How to Save Big Bucks by Being a One-Car Household

A woman closes the trunk of her car while holding hands with her daughter and talking to her mother.
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Have you ever considered being a one-car family? If you are single, have you ever thought about living without a car of your own?

Certainly, there was a time when neither of those scenarios would have been considered feasible, reasonable or popular. Owning a car was our birthright and what so many of us worked toward after getting a driver’s license as a teenager. A car is often the first big-ticket item we own — or go into debt for.

But owning a car is expensive, and getting more so. There is the price of gas, the cost of insurance and constant concern about maintenance. When you own a car you pay licensing fees plus parking costs either at your workplace or for parking when you go out to eat or attend a sporting event.

During the early stages of the pandemic when so many people stayed home, the roads were empty. No one went anywhere, so no one had to drive anywhere. News stories abounded about the improved environmental conditions of the world at the time.

But, now we are crawling back to a normal life. Does a normal life necessarily mean you need to have a second car at your disposal at all times?

4 Factors to Consider to Become a One-Car Household

Here are some considerations that make it possible to be a one-car family, and reasons why you might want to consider it. Use this list to assess your family’s situation.

1. Number of Drivers

This may be the No. 1 consideration. A home with two adult drivers is likely the best scenario for going to one car. It will be easier to sync schedules. More than two, and you will need increased  patience and cooperation.

For example, if you live in a household with two adults and two driving teenagers, one car would be a nightmare unless you live in a city with excellent public transportation. That being said, working together and keeping track of schedules could allow you to go from three to two cars.

2. Driving to Work and School

If everyone in the household has a job or school that requires them to leave the house, and the locations are far enough away that walking or public transportation is not an option, then perhaps you need to be a two-car family.

But if one or more family members are working from home or studying solely online, the number of cars needed can become a topic of discussion. You might be able to become a one-car family.

3. Location of Key Services

Other than going to work, where do you absolutely need to go on a regular basis? The grocery store, naturally. Is there anywhere else that you must go to on a daily or weekly basis? Are any of those places within walking distance? Think about the possibility of the person working from home driving you to an appointment on a lunch break.

Check to see how much a round-trip Uber or Lyft ride would be from the places you regularly visit. Perhaps that will be a better deal than the prorated price of gas, insurance and maintenance. Keep in mind, though, that rideshare rates, like everything else, have gone up in recent months.

4. Occasions When Two Cars Are in Use

On a regular basis, how much time is spent when both members of your household are using a car? Or, looked at from the opposite direction, how much time is spent in a normal week with at least one car in the driveway, not being used?

The Price of Owning a Car

It’s more expensive today than ever to own a car, for a variety of reasons. The pandemic has pushed the average price of a new car to about $40,000. The price of used cars has gone up by 40%. And that’s just the start of the expenses.

The price of owning a car could be one reason that you are thinking about getting rid of one. Or the temptation of making some money on the used car market could also help make a decision.

The following chart includes 2021 information from move.org about how much it cost a year to own a car. The average across the country is $5,265 for payments, fees, gas and maintenance. These are the costs in the top five and bottom five states.

Annual Cost of Car Ownership at a Glance

State Cost
Michigan $9,304.28
Florida $6,765.22
Texas $6,670.51
Delaware $6,404.80
Minnesota $6,317.65
Massachusetts $4,480.48
Kansas $4,531.79
Alabama $4,610.43
Tennessee $4,639.37
Vermont $4,642.13

Car Payment

Are you paying off a car loan on one or both of your vehicles? Each one is likely costing you a monthly payment somewhere around $500 if the cars are new, and one of the car loans may be costing you more than the other. Selling one of those cars is a quick way to save money.

Gas Prices

The price of gasoline is at an all-time high in the spring of 2022. In early April, the U.S. government decided to release millions of gallons of gas from the federal oil stockpile to relieve gas prices, but that is not a behavior that is long-lasting. Ask yourself:

  • What is your gasoline budget per week?
  • How often do you fill up?
  • Would you save money if you only had to worry about filling up one car per week?

Insurance

Depending on your age and driving history, automobile insurance is one of the more expensive necessities in your budget. Americans pay an average of $1,655 annually for full automobile coverage, averaging a monthly payment of $138. While the average price per car drops when you insure multiple cars, it is still more expensive to insure two cars than it is to insure one.

Check out The Penny Hoarder’s Ultimate Guide to the best car insurance companies for 2022. 

Maintenance

Regular maintenance means oil changes and tire replacement, mostly. Wiper blades and brakes are also regular expenses. AAA says the average annual cost of regular maintenance on a vehicle is $792, depending on how much you drive.  That does not take into consideration any major repairs needed on older cars that have outlived their warranty.

Licensing

For many states, license plate renewals are an easy way to raise revenue, and raising the rate for renewal is an easy way to increase revenue. Oregon has the highest car registration fees, between $268 and up to $637 for new cars. Florida follows with a new registration fee of $225. Registration fees are just a fraction of this in Arizona.

