Access ID:
Pay Online Button

CD Rates

Ride-services popular, but car ownership still growing

Posted on Thursday, October 1, 2015 at 9:40:22 AM

Though car-sharing is growing more popular, it may not be as cost-effective as buying a car.

The report, "Urban Mobility at a Tipping Point," took note of the fact that people are increasingly turning to services such as Uber, Lyft and Zip Car for their transportation services, but added that doesn't mean that owning a vehicle is growing less popular. In fact, the study, released by McKinsey & Company, indicated that auto sales will grow exponentially through 2025. Vehicle purchases are expected to increase from 70 million in 2010 to 125 million in 2025. 

Part of the reason ride-sharing services likely won't overtake ownership completely is that for many commuters it's fiscally wiser to seek auto financing and purchase a car. Traveling 10,700 miles per year using ride-sharing services in San Francisco would cost about $22,000 annually. That's more than twice as costly as per year financing for a new vehicle. 

There are numerous reasons for the surge in car buying. Millennials are entering the market, buying cars on their own with their first real jobs. Additionally, gas and oil prices are relatively affordable right now, which makes the cost of buying a car a bit more palatable.