Last July, our old Saturn wagon finally gave out after 17 years, lasting five more years than the GM subsidiary that built it. It was the second car we had ever owned, with the first being a used Plymouth Horizon that lasted six years. Both had a manual transmission, and no AC. If one’s choice of motor vehicle is representative of one’s sense of style, well, there you have it.
Or, perhaps, our current situation, with no private motor vehicle at all, is better representative of our sense of style, a better deal, a better lifestyle. That’s what we have to decide – whether or not to replace our former car with a new one. Our personal situation has changed – we didn’t own a car before we started to have children, and now the children are grown and, for the moment at least, elsewhere. And they have both already learned how to drive, and drive a stick shift at that, and have had two years of practice, so keeping a around car so they could learn is no longer necessary. So should we get a new one, or do without one, and how do the policies of the City and State of New York affect our decision? Let’s review the parameters.
First let’s talk about convenience. Parking on the street in my neighborhood has become a nightmare.
My block has 800 feet of lot frontage on each side of the street, with five driveways (7 off-street parking spaces) and 3 hydrants. The three hydrants and three of five driveways are on one side. Based on a count there are a total of 70 parking spaces on the street, give or take one or two based on how large the vehicles are and how efficiently they are parked. Plus the five off-street spaces, for a total of 75 spots. But some of the off-street spaces are used for non-auto storage some of the time, with their owners parked on the street as well. That is one reason additional off-street parking is banned in much of our neighborhood – to preserve the on-street spaces that would otherwise be lost to curb cuts.
On one side of our block there are 34 one-family row houses, a two-family rowhouse, and a three-family rowhouse, for a total of 39 housing units. The other side has 30 two-family rowhouses for a total of housing 60 units. That is a total of 66 buildings, and 99 housing units – compared with 70 on-street spaces and 75 overall. Moreover, some families (fewer than in the past) have more than one motor vehicle. And on some adjacent blocks the ratio of housing units to motor vehicles to housing units is even more unfavorable for parkers, leading some of those living elsewhere to park on our block. One block over, for example, there are two- and three-family houses on both sides of the street, a situation more typical in Brooklyn where one-family homes are rare.
The real nightmare is alternative side of the street. Since so many people in my part of Brooklyn do not drive to work, they need a place to put the car all day during the workday. And on Monday and Tuesday, only half of our street is available for parking all day – with fewer than half the spaces on Tuesday, on the side of the street with the three hydrants and three curb cuts. So if one decides to own a car for use on weekends, but are among the last to return on Sunday night, they face a nightmare finding a way to park legally before going to work Monday morning.
How bad is it? At one time the neighborhood go-to spot for Monday was on the park side of Prospect Park Southwest, where it curves between 16th Street and 11th Avenue. But now those spots are sometimes taken. At one time it one could to drive to Flatbush Avenue between Prospect Park and the Botanic Garden and be certain to find a legal spot there, then take a bus to the subway to work. That area is getting loaded as well.
Obviously, not everyone who lives on my block can have their own car, and park it. In theory everyone has an equal right to use those spaces on the street. But some have to give that right up for others to be able to park reliably. Those who give up their right to park on the street, by not having their own car, get nothing from the city, except an equal tax bill to maintain that on-street real estate. Clearly my neighbors do NOT want me to buy another car. But with that incentive – free parking — to have a car, more and more people have them. With the supply of free parking spaces fixed, the more people have them the more inconvenient it gets for everyone.
Not a having a car, however, can also be inconvenient.
With large numbers New Yorkers living without their own cars, and seeking to rent cars mostly for trips out of town, there aren’t enough rental cars for all of them on the most popular weekends and holidays. We’ve already booked Zipcars for Thanksgiving and Christmas, but what if our plans change and we need a car for two days rather than one? I know these days sell out. I had intended to visit relatives last weekend, but as it happens that was Columbus Day weekend, and a week ahead virtually all the cars were sold out. All that was left was a van for huge money. And Amtrak was sold out at the time I would have wanted to travel.
