After Seven Years, I’ve Bought a Car

After living car-free in downtown Toronto and Ottawa, I thought I could continue my car-free journey in the suburbs. For nine months, it worked fine, but eventually my wife and I caved. Though I was reluctant to get one, I’ve been amazed by how immediately life-changing having a car has been, and the lessons for my role as a transport planner are invaluable.

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I was one of those many teenagers who turned 16 and immediately got a car and started driving. In 2014, after owning a car for the first seven years of my driving-eligible life, I excitedly relinquished my car and moved to Toronto, curious to try life without one. Seven years later, now married, living in the suburbs, and planning for a family, I’ve once again become a car owner.

As a transport planner, having experienced both has taught me an invaluable amount about mobility, urban design, and how different communities shape our behaviours. The recent decision to purchase a car was not one I took lightly, but I’ve already learned so much from it.

This post is quite long and I’ve split it into two parts, reflecting the two key factors that influenced this decision: Finances, and Access. In short, here’s a few key takeaways from the post:

• I overestimated the cost of ownership relative to our pattern of renting cars and car-sharing. For my wife and I, owning a car is a positive investment that will break-even in seven years, relative to renting/car-sharing. If the car lasts 10 years, we will save $6,000 relative to renting in today’s dollars. In other words, car ownership is not always a financial trap.
• Financially, it makes sense to buy the most fuel efficient car possible. For the same “lifetime” cost, we could spend $4,000 more up-front on a Prius than we would on a Civic because of the fuel savings that add up.
• The built environments that I’ve lived in have played a huge role in my relationship with car ownership. While I felt lighter without a car in downtown Toronto, I felt burdened by my lack of one in suburban Ottawa. Even in a suburban neighbourhood with decent alternatives available, car-oriented design makes travel by other modes feel lesser.
• Living without a car in the suburbs suppressed our ability to travel, and much more than I expected. Though we had the option to car-share for local trips, the high up-front cost of renting made these trips less attractive and many were just not taken. In the first three weeks of ownership we’ve driven hundreds of kilometres more than we would have without a car, and we both feel better off for it (nature hikes, volleyball, family visits, and corn mazes being among the highlights). In transport planning terms, we had a lot of latent demand for travel that was not being met by our available travel options.

Part 1: Finances

In many ways, I fit the stereotype of a pragmatic, logic-brained engineer. Though not the only part of the equation, it was important for me to know the financial implications of buying a car. To date, I had been working on the assumption that car ownership would cost upwards of $9,000 annually all-in, and so if I could do better than that without a car, I was getting financially ahead. Then I read a finance blog post about owning a car cheaply and decided to do some investigating.

Costs of Car-Sharing

First, I estimated how many kilometres my wife and I drive in a typical year and calculated the cost of taking those trips with a combination of car-share and car rentals, as we have done for the past year.

One interesting thing to notice is that while the “in-town driving” is relatively small on a per-km basis, it makes up a large share of the cost. Car-share providers charge much higher in-town rates on a per-km basis than for longer trips. I’ll come back to this later in the post, because these high rates have been an inhibitor of travel for us. A trip to Ikea, for example, could cost $35, making it a bit harder to justify the outing, perhaps leading to us not taking the trip at all (or paying the same amount for delivery instead).

Moving on, the table shows that our rental patterns cost us about $5,800 a year. The question now was, could we own a car for less than this?

Which Car to Choose?

Next came time for picking the candidate car for purchase. We were initially using a $10,000 estimate to buy a used car, but decided to up it a bit to the $15,000 range to have access to newer (but still used) cars with better features. We also wanted a used car that could be dependable and was excellent on gas. We quickly gravitated to the Toyota Prius, especially after having experienced driving them so many times through the car-share system. The Prius is exceptionally good on gas, so much so that it really surprised me. I assumed a small sedan like a Civic would be comparable but I was wrong. While the newer Civics use around 7L/100km (litres per 100 kilometres), the Prius averages closer to 4L/100km (which has since been validated by our first 1,000 km of driving). Over a typical year at our driving patterns, that’s an annual savings of $750 – a price that compounds over several years of ownership.

So the buy question still remains: can we buy and own a car for cheaper than renting? With the rest of the information available now (purchase price $19,000 including taxes, fees, and snow tires, $1,000 a year for insurance, $1,000 a year for gas, and an estimated $500 a year for miscellaneous maintenance) I was ready to compare the two. Ownership costs about $2,500 a year but incurs a significant up-front purchase cost, while renting costs more annually but without the up-front cost. If we didn’t buy a car, we would have more money to invest, which would grow at what I’m estimating to be 5% per year.

With all this information, I can analyze the situation as an investor would, laying out the cash flow for future years to find where the “break even” point where the purchase of a car pays itself back in annual savings.

As expected, buying a car incurs a major loss in the short-term relative to renting, but this loss gets smaller as time goes on. By the end of the seventh year of ownership, we could expect to break even on buying a car. To me, this is good news, as it means there’s an avenue for us to save money long-term by buying a car. In other words, it won’t be a money sink. Even if the car’s resale value is $0 after 10 years, the investment represents over $6,000 in savings in today’s money.

What about the Civic?

For fun, I decided to use my model to run some sensitivity tests. First, the fairly realistic scenario of buying a Honda Civic instead for the same purchase price (remember, $750 more a year in gas)

Just that minor change in fuel expense means I would need to own the car for an extra 2.5 years in order to break even. Seen another way, if we bought a Civic and wanted the same seven-year payback period, we could only spend $14,800 up-front, compared to $19,000 for the Prius.

