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Automotive Finances & Money Frugality

Car v.s. Public Transportation: Which Is More Cost Effective?

by Timothy

When it comes to personal finance, we are all looking for ways to save more money. Our household budgets are filled with both big and small expenses that we imagine can be cut out to save us loads of cash or at the very least, spent better elsewhere. One of the things you have surely considered is using public transportation rather than your own vehicle.

Are the Bus and Train Cheaper?

It would be easy to assume that public transportation is cheaper, because a bus token is far less expensive than gas, but those are not the only costs to consider. Take a step back to your high school economics class and try to remember the lesson about opportunity costs. These, as you might recall if you were awake for that class, are the things you give up when you choose one option over another option. Although they are not measured in dollars and cents, they still have to be considered whenever you make a financial decision.

There are a lot of opportunity costs when you take public transportation instead of using your own vehicle. For me, the biggest cost is comfort. Let’s be honest, public transportation is frugal, but just not that pleasant. Buses and trains do not look a bit like the ones on television do they? I used to live in Chicago and every time I see a train station or subway on ER or any other Chi-town based show I think, they must have shot that in the nicest train in city, or it does not exist in reality at all. Most trains and buses are not very clean and not always filled with people with whom you want to share a ride. Taking public transportation also takes a lot of extra time. You will have to get to the station, possibly in your car where you will have to pay for parking, then get on one or several trains and buses to get to your actual destination. It can easily turn what would have been a 20 minute commute into an hour long one.

Of course, the time cost is debatable depending on where you live. When I was in graduate school in a small city in Indiana public transportation was free for students which was a dream during those frugal times. But, it was only buses and took 45 minutes to get to campus. To drive it would have only taken 20 minutes but I had to pay a premium for parking. However, since I often had to be on campus in the evenings when the buses were not running, I had to purchase a parking pass anyway, so the bus was not really much savings (gas back then was still pretty cheap). On the other hand, if you live in a big city like Chicago or New York City the drive could take you an hour, even if it is only a short distance. Those drives too could tend to be very unpleasant; lots of sitting in traffic and listening to car horns and colorful language choices from other frustrated drivers.

Red Line, Purple Line, Conga Line!!!

One of the other things that was problematic for me is that I could never figure out the bus or train maps and schedules. I tried hard in school to manage my personal finances and care about the environment, which heavily leans toward public transport. Once, after waiting and waiting on a bus that never arrived (and I was not entirely certain was the right bus anyway),  I decided just to walk all the way home. I do not recommend this. Needless to say it was my last solo attempt at the Indiana buses. If you are lucky, like I was, to know someone willing to help you understand the labyrinth that is the city bus or train schedule, beg them for help.

When it comes to the actual money you would spend on using your car over public transport, the public transport is likely going to be cheaper. Passes for the public transportation are somewhere between $20 and $50 a week, depending on where you live. If you have to park your car at the station you can add on another $50 a week at $10 per day. That means that your personal finance would be impacted at about $100 a week, in the city if you drive your car to the station. It drops to less than $50 if you can catch a bus close to home.

If you drive your car you have a lot of costs to consider. Even if the car is paid off you are still paying insurance at a rate of $100 a month, if you have a relatively cheap policy. That adds $25 a week. You can also figure a tank of gas a week at an average cost of $2.50/gallon for a 10 gallon tank. That adds another $25 per week. Add to that the cost to park in the city. In a place like Chicago your parking space would easily cost you $20/day. Added up, driving your vehicle to work will cost you at least $150 per week.

It is pretty obvious that the frugal choice is to use public transportation if you are looking at numbers only. But, remember to also consider those opportunity costs. Is your time and comfort worth the extra $50 or $100 per week? Are you spending extra money on child care because of the extra time that public transportation adds to your commute? Are you using your car for other things like stopping at the store or going out with friends after work? If you do not own your car the choice is obvious, take the bus or train and save a bundle. But, if you already have a car is it really that cost effective to take public transportation? Maybe, maybe not. It comes down to your personal preference. Only you know how comfortable you will feel using public transit and what you have to sacrifice for the extra time and effort it takes to do so.

This is a guest post by Timothy who is a personal finance writer and part of the team at Credit Card Finder. For more information, simply visit our website or subscribe to our RSS Feed.

About the author

Clever Dude

13 Comments

  • It really depends on the city. In Ottawa, Ontario, busses can be faster than driving during rush hour because of the special bus lanes. Parking downtown costs a fortune, but is free in the designated “park and ride” lots (though there could be more of them.) Even if you own a car, it can often be advantageous to take the bus to work instead of driving.

  • “In a place like Chicago your parking space would easily cost you $20/day.”

    Wow, talk about trying to use a stat to justify your point. You were up to $50 vs $100 so you had to had $100 in parking fees that is very hard to identify, plus lots of companies will have some sort of parking available for you that you don’t have to pay that.

    Really you just proved that driving is likely to be cheaper assuming you have a parking space at work.

  • Another thing to consider is if your company subsidizes public transportation. Where I live a monthly pass costs $89, however full time employees at my company only pay $9. This is cheaper than 1 day of parking downtown. Definitely saves money!