No rental car company can make money paying for vehicles that only get used a few times a year, so one would expect a shortage on the most popular days. In New York City, however, there is now a shortage most weekends, a situation that seems to be getting worse. If you don’t reserve far ahead you end up out of luck, or paying through the nose.
Mass transit within metro New York? I learned the hard way 25 years ago not to count on it during a major holiday, and have been renting or owning a car ever since. Though we found out on Easter a few years ago that you can’t count on the toll takers either.
Next let’s talk about money.
As it happens I’ve been curious about the tradeoffs of owning and not owning a car in Brooklyn, and have kept careful track of how much each costs. At the time we purchased the Saturn Wagon the average car lasted 13 years, and for the first 13 years our fixed cost of ownership was $372 per month in $2010: $193 for its purchase and major repairs, $136 for insurance, $22 for taxes and fees, and $21 for maintenance. That would be $406 per month in today’s money, when adjusted for inflation, or $4,872 per year. That’s a lot of money, compared with the median family income of $58,000 in New York City in 2013 (American Community Survey data) and it doesn’t include gas, tolls and parking.
It probably isn’t possible to own a car for much less in Brooklyn. At least without committing some kind of insurance fraud – claiming you live elsewhere, for example. The Saturn was an inexpensive small car, and in addition to buying the car stripped and with saved cash (no finance charges or interest) and parking on the street for free, we generally only used it for trips out of town and drove an average of just 7,000 miles per year.
As for insurance, the primary driver (me) has never had a speeding ticket or an accident, and we qualified for every break on liability insurance there was. We also changed carriers when we thought we were being ripped off, and threatened to on a couple of other occasions. We maxed out the deductible on our comprehensive insurance, and then dropped it after just four years. Our only insurance claim, lifetime, has been for a break-in and airbag theft that, thanks to the deductable, we mostly paid for ourselves. And we didn’t bother to repair all the dings and bashes the car took from being parked on the street. For the last couple of years, the plastic panels were held together in spots with duct tape.
We did have the car for four additional years beyond the average of 13, as a result of consistent maintenance and safe driving, but I doubt we saved much per year. For one thing the frequency of repair began to escalate. For another we had inexperienced drivers under age 21 at the time, and our liability insurance cost jumped to $2,500 per year. It would have been $4,000 per year if we didn’t threaten to take our business elsewhere. And that’s with two girls. If we had boys? Forget it.
The big factor in the high cost of owning a car here? Auto insurance in Brooklyn is extremely expensive, for reasons that have nothing to do with an individual’s driving record (mine is clean), driving pattern (ours was low mileage and not to work or school), or even credit score (which the insurance companies and everyone else now seems to go by, meaning you can’t do anything unless you have a record of borrowing money). For those with our characteristics, insurance is far less expensive elsewhere. Far less expensive seemingly anywhere else. Even in other parts of New York City. Those who have clean records in Brooklyn, or at least our part of Brooklyn, are made to pay for someone else.
And are made to pay extra to make up for all those who are uninsured, and for those who pretend to live elsewhere? With most of the parking on the street, the City and State of New York could crack down on those groups simply by requiring that a vehicle be licensed and insured at a Brooklyn address to receive a permit to park on the street overnight here. And by issuing license plates with codes unique to each county or part thereof, to ease enforcement. The city and state have made a non-decision to favor the scofflaws.
Having done it recently, I can tell you that the time and money needed to get children a license and teach them to drive is prohibitive in Brooklyn. In addition to a five hour course, New York State requires a minimum of 50 hours of supervised practice driving with at least 15 hours at night (after sunset) at least 10 hours in moderate to heavy traffic. I didn’t really feel comfortable until each child had twice that. But those under age 18 are not allowed to drive in New York City without a dual control car, so practice meant driving out of the city from Brooklyn – the only borough that is not adjacent to a suburb – before we could even start. Perhaps others skimp on the practice time, but my children each passed the driving test on the first attempt, while many of their friends flunked – and have given up on getting a license.
