Have you ever thought about owning a car in New York City?
We’ll demystify the topic of car ownership in the Big Apple in this video.
I’m Nick at Hauseit. Check out our website www.hauseit.com to learn how to save money
on commission when buying and selling real estate in New York City, Long Island and the
Hudson Valley. So let’s get started!
So, why Own a Car in NYC?
NYC’s proximity to the Hudson Valley, Long Island, the Hamptons, hiking/outdoor areas,
farms and numerous beaches in New York and New Jersey provide for a plethora of day and
weekend trips which are less than two hours from the city.
These types of trips are particularly appealing if you’re tired of the repetitive drinking
and eating scene in NYC.
For the more adventurous, there are several other great destinations a bit farther away,
such as Lake George in Upstate New York which is approximately a 4-hour drive from NYC.
It’s also possible to drive to other major cities such as Philadelphia and Baltimore
which are two and three hours from NYC, respectively. A car can also be used in the winter for weekend
ski trips and for apple, berry or pumpkin picking during the warmer months.
Owning a car makes it considerably easier to go on spontaneous trips or book things
last minute compared to renting a car, which is a major turn-off and source of stress for
many New Yorkers who would otherwise love to leave the city from time to time.
How Much Does it Cost to Own a Car in NYC?
The cost of owning a car in Manhattan with garage parking is roughly $500 a month for
parking, $200 a month for insurance, plus your actual car or lease payment. Leasing
an entry level BMW such as a 228xi for $400/month means your monthly cost would be $1,100, or
$13,000/year, excluding gas, tolls, registration, inspections and maintenance.
If you opt to lease a less expensive car, such as a Mazda CX-30 for $275/month, your
total cost would be $975/month or $11,700/year.
Here is the sample cost of ownership of a BMW 228xi in Manhattan, excluding incidentals
like gas, tolls plus vehicle registration and inspections:
· Manhattan Parking: $500 · Insurance: $150
· Lease Payment on BMW 228xi: $400 · AAA: $11
The total cost comes out to $1,061 a month or $12,732 a year.
Manhattan residents receive a small discount on parking through the Manhattan Resident
Parking Tax Exemption.
But if you’re looking for even bigger savings, you may want to park your car in Brooklyn.
This makes a lot of sense if you live on the East Side of Lower Manhattan, as you can easily
take the subway just a few stops across the river or hop on a Citibike, Ebike or electric
scooter to cross the Williamsburg Bridge.
Here’s the cost of the same setup if you park in a covered lot in Williamsburg:
· Williamsburg Parking: $300 · Insurance: $150
· Lease Payment on BMW 228xi: $400 · AAA: $11
The total cost comes out to $861 a month or $10,332 a year.
This may sound like a lot of money. However, if you rent a car to take weekend trips outside
the city more than twice a month, the math of owning a car starts to make sense versus
continuing to rent cars.
And of course, you can pay considerably less per month than in our examples above by purchasing
a beater car and parking it on the street, meaning the only thing you’re responsible
for (aside from maintenance, registration/inspections and buying the car itself) is insurance.
Skimping on garage parking is not for the faint of heart, and if you choose to, prepare
yourself to spend hours each week moving your car around in the early mornings and fending
off Traffic Enforcement officers.
The math of owning a car makes even more sense if you’re part of a multiple earner household
or if you already find yourself spending considerable amounts of money on transportation for weekend
getaways and other tips outside the city.
Should I Lease or Buy a Car in NYC?
We recommend leasing a car versus buying in NYC. The main reason why it’s better to
lease is because you’ll have a newer car which in theory means less time handling repairs
and maintenance or dealing with out-of-warranty repairs, particularly if you buy a used car.
Most mechanics are far out in Queens or Brooklyn, so it’s a major logistical headache and
time killer every time your car needs work.
An additional benefit of a lease is the fact that you won’t have to deal with selling
or otherwise disposing of your car later down the line. Once your lease expires, you simply
drive it back to the dealership and hand over the keys.
Moreover, some dealers will forgive small damage or excess mileage if you agree to lease
a new car with them.
Trying to sell a used car in NYC can be a huge drain on your time and energy, and the
alternative is to use it as a trade-in at a dealer, but dealers will always offer less
than a private party.
The other advantage of a lease is that you can upgrade your car every few years. Not
to mention, lease payments are generally lower than financing payments.
Cost and Inconvenience of Rental Cars
Many New Yorkers often rationalize not having a car by thinking it’s cheaper to rent one
whenever there’s a need to go on a trip outside the city. While this might be true
if you rarely leave the city, renting a car is not a viable option if you see yourself
leaving the city for a weekend more than once a month.
This is because renting a car in NYC is nothing short of a nightmare. Rental cars in the city
itself, and Manhattan in particular, are a rare commodity, which means that prices are
sky high. Figure at least $250 a day if you plan on picking-up a rental car in Manhattan,
not including the cost of insurance.
What’s worse is that there aren’t too many cars available in Manhattan anyway, so
if you don’t book that overpriced car rental at least a week in advance, you’re completely
out of luck, even if you’re willing to pay big money.
While it’s possible to pay less for the rental itself by picking up a car at JFK,
Newark or LaGuardia, this means that you’ll be on the hook for a costly Uber/Loft to and
from the airport. This instantly reduces any cost savings versus simply renting a car in
Manhattan in the first place. It also wastes time and creates additional logistical work.
