If you’re like most college students, you’re always looking for a good way to trim a few bucks off of your spending. From crowding four (or more) people into a two-bedroom apartment, to joining every campus club for the free food, students know how to save money in college.
But such frugality can be a huge pain, especially if you’ve decided to forgo car ownership in favor of public transit, bumming rides off friends, and biking. Is there a way for college students to forgo car ownership without surviving exclusively on public transit and other people’s kindness?
Zipcar, a shared car rental service promises to deliver the benefits of car ownership without all the costs. However, it’s not clear that it delivers. We’ll explain how Zipcar works, and when it makes good financial sense to join.
- Essentially a short term membership based car rental service
- Cars are located on or near most college campuses
- Everything you need is included in your rental
How Zipcar Works
Zipcar is essentially a short-term car rental service. You join Zipcar for $7 per month (or $70 per year), and you gain the ability to rent a designated Zipcar whenever you want. To rent the car, you use an online app to reserve a vehicle for a few hours or up to a few days. At the designated time, you unlock the car, do your errands, and return the car to the designated location.
Zipcar pays for insurance, gas, maintenance, registration, and all other costs of ownership. As a member, you only pay when you drive. You can drive up to 180 miles per day without incurring any fees on top of the rental charge. After the 180 miles, you pay 45 cents per mile.
How Much Does Zipcar Cost?
Zipcar costs $7 per month to join (or $70 annually), but you also pay on a per-use basis. For short trips, Zipcar costs around $9 per hour to rent. If you rent the car for a full day or overnight, you get a bit of a discount. Usually rentals run about $75 per day.
To compare, $75 is almost twice as much as you would pay to rent a car from a local car rental place, but Zipcar comes with other benefits. For example, you don’t have to pay $12 to $20 per day for insurance from the car rental company, and you don’t have to pay for gas. That’s assuming a car rental company will even rent a car to a college student. Many companies have age restrictions that preclude many college students from renting. That said, Zipcar is a bit more expensive than renting from a more traditional car rental company for longer trips.
For shorter trips, you’ll pay an average of $9 per hour. However, it’s important to note that you have to pay for the time you’re driving the car, and for the time the car sits idle (while you do whatever you need to do). For quick trips, like picking up a friend from the airport, grocery shopping, or dropping your dog off at the vet’s office, Zipcar is fairly cost effective. But if you’re going to a concert or hoping to spend a day hiking, Lyft or Uber will probably prove to be less expensive.
Zipcar Student Pricing
Zipcar has made a huge focus on students and universities. Right now they are offering a special where students can join Zipcar for just $15 per year for the first year. That's almost an 80% discount.
Is Zipcar a Good Choice for College Students?
Owning a car is extremely expensive. AAA estimates that small sedan drivers spend an average of $6,354 keeping their car on the road each year. With an older, paid-off vehicle and no parking costs, you might be able to cut that down to about $3,000 per year, but not a lot lower. Spending $250 to $500 per month on transit isn’t a great choice for most college students.
For some students, Zipcar could prove to be a lot cheaper than owning a vehicle. For example, if you can walk, bike, or take public transit to class and your job, then you don’t need a vehicle day in and day out. If you end up paying for a one-day road trip once per month, and three or four two-hour trips, Zipcar is a good frugal option. It’s especially frugal if you can pile your friends into the Zipcar and get them to contribute to your costs.
However, people who will use Zipcar rentals more than twice per week (more than about 30 hours per month), the model will cost more than owning a car or using ride-sharing.
If you’d like occasional access to a car, but you can keep yourself from developing a bad “Zipcar habit,” Zipcar makes a lot of sense. Unfortunately, the convenience of renting from Zipcar could turn a grocery trip once per week into an everyday habit.
If you decide to opt into Zipcar, be sure that you account for it in your budget. College students who use Zipcar, but don’t overuse it, will actually enjoy the benefits of car ownership without all the costs.
- Pricing - 90
- Customer Service - 80
- Ease Of Use - 80
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.