Weighing it all up

We have worked out it costs us around $6837 per year to own and operate our vehicle. It is broken down as such:

Item	$ (pa)
Repairs and service	734
Comprehensive insurance	460
CTP / Rego	762
Depreciation*	2381
Total (fixed costs)	4337
Petrol	2500
Total (fixed and variable costs)	6837

This makes transport expenditure roughly comparable to the annual cost of groceries (excluding alcohol, probably).

To make this work, we therefore need to rent cars, hire taxis and access public transport for less than $6837 per year.

$6837 potentially goes a long way. A back-of-the-fag-packet calculation for instance, shows that this is the equivalent of around 180 days - or half a year's - worth of car hire (long term deals and petrol excluded).

Assuming that over a year, we would want to hire a car for maybe 1 weekend in 3, this would only cost us around $1600-$1800 per year. Throw in the extra public transport fares and the odd taxi ride, and I reckon there's still change left over.

In summary, convenience [when we compare ourselves to the Joneses] will scupper this plan, not money.

Cold hard cash

Whilst there is undoubtedly an element of idealism involved in this trial, it is also about cold hard cash. We believe that it will prove to be better value.

Significantly, when you buy a car, you must generally select for the highest common denominator.

So, for example, if you have 2 children and like to go off camping, you require a large vehicle (possibly an SUV), despite the fact that for probably 95% of your trips a small, 1.1 litre vehicle is sufficient.

In reality—and this is directly relevant in our situation—you tend to compromise.

4 years ago, when we first moved to Australia, we bought a 2.6 litre V6 Magna. This proved both too big for most of our needs and in the end too small and too two-wheel-drived for the more fun things in our lives.

Thus we had significant money tied up unproductively.

Multiply this over an entire city, and there must be huge amount of wealth allocated inefficiently.

So for us, if a vehicle is required, the option of taxi or car hire will allow us to select a vehicle appropriate for our journey.

Thus, we can choose to spend $130 per day on a 4WD when needed, otherwise it's just $35 for a Nissan Colt or a few bucks for a taxi journey.

Furthermore, the fixed costs of owning a vehicle are often comparable to that of running a vehicle. In our situation, petrol represents only around 1/3 of the annual cost of the vehicle. The marginal cost of fuelling it up and using it are low, so encouraging you to use it, once you've got it.

So the answer does not lie in simply not using the vehicle, but in not even owning one.

This is the service economy, beloved of environmental thinkers like Amory Lovins.

Instead of owning fixed assets, households and firms will lease them. So you won't own your television, but rent it. We won’t own a car, we will simply access one when needed. The advantages are manifold:

• you have access to the latest technology that will improve both the quality and efficiency of the product available to you
• you are not directly responsible for the maintenance of the product
• you are not responsible for the disposal of the goods

And in the broader economy:

• the supplier of the goods is in the best position to judge when it is most efficient to take goods out of circulation and replace with new
• the supplier is often in the best position to take back [and recycle] goods that are no longer required in circulation