In addition to the time there is the money – an additional $1,300 per year for insurance for several years, and more for boys. How can most people afford it? How could there be anyone under 30 whose parents are not very well off driving around in Brooklyn? Apparently, they afford it by not bothering to have insurance – a cost that is socialized by no-fault insurance and uninsured motorist protection. But it is only socialized to those living nearby. That may be one reason insurance is so expensive in Brooklyn. And with the automobile synonymous – for some – with middle class status, full citizenship, even racial equality, no one is willing to take action to take the keys from those who don’t have the cash. Not until after they kill someone, and perhaps not even then.
Owning a car in Brooklyn is extremely expensive. Apparently, however, not owning a car can be expensive as well.
For the last two years we owned the Saturn we allowed our daughters to keep it in Upstate New York, where they attended college. I kept track of the cost of trips we made by other means that would have been made using the car if it were still here. And between semesters, when the car actually was here, I estimated how much the trips would have cost by alternative means in its absence. Taking the two together, the cost would have been $344 per month, not including gas and tolls, not much less than the $406 per month it costs to own a car in Brooklyn, in today’s dollars.
The non-ownership cost included an average of $23 per month for additional transit, car service, and intercity bus trips. That isn’t much, because one of us has an unlimited ride card, and trips for which the cost of parking would have exceeded the per-ride transit fare didn’t count. We would have spent $95 per month on Zipcar over those two years, and $225 per month on rental cars, on average.
Some of these costs are inflated by temporary personal circumstances during the last two years. Virtually all of the $225 per month in rental car cost was associated with visits to relatives in Upstate New York who were having with health problems, and visits to our children in college. As of this moment the relatives with health problems have relocated to a senior citizen complex in Schenectady, where one of us can visit for a $111 Amtrak fare, a taxi, and a couple of rides on the subway. There is only one child left in college at the moment, and not long from now there will be none.
On the other hand, the circumstances of the past two years have prevented us from doing things we once did in our car – hiking, camping and otherwise vacationing in Upstate New York. I explored difficulty of doing so without a car, due a lack of related transportation options, services and social infrastructure, in this post. So while I expect our non-owner costs would fall over the next couple of years, due to fewer trips, I don’t expect them to fall by the full $225 per month.
It isn’t just the number of trips, however, that makes our rental car costs high. It is the extremely high cost of renting a car in Brooklyn. Extremely high even when compared with San Francisco, an area that is otherwise as expensive or even more expensive than Brooklyn. It is more expensive to rent a car in Brooklyn, in fact, that it is to rent a car in Manhattan – from the same company. And if you try to rent a car in Manhattan at the Manhattan price, and they find out you are from Brooklyn, they will charge you more unless you pitch a fit.
Why so expensive? Part of it might be a policy, de facto endorsed by our state politicians, of having people from “urban” Brooklyn pay for all the insurance fraud committed by others in Brooklyn, rather than attempting to stop that fraud. That could explain why people from Brooklyn are charged more to rent cars than people from Manhattan.
Some years ago the State of New York had a “vicarious liability law” that allowed people to sue a rental car company to recover any damages caused by someone renting a car. Using the vehicle as a getaway far in an armed robbery, for example. That law, protected for years by the Speaker of the State Assembly Sheldon Silver (who works for the trail lawyers) inflated the cost of renting a car, the car rental companies said. Then the Supreme Court struck it down, and it disappeared. Did the cost of renting a car fall, as the car rental companies claimed? No one followed up, but I suspect the answer is no.
If one doesn’t own a car, the cost of liability insurance is an issue in another way. As car owners, our liability insurance had been covered by our owner’s policy, even when we were in a rental car. Now that coverage is gone. In a crash our credit card would provide insurance for any damage to the rental car company’s vehicle, but not for any other liabilities – people who were injured for example. Zipcar provides up to $300,000 in liability insurance per crash as part of the overall cost of renting the vehicle. Avis – the same company – only provides the state minimum of $25,000 per person and $50,000 per accident for injuries and twice that for death, unless the renter pays an additional $15 per day for $2 million in insurance.
I asked someone who has never been a car owner how he handled in the liability insurance issue. Basically he takes the state minimum and, as a safe driver, takes the risk rather than pay the extra $15 per day. Although I’m a safe driver as well, that didn’t seem right, particularly given that some other driver that is both uninsured and at fault can still come after you for money in a crash. That’s the “no fault” mentality.
