WASHINGTON, D. C. (Wednesday, April 10, 2019) ––A tad more than a third (or 37.3 percent) of all households in the nation’s capital are car-free, tabulates the U.S. Census Bureau. How do you get from here to there? Gone are the days when your options were limited to car ownership, public transit or hailing a taxi. In today’s on-demand, always-connected world, there are more ways than ever to secure a ride or vehicle, whether you’re grabbing groceries, taking a road trip or vacationing far away. But there are four major alternatives to traditional car ownership, which carries an average annualized cost of just shy of $9,000 per year, explains AAA Mid-Atlantic. But while modern conveniences like car-rental, car-sharing and car-subscription services are attractive, there are safety and insurance risks that come with participating in each of the top alternatives.

American are expected to purchase 16.8 million new vehicles during 2019. With new car prices averaging $37,577, cars are a huge investment. Vehicle registration rolls in Washington, D.C. jumped to 337,100 vehicles in 2016, compared to a total vehicle registration of 224,899 vehicles during 2008 through 2010, according to Federal Highway Administration data. Today it is all about “access to mobility.” But it behooves you to check with your insurance agent before choosing a modern alternative to vehicle ownership.

“Washington, D.C. is the personification of car-free households,” noted John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs. “Yet the city’s for-hire vehicle industry generated three-quarters of a billion dollars ($790 million) in fare revenue during Fiscal Year 2018. What is more, most consumers fail to understand the true costs of using ride-hailing services as a primary mode of transportation.”

There were “about 1.8 vehicles available per U.S. household in 2016,” according to Governing. That compares to an average of only 0.86 cars per abode in the District of Columbia. In contrast, there were 1.34 vehicles per household in Alexandria, Virginia, 1.40 vehicles on average per domiciliary in Arlington, Virginia, and an average of 1.08 automobiles per domicile in Baltimore, Maryland during 2016.  

The tale of the tape reflects “a city’s reliance on cars,” explains Governing. However, sometimes going car-free is not a lifestyle choice. Some city residents, especially in high poverty areas or low-income neighborhoods, simply can’t afford vehicle ownership, explains AAA Mid-Atlantic.

The Washington metro area now boasts 4.1 million registered vehicles. AAA’s 2018 Your Driving Costs study revealed the average annual cost of owning and operating a typical vehicle was just under nine grand, or $8,849, compared to $8,384 per year for an electric vehicle. However, the annual cost was owning a minivan was $9,677, compared to $20 more annually for a medium SUV at $9,697. The average annual vehicle ownership cost of a large sedan came in around $9,804, compared to $10,215 for a pickup truck.

Ride-sharing programs are all the rage these days. But the rates vary, depending upon which form you hail on the apps. It is considered “the least ‘ownership-y’ of all ownership options.” Cost is a big factor. In major cities across the country, those using ride-hailing services spent an average of $13.15 per trip on average, spending 15.11 minutes and traveling 6.66 miles, according to AAA’s analysis of the costs.

Then there is the tried and true process of going “old school” by hailing a taxi or cab. The local for-hire ride industry “generated almost $790 million in revenue” during Fiscal Year 2018, according to the District of Columbia Department of For-Hire Vehicles (DFHV). That tally includes taxis producing “over 10 million trips that generated over $150 million in fares,” notes the February 2019 DFHV newsletter. “The District’s estimated 178,000-plus private for-hire vehicles were responsible for generating nearly $6.4 million in surcharge payments.” 

Another alternative is the $5 fare for each one-way trip on MetroAccess in the District. Here, we break down the recommended alternatives to traditional car ownership and their perks, plus what you need to know before you’re handed over the keys to each alternative, cautions AAA Insurance Services. “Am I covered?”

RENTING A CAR

Best when: You need a vehicle for longer distances or periods of time—or at the airport.

Are you covered? If you have a personal auto insurance policy, probably. If you don’t have a personal auto insurance policy, buy coverage at the counter. Talk to your insurance agent if you have questions before you rent.

Surprising perk: If rented with a credit card, some credit-card companies cover damage to the vehicle.