I’ve just proven something fairly obvious but is still worthwhile to state: it pays to buy the most fuel efficient vehicle possible. Fuel-efficient cars are also better protected against the inevitable future of rising gas prices. In another sensitivity test, I checked what would happen if gas rose to $1.80 per litre overnight (I’ve been assuming $1.40 per litre so far). The Prius would take an extra 9 months to pay itself back at this increase. To see the comparative effect on a Civic I actually had to expand by table beyond year 10 – the Civic would need to be driven for nearly 13 years (or 4 additional years) to break even at the higher gas price.

I haven’t even mentioned the ridiculousness of buying a pickup truck (the average F-150 uses about twice as much gas as the Civic). What’s clear to me from this analysis is that there is zero financial case to be made for buying one of those, unless you’re hauling payloads on a regular basis. Pickup trucks are financial losers.

Part 2: Access

The numbers are only the first half of why we bought a car. What follows in this section are the “intangibles”, but they’re perhaps even more important for understanding both our situation and those of many others.

Until the past year, I have lived in very walkable communities. This was a conscious choice; I enjoy these environments and they allowed me to forego the purchase of a car. I had a WalkScore of 98 at my apartment in midtown Toronto, 99 in downtown Toronto, and 90 in Ottawa’s Chinatown neighbourhood. These places were all historically designed for walking and were supported by great infrastructure that gave me multiple options to get around. In Toronto I was a regular user of the subway, buses, streetcars, bike share, and regional rail and bus network. I didn’t even own a carshare membership because it was so easy to get everywhere without one. Owning a car would have been a lot of cost for little benefit.

Moving, Marriage, Suburbs

I was disappointed to lose the option of bike share when I moved to Ottawa (I even wrote an op-ed about it), but my wife and I partially compensated for that with a carshare membership. Still, Ottawa lacks a lot of Toronto’s critical mass when it comes to walkability; for example, while it’s easy enough to even find big box stores within walking distance or easily reachable by transit in Toronto, in Ottawa these were mostly beyond the core in hard-to-reach suburban locations next to freeways.

Becoming a two-person household changed my situation as well. When we travelled together somewhere far, the cost of taking a train or a bus was doubled for two people, while the cost of renting a car was fixed. While a return trip on VIA Rail to Toronto could easily cost us $320 plus connections when we got there, we could do the trip with a rental car for no more than $250 all-in, so we began renting cars pretty frequently.

The situation changed for good when we moved to the suburbs of Ottawa in late 2020. We searched across the city for an affordable neighbourhood with amenities and quality transit within walking distance so we could live comfortably without a car as we both had been doing previously. We landed on a townhouse across from a big-box centre (which I’ve also written about) with a walkscore of 65.

For the first 9 months here (including a full winter) we didn’t own a car, and it was okay. The walk to the Walmart across Bank Street is within reach, but requires crossing a street with 70km/h traffic, followed by a giant parking lot. We still visit downtown, but it’s more of an outing than before and takes up to 40 minutes by transit. There’s some interesting places to walk, but much less so than the grid network downtown and a bridge and rail corridor just north of us act as a major barrier that keeps us from exploring further north. When we wanted a carshare, we had to bike or take transit to get the nearest one over 2.5km away because our community is beyond their service area.

The Trips Not Taken

I began to think about not just the trips we were taking, but also the ones we weren’t. A trip to visit my parents bore a cost of nearly $200, and a trip to Toronto upwards of that. Even a visit to see our niece and nephew in town or going for a local hike was likely to cost at least $40. When you own a car, the “variable” cost of driving is simply gas, which – for short trips, at least – is small enough that you can basically ignore it.

Access is a common metric in transportation planning, used as a measure of how many places a person can reach within a given travel time radius. In the suburbs, having a car massively improves access. Here’s a comparison to put my situation into perspective. The left image shows the parts of town we could reach by transit in 30 minutes, while the right is the same but by car.

The results aren’t even comparable. While 30 minutes by car gets us to just about every single corner of the city (plus some nice hiking trails beyond it), 30 minutes by transit leaves most of it beyond our reach, including most of the urban neighbourhoods.

Two weeks in to having a car, I can say with confidence that our access has been drastically improved. I signed up for a volleyball league in a destination I wouldn’t have been able to reach without a car (just a 12 minute drive), my wife went for a hike outside of the city (a 15 minute drive), and I was able to easily pickup groceries the other day on the way back from another trip.

The experience of living in the suburbs both with and without a car has been eye-opening for me. While we’ve been able to “make it work” without a car, it was not easy and often not pleasant. Whereas in downtown Toronto car ownership seemed like a burden, living now in the suburbs of Ottawa the opposite is true – I was burdened by my lack of a car.

Car Dependent?

So does this mean we have now become car dependent? This raises an important next question for me and my family. My wife and I hope to raise kids in our house and something we both value is the ability for our kids to move around independently. With just one car there will inevitably be times where someone needs to get somewhere and the car is not available.

Fortunately, we both feel satisfied that there are enough options in our community for the one left at home to not feel “stranded”. I took the car for a weekend camping trip and while I was away, my wife walked to the library and to the store to get groceries. When I was tired of driving after a long weekend trip, I took pleasure in biking to the grocery store instead on Sunday evening.

In other words, we live in a “car-first” community, where owning one car is a huge enabler of mobility, but there is much less pressure to own two cars because of the alternative options available.

Conclusion: How to Transform the Suburbs

Many of our suburbs, originally built for driving, are not going to become walkable meccas overnight. I find hope though, in my experience moving to the suburbs, that change can be achieved incrementally, with a focus on giving people options and making it less scary for families to become one-car households. This kind of change is possible within a decade, with investments in sidewalks, traffic calming, protected bike infrastructure, improvements to transit service, and zoning changes to permit small-scale community retailers within residential communities. Though the problem is car-dependency, the solution does not have to be removing cars altogether.