Should you move? Check out the state-by-state registration fees for cars.  

Renewal rates range depending on the state you live in, but states are also charging higher license plate charges for electric or hybrid cars than for gasoline-powered ones. Many communities in America also charge a fee for an annual vehicle sticker to residents, a charge that can reach $100 in some communities.

Parking

If you own or rent a single-family home, you don’t pay to park your car. But if you live in a situation where you are paying for the use of a garage, that is another cost consideration. Then, when you leave home in your own car, you may be going somewhere that requires you to pay for parking.

Toll Fees

These days you are almost forced to have an automatic payment device attached to your windshield if you live in a state that has toll roads and bridges. There is usually a one-time fee for purchase of the device and then you have to make automatic payments to refill that account balance. How often you have to pay to use the roads increases your costs of driving.

Two women laugh in the backseat of a vehicle.
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The Price of Ride Shares and Car Rentals

The cost of ride shares with Uber or Lyft are dependent upon where you live and how far you want to travel. When determining whether you can live without that extra vehicle, you need to figure out how often you would be calling for a car to pick you up, and how far you anticipate traveling.

That being said, you would need to take a lot of rides to equal the annual cost of owning that extra car.

Depending on where you live, you can also consider renting a car for longer trips. According to Kayak, the average cost of a rental car per day jumped to $81 as of December 2021. What is your daily average expense for the extra vehicle you have? How often are you likely to need to rent a car?

The Price of Delivery Services

An entirely new topic in the issue of automobile ownership is the availability, cost and flexibility offered by delivery services, especially groceries.

How many times do you use that second car to pick up something that you could have delivered? Yes, delivery costs money but if it’s nominal it might play into your ability to go down to one car.

Are you using the right delivery service? Our assessment of the eight best grocery delivery services for 2022 can help you decide.

The Availability of Public Transportation

Whether it is a bus or a train, public transportation is likely to go to or near to where you need to go on a regular basis.

The U.S. Census Bureau reports that most public transportation commuters travel by bus, followed by subway or elevated rail, train or commuter rail, then streetcar (where available).

For some people, especially those in suburban locations traveling to other suburban locations, the only true public transportation available is a bus, which is inconvenient because of spread-out bus stop locations and schedules.

The Value and Price of Convenience

The Irish writer and poet Oscar Wilde told us that “a cynic is someone who knows the price of everything and the value of nothing.”  We have looked at the price of owning a car vs. depending on ride shares and public transportation. Now, let’s talk about the perceived value of those options.

Do you like having a car sitting in your driveway or in your designated parking spot, ready to take you wherever you need to go whenever you need to go? Now think about how much you pay for that convenience. Is it worth it?

Cars have an environmental impact and while it’s true that one less car on the road will not have a great impact, it might have an impact on how you feel about yourself. Perhaps you want to eliminate one car as your contribution to the environment.

There certainly is a psychological price to pay if you give up that second vehicle. There is a perceived lack of freedom. But, if you are environmentally concerned, there is also a psychological price of being a two-car family when only one vehicle would suffice.

The Possibility of Sharing a Car

There is another consideration. Hopefully, you paid attention in grade school when you were taught about sharing.

In order to make a vehicle downsize work, you need to create a schedule of regular driving trips. The needs of both drivers should be considered. Is the car going to belong to one person and be borrowed by the other? A definite discussion of the ownership and use of that one vehicle needs to occur before you become a one-car family.

You might have to log in doctor and hair appointments, plus work obligations, into a shared calendar on your smartphones through Google calendar or another app. Or maybe you’ll use an old-school paper calendar hung on the fridge with a magnet. Either way, having one car will force you to get organized.

Frequently Asked Questions (FAQs) About Going to One Car

We’ve collected the answers to some of the most common questions about down-sizing your family’s number of cars.

Is It Possible to be a One-Car Family?

It is, depending on the size of your family. But it requires scheduling, sharing, the willingness to use public transportation or ride-sharing services, and the willingness to walk when possible. If you cannot employ any of those tactics, it is going to be difficult. The more urban your living situation, the easier it is going to be to be a one-car household because of the availability of public transportation.

Is It Expensive to Own Two Cars?

It certainly is more expensive than owning one. You must insure both cars (although most insurers offer multiple-car discounts), you must maintain them both, and you must license them both. If you are paying off car loans on both cars, that is obviously a double expense. However, If you only use one car at a time, expenses like gas, parking and road toll costs do not double. 

How Much Insurance Can You Save If You Only Have One Car?

While most insurers offer multiple-car discounts so that the average cost per car is lower, you are still going to pay more to insure two cars than you pay to insure one. It will not be double and, as always, the rates depend on year and make of car, its usage and your location. Cars used in large metro areas are often higher to insure than cars driven in small towns.

Does Having Two Car Loans affect Your Credit Score?

It may cause your score to drop temporarily because applying for a second loan will trigger a hard credit check. Having two car loans impacts your debt-to-income ratio, which is a factor in determining your credit score.

Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.