Even if car rental rates in NYC were more reasonable, it wouldn’t be worth it to go
down this route if you did weekend or day trips outside NYC more than once a month.
Here’s why: renting a car in NYC is a miserable experience.
NYC isn’t known for its friendly staff and good customer service, and airport rental
car locations in particular represent the very worst of NYC: rude staff, lines, wait
times plus the laborious check-in process and annoying upsells (insurance, E-ZPass,
etc.) when you’re most likely in a hurry to get your car.
Simply put: a weekend getaway to Lake George or a visit to Philadelphia isn’t so relaxing
if you have to start your journey by speaking with a miserable rental car attendant at an
airport car rental venue.
In addition, most rental car companies charge obscene rates of up to $11 per gallon or more
if you forget to fill your tank before returning the call.
So in addition to being stressed and unhappy about coming back to NYC after your amazing
getaway, you’ll have the added stress of remembering to fill up the gas tank.
Tolls and Potholes
New York City’s roads are hazardous, plain and simple. If you’re driving in NYC, avoiding
potholes is the single most important objective aside from not hitting pedestrians, cyclists
or other vehicles. Some of the potholes on New York City streets are so deep and so dangerous
that driving over them at full speed can result in serious damage to your car or an accident.
If you buy a car, we suggest avoiding coupes, sports cars or anything that has less ground
clearance than a standard 4-door sedan.
An SUV is another option, however we don’t recommend this because SUV parking is considerably
more expensive, they have lower gas mileage, higher tolls and are considerably harder to
parallel park.
In addition to potholes, NYC is surrounded by a myriad of toll roads. The most egregious
tolls are for the Holland & Lincoln Tunnels, the George Washington, Bayonne and Goethals
Bridges and the Outerbridge Crossing, all of which have a $16 cash toll (or $13.75 using
E-ZPass during peak hours) when entering New York.
Although tolls are high when entering New York, they’re generally pretty inexpensive
on other roads. Moreover, you’re still responsible for the tolls when renting a car, so the cost
of tolls shouldn’t be the primary decision making factor when thinking about whether
or not to buy a car in NYC.
High Cost of Insurance and Deductibles
Auto insurance rates in New York City are considerably higher versus other parts of
the country. Basic coverage for an average car will exceed $100 a month, and the cost
can easily exceed $200/month if you buy a premium vehicle (Mercedes, BMW, etc.) or opt
for higher coverage limits and/or a lower deductible.
Even if you have insurance, having a car in NYC is still a headache because of the high
likelihood that someone or something will eventually ding, scuff or damage your car
when you’re parked.
You’ll inevitably have to pay your deductible to cover these repairs, or you can expect
to pay out of pocket for any small repairs over the course of ownership.
If you lease a car and don’t fix the damage, the cost of any such repairs will come out
of your pocket when you return the vehicle.
In addition to the cost of insurance, you’ll also need to pay for AAA or some other form
of roadside assistance to cover you for tows in the event your car breaks down. As of this
writing, AAA plans range from $4.50 to $11/month.
Cost of Garage Parking
Garage parking in NYC ranges from $200 to 700 month. The cost of a covered lot in Manhattan
closer to $500 to 700/month which is roughly the same monthly cost of leasing an entry
range BMW, Audi or Mercedes. If you plan on parking in Manhattan, beware of long wait
times during rush hour at busier/larger parking lots for the attendant to bring your car.
Garage parking prices are slightly less expensive in Brooklyn and Queens, at roughly $200 to
$300/month. Outdoor (uncovered) lots can be had for less, and it’s possible to find
certain condo, co-op and rental buildings with discounted parking rates for residents
(although many have long waitlists).
If you live in Brooklyn, Queens or the Bronx, it’s also possible to negotiate parking
with a homeowner in the neighborhood. There are many creative ways to save money on parking
in the outer Boroughs.
Traffic & Parking Tickets
Street parking in NYC is not for the faint of heart. It’s hard enough to find a parking
spot and navigate alternate side parking, let alone avoid being ticketed by any of the
thousands of NYPD Parking Enforcement personnel who roam the city 24/7 looking for offenders.
With COVID-19 having decimated New York City’s finances, we anticipate that the number of
traffic violations and parking tickets will surge over the coming years as the city looks
to raise additional revenue.
Mass Transit, Cycling and Ride Shares
The main argument against owning a car in NYC is that you easily get around the city
itself and travel to many nearby destinations outside of the five boroughs using a myriad
of public transit options including the Subway, LIRR, Metro North and Citibike. This is a
valid argument, and we fully agree that there is a very long list of places you can travel
for day and weekend trips using public transit alone.
That being said, public transit schedules can be inconvenient, and there’s also the
constant threat of delays plus general unreliability and the fact that tickets for the LIRR and
the Metro North aren’t even that cheap. If you’re trying to elevate your lifestyle
and weekend game, constantly taking trains isn’t going to make you feel like you’ve
conquered NYC and become liberated in the same way owning a car will.
There are also car sharing platforms such as Zip car which might make sense for day
trips, but don’t necessarily make sense for routine overnight trips away from the
city due to higher overnight rates.
We hope you enjoyed this video, and if you did, please like, subscribe and leave us a
comment. We’d greatly appreciate it. I’m Nick at Hauseit, and we’ll seen you on the
next video!