Do You Need to Own a Car at Home If You Live Part-Time in Mexico?
Do you need to own a car if you live in Mexico part-time?
Updated May 2022
Is owning a car necessary if you only live in the U.S. part-time?
When you decide to live in a foreign country six-months or more a year, you begin to rethink the whole idea of owning a car. Given that our cars stand idle 95% of the time to begin with, it often doesn’t make sense to own one as a part-time expat.
How much does owning a car cost you in the U.S.?
Do you think that you spend less than $500 a month owning a car? Think again. In surveys of a wide range of drivers, respondents said they spent an average of $345 per month on car expenses. But according to the AAA, drivers spend an average of $706 per month owning and operating a new car, more than double what the drivers thought they spent.
People keep their cars an average of six years. Owning a car conservatively costs between $7,000 and $11,000 a year to operate, assuming a standard car, a good driving record and no parking costs. According to the U.S. Department of Labor's Bureau of Labor Statistics, the average vehicle costs $9,576 per year to own and operate. According to Car and Driver, the average cost of a new car in 2022 was a mind-blowing $46,526!
With no financing, you might spend a little over $500 a month. But how many people pay cash for a $36,000 dollar car? With excellent credit, you may get an interest rate of under 3% for a 60-month loan (quite a commitment!). Without a down payment, you will pay another $2,700 over the lifetime of the car. If your credit is fair (620-659 points), your interest rate will jump up to 13.6% per year, or $13,894 in interest over the 60 months, a whopping $194 a month in interest!
Downtown parking fees for an evening in a big city can be outrageous, motivating even car owners in cities to use Uber. Some cities are doing all they can reduce congestion by discouraging people from driving their cars downtown and use public transport instead. To that end, they are building fewer parking garages. All this causes even those who own cars to take Uber or Lyft. It’s easy to understand how transportation costs can soar without your noticing it if you are throwing Uber rides of $10-15 a trip in along with the costs of owning a car.
Should you continue to own a car if you live in another country part-time?
Ultimately, whether you give up your car when you move to Mexico, like so many things in life, will likely be a matter of location, location, location. If you live in an urban area in the US, you have many transportation options, Zipcars, car-sharing, public transportation, and bikes.
If you have paid off your car and own a home (that hopefully, you are renting out while you are in Mexico), you might have a garage for storage while you’re gone. If you live in a smaller town and have little public or car-sharing options, no garage of your own and want to keep your car, maybe a family member or a trusted neighbor can keep an eye on your car while you are in Mexico (if they’re not too jealous of you and your new lifestyle).
How to find wheels when you need them in the U.S.
That being said, there have been times in the U.S. I wanted to drive. When I embarked on the part-time expat life, in addition to Uber and Lyft, I anticipated using ZipCars while in the US. For a monthly membership fee, you receive a card that enables you to use cars for about $9.00 an hour (a three-hour shopping day will run about $27).
The cute little cars are parked all over major downtown areas. You book one, pick it up and drop it off at that location. To unlock one of the cars, you tap your Zip card on the card reader on the rentals’ windshield. When you return it, you lock up with your card too. Between Uber, Lyft and Denver’s excellent light rail, I have rarely needed ZipCars but it’s nice to know they are there, only a block away from my apartment.
During one six-month stay in the US I decided to rent a car for an extended period. The first thing you should do if you’re going to rent a car more often is apply for a credit card that provides rental car insurance as a benefit. It’s insurance that can more than double the rate of a rental. Capital One has several such credit cards you can apply for, as does Chase Bank, Wells Fargo and of course American Express. The coverage may not be comprehensive. Check the details.
How to rent a car long term in the U.S.
According to Autoslash CEO Jonathan Weinberg, if you are renting for several months and using traditional car rental companies, you should rent for only up to a month at a time for the following reasons.
1. Many insurance policies whether through a personal auto policy or a credit card won’t cover a rental of more than 30 days in duration.
2. Many rental companies offer $50 off a monthly rental, so by renting a month at a time, you can take advantage of this discount each month. If you rent for say 2 months, the $50 coupon will only come off once.
3. By renting one month at a time, you can continue to shop for better rates for the next month while you have the current rental.
4. Many rental companies require you to go back to the renting location every 30 days anyway to sign a new contract. (posted on Quorum)
No car rental company can give you the cheapest rates out there all the time. While discount car rental companies may be cheaper most of the time, there are plenty of times they are not. I recently compared prices from Enterprise, for example, a company I’d grown to love because they have been cheap and there for me in the most isolated of burgs. I used them going from Snowshoe to Elkins, West Virginia every two weeks to go grocery shopping one winter. This time though, their rate was 50% more than all the others I checked.