An article in a magazine suggested a non-owner’s liability insurance policy. Our former auto insurance carrier didn’t even want to talk about it, and a competitor provided a non-owner price that was more than two-thirds the cost of a liability policy for our own car, and a lot of money. We’d have to rent a car 53 days a year to match the $15 extra per day paid to the car rental company, and we wouldn’t even come close. Someone suggested an excess liability insurance policy, which covers any liability in excess of the insurance you have on a regular policy. But insurance companies, it seems, will not sell you one unless you also have your own auto insurance, even if you don’t own a car.
The bottom line is the cost of insurance is a burden whether you own a car or not.
Part of the high cost of renting a car in Brooklyn might be taxes. The game in NY state government is to hand out the goodies to those in the room, and then start looking around for some unimportant people outside the room to stick with the bill, and car renters are thought of as an easy minority to pick on. Thus rental car taxes are fairly high.
Another factor, however, may be monopoly power. According to Crain’s New York Business
“As anyone who has rented a car lately knows, prices are up. A lot. Avis Budget happily reports that prices have increased for six consecutive quarters, including a hefty 6% rise in leisure rates in the most recent one. And don’t forget the profits from selling insurance to the weekend-getaway crowd, or gas at above-market rates.”
“One big reason is that competition has withered in the past year or two, paving the way for price hikes. Avis Budget, for instance, snapped up Zipcar for $500 million last year, and then bought discount renter Payless for $50 million. More significantly, Hertz bought rental giant Dollar Thrifty for $2.3 billion in 2012.”
What about new entrants to the market?
“It’s a good bet that the car-rental oligopoly will last a while longer. Startups like Uber and Lyft are taking on the taxi business, but Silicon Valley’s attempts to take on the $24 billion car-rental industry have yet to gain traction.”
For one thing, where in Brooklyn would new competing rental car companies put the cars? In other markets, where most car renters are business travelers, car rental companies try to jack up prices by monopolizing on-airport locations, they way airlines try to jack up prices by monopolizing control of gates. In Brooklyn, one cost of renting a car is the high cost of parking them in the limited number of off-street garages in the areas where many people don’t own cars.
Think about it. If I were to buy another car, I could grab one of those 70 on-street parking spaces for nothing, battling it out to take it away from my neighbors. As a non-car owner, however, I am forced to pay, as part of the cost of my car rental, for a garage space for the car I use. And pay extra due to the monopoly power created by access to garage spaces. The car owners get all the on-street spaces, and the non-owners get none of them.
It doesn’t work that way everywhere. Across the river in Hoboken, car owners are required to get permits to park legally on the street, with one side reserved for residents and another for all permit holders, including visitors. Visitors staying more than four hours require a visitors’ permit. The permits aren’t expensive — $15 to $90 per year for residents – but they do require proof of both residency and insurance.
For non-owners, Hoboken has had a “corner car” program of assigning a limited number of on-street parking spaces to a car sharing company. So non-owners get a spot on the street as well.
It hasn’t worked perfectly. For one thing all the spots were assigned to a single rental care company – one of the big three at that – resulting, some say, in poor service. However the city claimed the number of people with parking permits fell after the program was instituted.
New York City could go Hoboken one better by assigning on-street parking spaces to more than one, competing car company, with some spaces perhaps going to new entrants to the market. And putting one such space at every intersection in the communities that wanted them (which would take up one spot per two blocks). As in Hoboken, these could be exempt from alternative side (with the company required to sweep out the spot by hand periodically when picking up the car for maintenance). By increasing the parking available to rental and shared cars, increasing rental car supply, and bringing in more competing companies, perhaps New York could reduce its sky-high rental car prices.
As it is the message I get from the City and State of New York is to buy my own car. That’s the incentive they are providing. If there were one spot on my street made available for a corner car, perhaps I’d see things differently. After all, since I no longer have a car, there is theoretically one more on-street space available for someone/something else than there was a few months ago. Although looking at the street on a Sunday evening, it would appear that someone else might have already grabbed it.