Is ZipCar Worth It?

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ZipCarIf I lived in a city with decent transportation options, I probably wouldn’t own a car. If I lived in a city with decent transportation and ZipCar, I definitely wouldn’t own a car. As it stands, we live in the suburbs so a car is a must but I am a little jealous of my friends who don’t have to take care of a 4,000 pound piece of metal on wheels. It also appears like I’m not alone. This article about the cheapest generation, a somewhat unfair characterization, mentions how Millenials aren’t buying cars and houses like their predecessors. It made me wonder about the economics of Zipcar and whether it makes sense financially, even if it’s not practical in our situation.

ZipCar is a service where you can rent cars for a very short period of time. You join their service, which involves a driving record check and a 94% approval in 24 hours, and are issued a card. You use that card to reserve cars that are (hopefully) distributed around your local area. You rent by the hour or by the day and can do so entirely online, which tells you whether there are cars there. It’s basically a la carte car rental. The technology is actually pretty slick, you do everything with the Zipcard.

ZipCar is very well represented in cities but you’d be hard pressed to find them out in the suburbs, though there are locations. For example, there are no Zipcars in Columbia, MD where I live and the closest one is at the University of Maryland, Baltimore County (next closest is in Baltimore or Washington D.C.). That’s not a viable option for me and it’s likely the case for folks living in the suburbs. If you live in a city, chances are you’ll see one nearby.

So would it make sense financially?

Is a ZipCar Worth It?

The simplest way to do a comparison is to compare the costs of owning a car versus the costs of simply renting it as needed. For our math, we’re going to take a look at “Magdalen,” a Mazda 3 that is sitting in a garage somewhere in Baltimore. What if you owned Magdalen?

Here is an estimate of the fixed costs:

  • Parking – $150/mo
  • Maintenance (from – $100 (7500 mi. service)
  • Insurance – $600 (estimate)

Insurance and parking are the two biggest costs and maintenance isn’t really an issue until a car gets much older, but the $208 monthly cost of maintaining a car is equal to about three days of rental $68 per day. Depending on how much you’d pay for insurance in a given year, a ZipCar may be a good option if you anticipate needing for fewer than 3 days a year. There’s also an hourly option, at a price of $8.50 an hour. That’s about 24 hours of rental time for your $208 a month.

That’s only the straight up numbers on the bare minimum you’d be spending. You won’t need to wash the car, vacuum the car, or do any of the other small maintenance items that you’d do if you owned the car. No need to replace windshield wipers, fill up the oil, fill up the washer fluid, etc. Those are minor costs, where your time is likely more valuable than the price of the items, but those can be avoided entirely.

Lastly, I’ve heard of many people who replace a second car with ZipCar. You keep one vehicle so you have one on hand no matter what but you drop the second one and rely on ZipCar in case of emergencies.

Have you used a ZipCar? Are you one of the many who dropped a second car in favor of this on-demand capability?

(Photo: rj_schmidt)

{ 13 comments, please add your thoughts now! }

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13 Responses to “Is ZipCar Worth It?”

  1. NateUVM says:

    A couple of year ago, we looked long and hard at ZipCar, and nearly decided to go with it. It is, after all, a fantastic idea.

    What hung us up is insurance. Just be sure that if you do/have sign/-ed up with ZipCar, that you understand what level of insurance is really being provided. While advertising and, technically, having all the insurance required by law, the actual level provided was WELL below what either my wife or I was going to be comfortable with.

    Just be an informed consumer.

    (Also, this was 4+ years ago. So, certainly, things may have changed.)

    • njblue82 says:

      This post was timely for me as I was just yesterday visiting my brother-in-law in NYC and asked him whether he’s used ZC (he had not).

      I agree with Nate’s concern about insurance and if someone has info, that would be great. It’s not of course, just the cost of insuring the little ZipCar but also insuring the medical costs of all injured parties. When I rent from Hertz or Avis, my credit card covers the deductible and then my good State Farm insurance kicks in – does ZC offer this option?