The base per-day prices for a midsize car given by the major car rentals sites only varied by a few dollars. There were a few negatives and details to be on the look-out for, some of which would especially apply if you are a part-time expat renting for a few months.
Maintenance and deposits - Maintenance requirements based on mileage can be required, and if you don’t do it, you could be “blacklisted” from the major rental companies, who share the information. Dollar, for example, had a minimum deposit of $350 is required which was higher than others and their full coverage insurance was higher, to these costs are not standard among rental companies.
Some car rental companies, like Alamo and Fox Rental, only have airport pick-up and delivery. As a part-time expat rather than a vacation traveler, trips to the airport might be a hassle, plus having to pay airport fees attached to the invoice.
Membership in car rental clubs, like Hertz, Avis, and National often don’t save you money. Hertz multi-month, as you might expect, caters to the business class, who will pay more for membership benefits like no-waiting in line, expanded car selection and newer cars, probably not a priority as an expat whose quality of life is no longer measured by the ability to shave 15 minutes off a wait in line.
Fees matter, rock-bottom per day rates are often accompanied by an intriguing assortment of fees. The “Concession Recovery Fee” is an airport tax that the rental company is passing on to you (more accurately should be called “Fee for us being located near the airport”). You might also have an Airport Access fee, tourism fees and county business license taxes. Voters don’t mind visitors to their city funding their governments.
Travel sites like Orbitz, Expedia, Priceline and Hotwire have a car rental feature that you can use even when not booking a flight, another place to check for deals. If you have to buy insurance coverage, you might save a little money on collision insurance by booking online through one of these sites.
In doing my research, I went all the way through the rental process online to the point of being asked for my credit card. Only at the end would they mention negative aspects, such as that you have to invite them into your Facebook circles to get the special rate.
Non-traditional ways to rent a car
If you are going to be in the US for at least six months and plan well in advance, another option for getting a car is LeaseTrader or Swapalease where you take over someone else’s lease. I looked into this option before giving up my leased car to move to Mexico. I could never find a person to take over the lease on my SUV, but found the staff helpful and available. Perhaps your luck will be better if you are looking for a car rather than looking to get yours leased.
If you don’t mind an up close and personal element in your car rental, a number of peer-to-peer car-sharing services like Turo and Getaround have sprung up where you can rent a person’s private car for longer periods. The owner rents their car out through a website, meets you, gives up the keys and you drive off with their car. The company covers the car insurance. You may save a little money, and some unique cars are for rent. You need to be on Facebook to participate, as that is a big part of establishing your identity, as it is using AirB&B.
The problem with this kind of car sharing is the same reason I avoid borrowing friends’ cars. If someone hits me, even if it’s not my fault I would have the deliver the news that their car’s been damaged. Using a rental car agency, I only have to tell the employee behind the counter, the one with no vested interest (similar to the reason rock stars still stay in hotels.)
And the winner is…..
The best way to go for long term rentals is with aggregate sites, like BookingBuddy, Fare Finder, Autorental and Auto Slash. Just like Expedia compares rates among all the airlines to find you the best fare, these sites compare many sites for prices. (although in truth, a few car rental conglomerates own all of them). You can find amazing offers on these sites. I found a couple of mid-sized cars for under $500 a month, fees included! My favorite of these is Auto Slash, which also has a good blog and email alerts.
Many services today are making part-time expat life possible like never before. These on-line alternatives to car ownership when you’re back home practically shout out to you to take advantage of them and create a new life, one fluid enough to change on a dime.
Related link:
I am surprised how many people my age have never used Uber or Lyft. As a part-time expat, the car sharing service is likely to be part or your life in one end of the journey or the other. [blog]
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About the author:
Kerry Baker has written several books. If Only I Had a Place is a guide to renting in Mexico, the things that realtors do not want you to know about renting in Mexico, the special opportunities you have as an expat and the pitfalls of renting in a foreign country with fewer legal protections. Her third book is The Mexico Solution: Saving your money, sanity, and quality of life through part-time life in Mexico.
Most recently she released The Lazy Expat: Healthy Recipes That Translate in Mexico, a cookbook for travelers, snowbirds and expats seeking to maintain a healthy diet in Mexico (spoiler: You must cook.)