“65% of car owners say their vehicle is the most expensive outgoing in their life after rent or their mortgage payments”– Nerdwallet
Many of us own a car without really thinking about the true cost and implications it entails. But will our love for private vehicles ever decline? And what would take its place? Several trends may impact its usage and provide insight into what could be in store.
With more people working from home, less commuting, growing online shopping preferences, changes in attitudes and circumstances of younger generations, ageing populations and the rise in ride-sharing apps and alternative mobility options, is this enough for us to turn our backs on owning a vehicle?
In this article, we look at the shifts that are taking place, what it really costs to run a vehicle, and what this could mean for mobility-as-a-service (MaaS).
Societal and behavioural changes
Covid-19 marked a huge change in the way many of us worked. However, working from home isn’t anything new. It’s a trend that has been growing rapidly in recent years – only the pandemic made it a necessity where possible. Things will likely stay this way post-lockdown for some employees: research by McKinsey & Company suggests that a third of work could be completed remotely post-Covid in Europe.
It meant fewer daily commutes and a sharp rise in online shopping with the realisation that it’s quick, efficient with no drive time or searching for parking. For some of us, we’ve also seen the consequences of what happens to a car when it’s left idle for some time. It might not start because the battery is flat. Other problems include condensation in the fuel tank, seized brakes not to mention flat spots on tyres (source: AA). And electric cars are not immune to similar problems with batteries potentially ageing prematurely (source: Autovolt).
In addition to changes to our working behaviour, there’s also a generational shift. Younger populations are not only dealing with debts from education, but they’re choosing to get married and have children later in life, and perhaps only at this point purchasing a house. They want to pay for experiences rather than goods and they don’t necessarily want to be tied up by owning a vehicle, says Accessibility & MaaS expert Renee Autumn Ray. Pre-Covid there was a definite trend towards younger generations moving against car ownership, however, in the immediate future we might see a rise in numbers given the aftermath of the pandemic (source: EY); whether this is a lasting new trend is yet to be seen.
More people are also placing greater emphasis on their environmental footprint in general and the impact of their travel and transport choices. This is also being driven by governments as they need to reduce CO2 emissions from transport to meet environmental targets.
Ageing populations and lack of inclusivity
Across the globe, we’re seeing ageing populations. The World Health Organisation estimates that the number of people over 60 could almost double from 12% to 22% by 2050. As people grow older, there comes a time when many stop driving, whether it’s because of declining mental and physical health, reduced confidence or other reasons.
With relatives often more geographically dispersed, it means older people may have to rely on public or private transport for health appointments or social events, creating a greater need for mobility alternatives. The same applies if people have physical or psychological conditions, making accessibility a key issue. Often, low-income families also have no option besides public transport.
Cost of car ownership
This leads us on to the running costs of private vehicles and the true cost of ownership (TCO), given it’s the second-highest expense after mortgage payment or rent and can run into a few thousand dollars each year.
There’s the cost of insurance, road tax, breakdown cover and garage costs, such as service and MOT (or similar), along with the repairs that add up over time, particularly as a vehicle gets older.
And that’s not all: on top of this are the more regular things like fuel costs, the upkeep of the car including minor costs such as screen wash, oil, car washing and valeting, as well as charges for road and crossing tolls, congestion charges, and parking.
And of course there’s the price of buying the car. Some people may purchase outright but others need car financing, the repayments eating into a sizable portion of monthly income. Then there are the incidental costs such as theft, damage, and other legal issues such as accidents, speeding fines and even taking driving lessons and passing a driving test in the first place.
We also can’t ignore the fact that private cars spend most of their time idle in a garage, on a driveway or in a parking space, taking up space that could be used for other purposes. Even moving to electric cars means installing electric charging points at home and governments will want to replace revenue from fossil fuels. There’s a cost to everything.
A different approach
This doesn’t signal the death knell of the private car, at least not any time soon, but the number of cars on our roads is unsustainable. Could there be a better way? We think so but it will take a concerted effort from government, business and tech entrepreneurs to persist with new ways of fixing old problems.
In cities, ride-sharing apps, shared private transport, micromobility and public transport, along with cycling and walking have been growing in popularity. Autonomous cars may be some way off, but they will eventually be another part of the mix, providing yet more options.
MaaS apps play an important role in the midst of this, bringing together all the different options to make it easy to plan, manage and pay for journeys along with on-demand route information in as near to real time as possible. The aim is for transport to be more convenient, comfortable, affordable, safe – and inclusive for all.
For some, a car may still be the only option particularly where they live in the countryside, work odd shifts or there are no good transport links. For others, it could mean fewer cars per household or a complete move away from the private car. Either way, with an increase in transport options, disruptive tech and mobility players, along with government commitment, we hope eventually to see fewer vehicles on our roads, creating a more pleasant liveable environment for everyone.