What goes into the cost of a car
- Depreciation: the value the car loses each year.
- Opportunity cost: what the money tied up in the car would earn if invested.
- Insurance, registration, maintenance, gas and parking.
Example
A $30,000 car driven 1,000 miles a month costs about $1,000 a month in total. 44 rides at $18 cost $792, so ride apps are $208 cheaper. The car only breaks even at about 55 rides a month.
Beyond money
A car gives freedom for road trips, big shopping and odd hours. Ride apps save time looking for parking and need no maintenance.
For a full breakdown of car costs, see the car ownership cost calculator.
Frequently asked questions
Why count opportunity cost?
The $30,000 in the car could earn interest. That lost return is a real cost.
What about a paid-off car?
It still depreciates and still ties up its resale value, so keep those lines.
See also
Results are estimates for information only and are not financial, legal or medical advice. Rates, taxes and fees vary — confirm with a professional or your lender.