      How much does it cost for a car-less person, like my brother-in-law, to get excellent, State Farm-like insurance for a short term ZC rental? Thanks.

  2. Texas Wahoo says:

    I think it is highly dependent on your use. We live in Virginia, but near a Metro and close to a couple of Zip car spots. We own two cars, mainly because my wife’s family gave us their old van when they left the country. We generally only drive on weekends, but our vehicles cost us very little (basically about $50/month for both). I think its well worth it to us to have the convenience of not having to reserve a car or hope one is available.

    I think one issue with Zip car is that they are often taken. There are two spots at the local grocery store. I know that they are almost always empty because I used to always think I found a spot until I saw the Zip car sign.

  3. Michele says:

    If I lived in NYC, it is a definite(!) option, parking costs would be way over your est.150 per month and the garage is not close to where you live. Then lets not forget opposite side of the street parking if you don’t pay for garage parking (don’t mention the headache of street parallel parking too). Then the monthly charges if your car is not paid off.

    A zip car is not something I would use all the time because you have great public transportation in NYC, but when I want to take a weekend trip and they are located in your area? Fantastic!

    I live in AZ now. Open dead land and not enough viable public transportation. Makes me miss NY…at times.

  4. Tony says:

    If you’re going to write an article discussing if ZipCar is worth the money, you might at some point want to explain exactly what ZipCar does. 🙂

    I’d never heard of them before and had to do a Google search before I could understand your article…

  5. I’ve been involved in carsharing for several years, so I’m biased but I really like the concept. First, I’d point out that your fixed costs exclude the biggest cost of all: Depreciation!

    AAA estimates annually the cost of driving. In 2012, for a “small sedan” driven 10,000 miles AAA estimates the total annual cost at $5,761. Just owning the car–i.e., not counting driving it–costs $4,293 per year. You can do a heck of a lot of carsharing for less than this and pocket the difference!

    Also: Many larger metro areas have a nonprofit carsharing service too. Many of these are cheaper and better run than the corporate behemoth Zipcar. Your readers should comparison shop before automatically signing up with Zipcar.

  6. Jim M says:

    Like you Jim I am a suburban guy who needs a car in the driveway. Looking forward to the day when I move back into the city and either drive a whole lot less or give it up entirely. Zipcar and other services like it would make the latter a real possibility.

  7. Precia C says:

    It is possible to live in Atlanta and get away with a ZipCar (even though most of the population LOVES his/her vehicle and mass transit is ill-funded/ill-maintained). However if you consider a home improvement store such as ACE, Home Depot, Lowe’s, etc as your personal toy heaven a ZipCar does not a utility vehicle make. ZipCars are exactly that…zippy little cars. The saved money/time using moderate size SUV lumber-filled on the latest house project instead of renting specific vehicles at the store is insurmountable.

  8. freeby50 says:

    Zipcar appears to have $300k liability limit on insurance for drivers OVER 21 years old :
    If you’re under 21 then they only do state minimums. But for those of us >21 the $300k limit is far higher than most state minimums and more than most drivers carry.

  9. DMoney says:

    This sounds amazing for people in huge metro areas who need the freedom of a vehicle every now and then. But for people like me (a car lover), this is just a grim prelude to the future of transportation.

    My hobby is dying (understandly so, given global transportation needs and the environment), so it’s hurts my pride to laud services like this 🙂

  10. Ray says:

    I think it would be more useful in areas that don’t have a great mass transportation system and your only alternative would be to get a car or call a cab.

    For areas with a good bus/subwaym I think ZipCar is too expensive after factoring in all the membership fees and insurance add-ons.

  11. Dale says:

    I think your math is faulty. You don’t include the purchase price of the vehicle in your calculations. In addition, you say ZipCar makes sense only if you use it less than 3 days per year when the cost per month for 3 days use is close to that of owning your own vehicle. That translates to a break-even usage of ZipCar at 3 x 12 = 36 days per year.

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