Car-rental companies are nothing new, but there’s no doubt that the car-rental industry is changing. From finding ways to reduce their carbon footprint to incorporating smartphone technology into the customer experience, these traditional companies are striving to stay relevant in an evolving landscape. In fact, some of them are launching their own car-sharing programs, allowing them to tap into the trend of on-demand transportation.

Despite emerging alternatives, however, there are times when traditional car rental may be your best bet—especially if you’re traveling in an area where on-demand services aren’t available. But are you covered when you rent a car the old-school way? The answer depends largely on whether or not you have a personal auto insurance policy, as well as the decisions you make at the rental counter.

MEMBERSHIP-BASED CAR-SHARING SERVICES

Best when: You need a vehicle to travel short distances, sometimes or frequently.

Are you covered? If you have a personal auto insurance policy, probably. If you don’t have a personal auto insurance policy, you’ll be covered by the basic insurance included with the service—but you may want to consider upgrading, if it’s an option.

Surprising perk: Some car-sharing services do business around the world—so you might be able to take advantage of your membership at home and abroad. Ever see bright logos on the sides of cars, zipping around the city? Or maybe you’ve scrolled past an ad for a service that’s leveraging technology to make renting a car as easy as possible.

Membership-based car-sharing services are rising in popularity, especially among urban dwellers who want wheels on-demand but can’t or don’t want to own a vehicle. While each service—many of which are subsidiaries of traditional car-rental companies—works slightly differently, the premise is the same: Once members are approved and pay a small fee, they are able to use vehicles for periods of time ranging from minutes to overnight. Some companies require reservations and designate pick-up and drop-off spots, whereas others simply park vehicles in allocated areas, making it possible for a driver to gain access with the swipe of a membership card. Members are billed each time they use a car.

PEER-TO-PEER CAR-SHARING SERVICES

Best when: If you want a car on the fly—ideally within walking distance.

Are you covered? If you have a personal auto insurance policy and drive a car from a peer-to-peer car-sharing service, probably. If you don’t have a personal auto insurance policy, purchase the insurance offered by the service.

Surprising perk: Owners specify whether the vehicle is to be picked up or delivered, so you can select the circumstances that are most convenient for you. We can rent other peoples’ homes with a few clicks—so why not their vehicles, too? Peer-to-peer car-sharing—also known as one-to-one car-sharing or person-to-person car sharing—allows local people to rent their vehicles to each other in exchange for a fee, often via smartphone app.

These services are especially popular in urban areas, where car ownership can come with challenges like finding regular parking. They also appeal to environmentally conscious individuals who want to see fewer cars on the road, as well as those who want the flexibility of choosing the cost and location of a vehicle. Rental fees are based on the type of car and its location.

CAR-SUBSCRIPTION SERVICES

Best for: Individuals who want a shiny-new ride all the time.

Are you covered? If you have a personal auto or a commercial auto policy, no. However, most subscription services include good insurance with the subscription fee.

Surprising perk: Unlike leasing, many car-subscription services allow you “flip” your car frequently.

Today, subscription services are all the rage. From do-it-yourself meals to personal styling services to on-demand media, there’s no shortage of customers who are willing to pay a monthly fee in exchange for access and perks. The car industry has caught on, too. Car-subscription services, most backed by well-known car manufacturers, give users access to certain vehicles in exchange for a monthly fee. Like car-rental and car-sharing services, car-subscription services are an attractive option for those who are looking for an alternative to traditional car ownership, specifically leasing.

The services are especially appealing to tech-savvy drivers who like the gratification of getting new-to-them car regularly, sometimes delivered within minutes after the request. Third-party car-subscription services that aren’t backed by vehicle manufactures are also popping up. Most of these services offer used vehicles at a wider range of pricing. Here is the annualized cost of car ownership, according to AAA’s 2018 Your Driving Costs study.

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AAA provides automotive, travel and insurance services to 58 million members nationwide and nearly 79,000 members in the District of Columbia.  AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.  The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit  https://aaa.com