Living in a rural area and not owning a car sounds impossible – living in an urban area and not owning a car sounds sensible. You know what we mean if you’ve ever tried to park in a busy neighborhood or had your car broken into. Urban car ownership can be a huge hassle and expense. But what about those occasions when you want to buy in bulk, like that annual trip to Costco, or when you want to get out of town where no bus or train will take you? The answer: rent a car and/or join a car share company.
Each of these has its’ merits and actually saves you lots of money compared to owning, maintaining, parking and insuring your own vehicle.
Consider Manhattan; where, according to Wikipedia, 75% of the people do not own a car. If you are one of those people, here are some options and tips to consider when you get the itch or need to take the wheel.
Renting a car seems like a pretty straight forward event: You probably chose a rental company based things such as the best rates, availability and convenience of their location. Actually there are a few other decisions to make and we don’t mean the choice of an economy, compact, mid-sized or luxury car. Another important choice you need to make is with the insurance these companies offer, which you can accept or refuse.
Keep in mind that before you rent a car, it’s a good idea to call your credit card company to see if they provide any level of insurance coverage on car rentals if you pay for the rental using their card. Some credit card companies will provide collision coverage if you use their card.
Another avenue is your own car insurance. If you don’t own a car then obviously you won’t have car insurance, but if you do, check to see what sort of coverage your insurance company provides on rentals.
If you don’t currently own a car but plan to rent with frequency, you have another option that is worth considering, buying a non-owner auto liability insurance policy from an insurance company. These policies cost around $300 per year and typically provide coverage for damage you may cause to some else’s car and liability for injuries to its occupants, or to pedestrian, in the event of an accident. A non-owner auto liability policy will also provide medical payment coverage for you and your passengers, and uninsured and under-insured coverage.
However, what it does not offer is collision coverage which you will need in case you damage the rental car. If you choose to buy this type of policy make sure you understand what it covers. If you need more coverage, find out about adding an umbrella policy to the non-owner auto liability policy.
If you only rent a car occasionally, then it may make more sense to buy the daily coverage offered at the car rental counter, which is your other choice. Here are the types of coverage they provide:
Collision Damage Waiver – This coverage usually costs between $10 and $20 per day and will relieve you of any financial responsibility in the event that the rental car is stolen or damaged.
Liability Insurance – This coverage usually costs between $10 and $15 per day and provides excess liability coverage of up to $1 million for the time you rent a car.
Personal Accident Insurance – This coverage usually costs between $1 and $5 per day and covers you and your passengers for medical/ambulance bills. If you carry adequate health insurance it may not be necessary to purchase additional coverage from the rental company.
Personal Effects Coverage – This coverage usually costs between $1 and $4 per day and protects you against theft of personal items in your car. You may not need this if you have homeowners or rental insurance.
Car Share Programs
These programs along with their brightly colored fleet of vehicles are popping up in most major metropolitan areas. Why pay for a car that sits parked all week if you only need one occasionally? The membership fees for most car share programs cover the costs of the car, insurance, gas and all maintenance. After that members may be charged an hourly fee and pay a small fee for mileage. The advantage to these programs is that a driver doesn’t have the responsibility of owning a car, and doesn’t have to worry about parking, insurance, repairs or maintenance, the latter of which is especially annoying if you’ve ever owned an older car.
There are also environmental benefits to these programs especially because sharing a car reduces the amount of vehicles on the road. In traffic-jammed cities like San Francisco, taking cars off the road to reduce congestion and greenhouse-causing-gases just makes sense.
In areas where people are accustomed to driving everywhere but are considering the switch to a car sharing program, it is a good idea to first review: how many miles you’re driving in a month, how often, and to see which trips were necessary and which one’s weren’t. For those who are very dependent upon their car, these programs might not be a fit. For those who already use public transportation or drive minimally, these programs are a fit. For those who don’t own a car, car share programs give you the wheels when you want and need them!