Do Lyft and Uber Offer a Way Out of Car Insurance?

One of the new trends in large metropolitan areas is ridesharing. In fact, ridesharing companies are developing a strong online presence and making more people aware of this convenient new option for transportation that offers an alternative to traditional car ownership. Two of those companies are Lyft and Uber. But do they save people money over owning their own vehicles? One study tries to answer that question.

Costs of Owning a Car

When you consider how much owning a car costs, you must figure in maintenance and car insurance quotes as well as the monthly payments if you are financing. While this is the standard data used to calculate the cost of car ownership, you must bear in mind that your actual costs may be higher than the average. For example, a person with an older vehicle may have repair costs to worry about, so they will spend more on parts and labor than the person with a newer car that only has to pay for regular maintenance.

What Is Rideshare?

Ridesharing allows people to use a car whenever they need to for a set, specific cost. Through the use of a smartphone app that allows you to request a vehicle in just minutes, ridesharing is available in many cities, including:

  • Atlanta
  • Boston
  • Chicago
  • Houston
  • Kansas City
  • Los Angeles
  • New York
  • And many more

More cities are being added all of the time and many startup ridesharing companies are trying to infiltrate this new market.

The Results

A 2014 study conducted by Nerdwallet.com asked participants how much it would cost to use these rideshare services for all trips as well as how many trips could be taken with the money that would have been used on car ownership.

In all of the cities that were studied, it was determined that owning a car was the less expensive option. However, the costs were comparable in some cities. An example given was that the cost of using Lyft in Miami was only about $3,000 more than owning and maintaining your own vehicle full-time.

The study also showed that people could take more rides in a city like Detroit for the same price of car ownership than in New York. When comparing the two companies, Lyft was found to be cheaper in 29 of the cities while Uber had the lower cost in 15 other cities. They actually had the same price in six cities.

Why Would You Choose Rideshare?

Is there a time when choosing a rideshare would make more sense than owning a car? The answer is yes, rideshare does have a time and a place. For instance, if you look for car insurance quotes and find that your premiums are extremely high because of past claims or a DUI, you may be better off using a ridesharing program. If you own an expensive car or generally use public transit or a bike as your primary transportation, it may not be worthwhile to own a vehicle.

On the other hand, if you have a long commute or make a lot of trips, you would be better off owning your own vehicle outright. At least with these new rideshare programs, you now have options.



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