, and one £75 monthly outlay (£55 for the day plus £20 for 100 miles travelled). With four and a half weeks in the average month, that works out to £2,790 a year.
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Does the lack of convenience outweigh the saving?
Obviously the costs will vary widely depending on your lifestyle, but for me that’s not as much of a saving as I would have liked, given how much less convenience you will enjoy.
For example, most car clubs can only realistically offer a 95% guarantee of car availability, and many clubs require cars to be dropped off at the same place every time, forcing you to make round trips.
And if you get stuck in a traffic jam somewhere and overlap into another person’s allotted time, expect to face some hefty fines. At Streetcar, if you run into another members’ allotted time then you will be fined £25, of which £20 goes the inconvenienced member.
“As soon as someone informs us they might be late we will get in touch with the next member to inform them of the situation and to prevent any hanging around wherever possible,” a spokesperson explained.
But car clubs still offer a significant saving nonetheless. If you think it might be for you, obviously it’s advisable to give it a trial run before impulsively flogging your car to the nearest dealer.
Sign up and see how you feel in a month’s time. Not happy? Simply reclaim your deposit, go back to your old routine, and all you are out is a few quid.
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