The Benefits of Carpooling – Save Money!

benefits of carpooling

Don’t worry. We were at a stoplight!

Are you driving to work by yourself? There are certainly some inherent advantages of doing that. You get there when you want. You can run errands on the way home. You can blast “What does the Fox Say” and sing along at the top of your lungs – but please, for the love of God, don’t! What you probably aren’t factoring in though is the money it is costing you. Every day. And not just chump change either. Did you know that the average 2 person household spends over $9k a year on transportation costs?!

Chances are your vehicle is the second most expensive thing in your life after your mortgage (unless you have a Great Dane like me:). And each mile you drive isn’t just burning fuel – it’s bringing you that much closer to your next oil change and to your next major repair. Every mile that you carpool will save you real money by avoiding those long term expenses and even cutting those monthly costs associated with commuting. Trust me, there are more expenses that we incur than we realize by driving our four-wheeled boxes to and fro every day.

So what are these extraneous costs you’re dealing with besides gas?

car costsWell there’s insurance, maintenance, depreciation, tires, financing, taxes, etc. It all adds up pretty quickly.

No wonder the IRS reimbursement is 56 cents a mile! Depending on the type of car that you drive this might be close to what you spend per mile. If you drive a car with over 200,000 miles like I do your costs are certainly less than that. No matter what boat you are in though it is worth looking into carpooling. Even though I have incredibly low monthly expenses on my car, even cutting them by a little bit really helps out my bottom line.

So I turned to carpooling. My co-worker Kim moved just a couple of miles away from me a few months back. And it just dawned on us a couple of weeks ago to give that crazy carpooling thing a try. It’s going swimmingly thus far. Amongst all of those decreased financial risks we’ve also enjoyed not sitting in Atlanta traffic behind the wheel every day! We get a nice little respite in the passenger’s seat half the time. We’ve also found some cool new podcasts to listen to (Welcome to Night Vale and The Moth)!

There are other potentially huge benefits to carpooling!

Free money. My state offers straight up cash if you’ll start carpooling and document it. For the first three months I can earn $100 just for carpooling. And after that there are chances to win gift cards to local gas stations. That’s pretty sweet. Check to see if your state offers a similar program.

Getting rid of a car? I know this won’t apply to everyone. But once I’ve gotten a little further down the carpooling road my wife and I are going to have a serious discussion about becoming a one car family. She works from home and we live in a pretty walkable neighborhood. We might be able to cut our transportation costs seriously in half if we are able to cut one vehicle out of our of our lives entirely. We’ll see what happens.

Get to work faster. If you are often stuck in traffic on the way to work carpooling can actually help with that! It certainly helps with your stress level if you are in the passenger seat, but, you might also be eligible to jump into an HOV lane. That can shave some serious minutes off of your daily commute.

Lower your car insurance rates. Many insurers are testing out new programs that could significantly lower your rates if you drive less. Progressive’s Snapshot program is probably the most well known. They’ll give you discounts for driving less, not braking hard, and for not driving late at night. If you are carpooling and on one of these plans you are much more likely to lower your monthly insurance premiums by maximizing that driving less part! Check with your insurer to see if they offer a program like this.

So you see, carpooling has some major benefits! You’ll be spending less every week on gas, every month on insurance, and every year on taxes. Maybe it’s time for you to ask around at work to see if you can form your own little carpooling committee. The more the merrier (because that’s less time you spend driving).

For those of you that still do the old school thing like me and drive to work every day, would you consider carpooling? 

[photo courtesy of GeekStats]

13 Comment responses

  1. Avatar
    January 23, 2014

    Carpooling is a great way to trim automobile expenses. You will spend less money on gas and drive less too. The article makes an excellent point that certain insurance companies will lower your insurance rates substantially if you drive less. Carpooling is an easy way to drive less and potentially lower your rates. As a bonus, the more people carpooling, the less cars there will be on the road and the faster you will get to work!
    Leslie Tayne recently posted…How to Maximize Minimum Wage IncreasesMy Profile

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  2. Avatar
    January 23, 2014

    Great tips joel – I dont carpool to work (I walk) but I’ve been trying to get my wife to do it for quite a while. A few of her co-workers live in our area.
    Jeff recently posted…Baby UpdateMy Profile

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  3. Avatar
    January 23, 2014

    A great point, Joel. With lots of manufacturers touting their high fuel efficiency and with lots of people shopping for them, is easy to forget that you effectively double your MPG by carrying a second person with you.
    Debt BLAG recently posted…How I’ll save $600 by switching from Verizon to T-mobile; or How I left a T-mobile store with MORE money than I came in with without wearing a ski mask :) My Profile

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  4. Avatar
    January 23, 2014

    Congratulations! As someone who lived in Atlanta and visits there frequently, I wish MORE people would carpool, it would solve a number of problems.
    Shannon @ Financially Blonde recently posted…Financial Fitness Series – Life InsuranceMy Profile

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  5. Avatar
    January 28, 2014

    After running the numbers, we realized we could save $300-$400 a MONTH on transportation expenses by ditching the car. So that’s what we are working on. I work from home and the public transportation rocks here, so it is really not necessary to drive.
    Erin @ Gen Y Finances recently posted…What You Can Cut Out Of Your Budget Part 2My Profile

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    • Avatar
      February 01, 2014

      I wish our public transit was better in Atlanta! That’s why carpooling (and hopefully biking soon) seemed like the best choice for me. Ditching a car can certainly save you some mad dough. And I’m hoping that in the next year or two we can figure out a way to ditch one vehicle all-together.
      JoelLarsgaard recently posted…Video: The Hijacked American DreamMy Profile

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  6. Avatar
    February 01, 2014

    I’ve been carpooling with my fiance for a few months now, and a benefit occurred to us during the recent Snowjam, the passenger is a person to navigate safely and reduce stress/distractions for the driver. We commute 15-20 miles each way It’s better to have that person tell you it’s okay to just pull over. They can check a map and come up with alternatives, text messages to family for you as you drive, plus a spare phone in emergencies.

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