Never Own A Car: The NYC Competitive Advantage

NoCarLiving in NYC can be expensive if you let it. Food can be expensive. Housing can be expensive. Entertainment can be expensive. So, as people in the city, it’s even more important that we are conscious about our purchasing decisions and buy based on our priorities. However, there is one area where we spend less than everywhere else. It’s our competitive advantage for taking control of our finances in NYC.

We don’t need cars!

It’s an unbelievable advantage and really the only reason many of us can afford to live here. It’s time to look at some numbers and appreciate the advantage we have, while at the same time, understanding that you should NEVER EVER EVER get a car here.

Average Car Cost in The US: $9,000/year

According to a recent AAA study, the cost of car ownership is $9,000 per year – That includes the cost of maintenance, fuel, tires, insurance and depreciation.

What A NYC Resident Might Pay for a Car: $14,350/year (or more!)

Add in a parking spot at a very reasonable $300/month. Insurance rates change depending on what borough you live in, but it will be at least $1,500/year ABOVE the national average. Gas costs almost 50 cents more per gallon, so expect to pay at least $250 more per year on gas. I’m unable to find suitable numbers to compare the price of tires and maintenance, so I’ll stop there, but this number could be even higher!

What We Actually Pay for Transportation: $1,356

That’s right! We win this round! And by a large margin. And just think of people that own multiple cars and buy them on payment plans where they have to pay interest as well. We have it good. Hell, even if you goof up and get a cab a few times a year, you are still coming out ahead of car owners. Using the 173 multiplier, the $637 you are saving each month by being a NYC subway rider instead of a car owner will amount to $110,201 in 10 years if you invest it. Imagine what it will do in 30 years (ok, I’ll tell you – it will be over $865k!)

Amazing right? Make sure to take advantage of this competitive advantage, because there is a flip side. If you do give in to the temptation of owning a car in New York, it can cost you dearly. Due to the increased costs of car ownership here, you would lose out on a potential $187,330 after 10 years of investing and over $1.4 MILLION over the course of 30 years of investing. Wow!

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19 thoughts on “Never Own A Car: The NYC Competitive Advantage

  1. Andrew June 23, 2014 at 12:11 pm

    Great points. I knew someone who paid for a parking spot for $400 in Manhattan and that’s just ridiculous. With the available public transportation and Zipcars, there really is not much of a need for a car. I do have a car though, but I live in an outer-borough. It’s still possible to go without a car, but I work on the Island where public transportation would make my commute too costly.

    • Mr NYBudget June 23, 2014 at 4:49 pm

      That makes sense. There are definitely different situations, especially when you work out on the Island. It’s the one area where I feel lucky to live in Manhattan and not have to worry about that expense.

  2. Shannon June 23, 2014 at 4:42 pm

    Not having a car was my financial windfall when I moved to New York – it saved me over $500 a month on my monthly budget, which made it a lot easier to pay the higher than average New York rent. Not to mention taking away the stress of things like driving in inclement weather, breakdowns, and accidents. I’m so glad not to own a car anymore!
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    • Mr NYBudget June 23, 2014 at 4:48 pm

      Absolutely! Such a headache. I am all on board for the “shared economy” as well. If I ever need a car, I can rent one easily (another post on my strategy for renting cars coming in a future post!)

  3. Aldo @ Million Dollar Ninja June 23, 2014 at 10:13 pm

    I’m with you on this. I live on the other side of the river, NJ, and I never take my car into the City. I just take the Path and walk everywhere or take the Subway. Parking in NY is a pain, if you can find free parking, and garages are expensive. Also the traffic is insane. I really don’t know why people decide to drive there.
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    • Mr NYBudget June 23, 2014 at 11:14 pm

      Absolutely – and yet there are so many cars and so much traffic (and not just cabs and delivery trucks) – it’s really mind boggling to me!

  4. Kassandra June 24, 2014 at 3:31 pm

    My DH saw no need for a car while he lived in Brooklyn. When I moved to NY to join him, we stayed without a car (I left mine back in Mtl) until we decided to move to S.I. The need for a car became greater because my DH often travels to various work sites outside of Manhattan. That said we bought a good used car and paid in cash.
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    • Mr NYBudget June 24, 2014 at 4:18 pm

      Good move – yeah, S.I. actually is a different animal altogether. It’s more like the suburbs in a lot of ways.

  5. DC @ Young Adult Money June 25, 2014 at 12:52 pm

    Yeah NYC is expensive enough without adding a car to your bills. I can’t imagine how difficult it would be driving every day, too. It’s nice that you get the benefit of easy public transit to offset some of the other higher prices.
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    • Mr NYBudget June 25, 2014 at 1:05 pm

      Definitely – and honestly, taking care of a car in NYC is a pain, even before you take cost into consideration.

  6. FI Fighter June 26, 2014 at 3:48 pm

    Not needing a car to get around New York was one of my favorite highlights of my visit! In some places, like LA, it’s nearly impossible to do the same. I guess it makes up for the outrageous rent! Well, at least it helps offset it a little. 🙂
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    • Mr NYBudget June 26, 2014 at 4:52 pm

      Ha – yeah, it doesn’t completely offset it, but public transportation + sharing apartments with roommates + cooking for yourself most meals does a pretty damn good job! Of course, you could get away with the last two anywhere, but I get the feeling that having roommates is much less frequent in smaller, cheaper cities.

  7. Michelle June 26, 2014 at 3:55 pm

    That is definitely a good advantage of NYC. I love St. Louis, but our public transportation system is not the best (it’s not even close to the best haha).

    • Mr NYBudget June 26, 2014 at 4:50 pm

      Yeah, I have only visited St. Louis once, and it was a ton of fun (I love the arch!), but I didn’t see much in the way of public transportation. As much as New Yorkers complain about it, the public transportation here really is phenomenal.

  8. Mel @ brokeGIRLrich June 28, 2014 at 2:29 pm

    I definitely agonized over deciding to keep my insurance on my car at my parents house this year. But I do go home nearly every weekend – if they lived further away, there’d be no chance. I don’t understand why anyone would want the frustration of trying to drive around the city, but less the expense.
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    • Mr NYBudget June 29, 2014 at 11:00 am

      Oh, interesting situation – a car at a parent’s place. In that case, it’s definitely not as bad. You don’t have to deal with having a car in the city.

  9. femmefrugality June 29, 2014 at 12:02 pm

    I’m really jealous of NYCs public transport system! I live on the city of Pittsburgh, and with our jobs and kids, there’s no way we could get by without a car. We are lucky that our rush hour is nothing compared to other metropolises, but still. Would love it if we could get by without one.
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    • Mr NYBudget June 29, 2014 at 9:46 pm

      Man, I can’t even imagine rush hour traffic. The subway does get crowded, but I’m definitely more ok with that. It’s great that Pittsburgh traffic isn’t so bad.

  10. James July 10, 2014 at 7:05 am

    In New York public transport is quite good and there is no need to buy a car. But in other cities it is quite hard to survive without a car where the public transportation is not that good.

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