  • Like Melanie, I too live in Ottawa. The high cost of parking downtown ($200+ a month) is why the buses are so efficient and successful in downtown Ottawa.

    Many cities have kept the cost of parking low in the downtown area, which just sabotages public transit.

  • When I compared the various options of driving myself, carpooling, and public transportation, carpooling won hands down. Public transportation for me can turn a 15 minute (one-way) commute into a 1 hour one. By setting up a carpool with 2 other people that live nearby, I have cut my gas cost to approximately 1/3 of what it was driving when myself and my commute time has only increased by 5-10 minutes. One has the benefits of public transportation and none of the drawbacks (unless you don’t like your co-workers ;->).

  • When considering the opportunity and other non-monetary costs, don’t forget that your time can be productive on transit. It is usually a complete waste while you are driving a car. When I am riding public transportation, I usually am working on my laptop – reading/writing e-mail, composing Powerpoint slides, or writing a blog entry or word processing document. I wouldn’t be doing those productive things while driving.

  • Public transport in my place is the most cheapest way of traveling mode. It is no doubt the clear winner, but it is not made available in every place. Besides, to travel with public transport will need to travel earlier to avoid any unforeseen issues which could lead to late arrival at the destination. I would say it would need more time in replacement of cost which in a way, sacrificing one for another.

  • I will admit Public Transportation can have its hassles. I live in DC so between metro and metrobusses, this city is pretty easy to live in without a car. I ditched mine over a year ago, and will never look back! Yes, I have to wait 15 min for a bus, or 10 min for the train. But while I’m waiting, I’m listening to music, reading a book, playing a game on my iphone, or just spacing out. While public transportation isn’t perfect in the country (yet) I would encourage people to give it a chance. The more people who use it, the more funding might be allocated for improvements, and at same time helping take more cars off the road, (making it easier for those who actually NEED to drive, vs WANT to drive)

  • u r just talking of private costs what about government subsidies to the car or tax costs. it at least approximates ones private costs of 7K.
    in other words u r paying about 14k per year to use your car. i believe that totals to government subsidies of $2 trillion per year. actually the costs of the car are infinite is it cannot meet its environmental costs for one. the real costs of the car is the life of every living thing on earth.

    c ezra mishan’s book “growth & te8hnology the price we pay” appendix c.

  • you also forgot that, through your taxes, you are already subsidizing public transportation, so not to use it means you are paying for something that you don’t use. this should be included into the cost of using private transportation when comparing public v. private.

    then, of course, there is the opportunity costs associated with public transportation as mentioned. It takes me over 1 hr to commute by public transpo, whereas public transpo it takes 30 minutes one way, which means I lose 1 hr by taking public transpo every day. if i relied solely on public transpo, it would cost much more in terms of time, b/c the places I want to go aren’t public transpo accessible, and you are at the whim of where the public transpo goes for your activities. if you live in a city, then that is fine, but if you do not and you choose to do things outside the city, then it limits your lifestyle. so i agree it is not always by the simple math equation.

  • dear tim: as to public transit being subsidized that is true here in milwaukee our tickets covers only 1/3 the true cost of the bus service.. and busses do need roads but per passenger much less. ditto they pollute much less. it could be anywhere from 10 to 40 times less.

    cars slow down buses by congesting the roads. if buses were allowed express roads & to trip lights against cars they would be much faster. as to time lost you cannot read in a car or do other things in a bus u scan. in milwaukee we have bike racks on busses providing access from home to bus to destination allowing me to access any place i want.

    in appendix c of “growth & technology the price we pay” by mishan he posits that everyone starts out in a bus. in stage 2 he posits it would be advantageous for one of the passengers to take his car since the road is uncongested. in stage 3 he posits everyone will then do this and the roads will congest to a stop. he concludes this is a catch 22 as eveyone would be better off staying in the bus in the first place. put another way if everyone who drives cars today agreed to take the bus they would
    have transportation many times cheaper and faster than they now have with their car. with far less pollution etc.

  • Parking by my office in the Chicago Loop is $28/day. If I look around and walk a bit I can get it for as cheap as $10/day . . . On the other side of I-94 I’ve seen it down to $6 though I have to walk more than if I just took public transit. Worth noting Street parking all around the city is also going way up in price since they decided to privatize the parking meters.

    At $86/mo pretax for unlimited use of Chicago busses and El trains and Google Maps’ new ability to route you to your destination using the available public transportation options I rarely feel a need for my car . . . Except those times where I’m going from one Chicago neighborhood to another and a 20 minute drive with free parking at both ends (assuming the place has it which is becoming more scarse as time goes on in the hipper neighborhoods) becomes an hour transit ride. Of course there are taxi cabs for those situations as well.

  • It seems like this article did not consider the externalities of the two options (personal car vs. public transit). Maybe that’s college economics, not high-school?

    We should consider the costs of using lots of foreign oil, in terms of pollution, climate change, military expenses to ensure continued access to foreign oil, etc.

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