Here’s one way to get around the high cost (and hassle) of owning a car…
Don’t.
Bizarrely, GM – a company that makes cars – thinks it’s time to stop selling cars.
Rent them to people instead. By the hour.
It is investing in this idea, heavily.
The automaker reportedly spent $500 million to buy a controlling stake in Lyft, which is a ride-sharing company like Uber.
GM also just announced the ramping up of its own in-house ride-sharing service, an app called Maven.  Â
It lets you call up a Chevy Spark, say, for as little as $6 per hour. A Cadillac might cost more. But it’s cheaper than buying – and much less hassle.
GM owns the car, so you don’t have to deal with property taxes or insurance or maintenance. Never have to wash it, or worry about losing your keys. They’re not your keys, after all.
GM even pays for the gas.
It’s all folded into the hourly cost of the rental.
This is the wave of the future, apparently.
It’s also the death-keen of the car business …Â which deserves it.
For decades, the car companies have not only not fought the government’s endless cost-adding mandates – which have made cars increasingly unaffordable and unappealing, especially to Millennials (something like a fourth of them don’t even have a driver’s license) they have embraced them and even anticipated them.
Rather than spend some money on advertising and PR to explain to people that the reason the average transaction price of a new car is now well over $30,000 (or about two-thirds the average family’s yearly income) and headed much higher is chiefly because of the costs of placating the federal government’s cost-no-object mandates, the car industry amens the mandates.
Not one negative word, for instance, about the 54.5 MPG fuel economy fatwa that goes into effect a mere nine years from now. A fatwa that not a single current-year car meets, not even hybrids. And which will probably up the cost of cars by another 20 percent. Either to pay for the necessary technology – or to pay the “gas guzzler” fines that will be appended to the price of any car that doesn’t average 54.5 MPG.
No objection to Demolition Man-esque outside-the-car air bag fatuity. That every car be fitted with closed-circuit back-up cameras (and soon, cameras in lieu of rearview and outside mirrors, too). Instead, the execs and PR people drop to their knees to give a snarlin’ gnarlin’ to whatever idiocy the government proposes.
But cost is an object for most people and since the car companies (unlike the Insurance mafia) have’t yet figured out a way to force people to buy what they’re selling, many simply aren’t buying them. Especially the Millenials, who are more broke than most of us, having entered the work force when there wasn’t much work available. And unlike their Gen X and older antecedents, Millennials don’t have the affection for cars their older brothers and parents and grandparents have.
Ask them. Cars are just expensive appliances to most of them;Â necessary perhaps – but a hassle. And now there’s Uber and Lyft and (soon) Maven. Which makes buying one not necessary. And much less hassle.
The hilarious thing is the car business is putting itself out of business. Perhaps they have not heard about free milk and cows?
Has anyone done the math?
A new Chevy Spark – the one you’ll be able to get for $6 an hour via the Maven app – costs about $13k if you wanted to buy it. If you took out a five-year loan, that would be about $160/month, assuming a zero interest loan.
This is pure profit for GM, keep in mind. Because you pay for necessary maintenance, such as brakes tires, oil and – of course – fuel. You also pay to insure the car, and the property taxes (if applicable). And once the car’s out of warranty, GM – or the GM dealer – makes more money, via service and repair work.
If the air bags or the back-up camera or any other such goes kaput, it’s on you to fix it.
With Maven, you pay none of these costs. GM does. All you pay is the hourly rental. How many rental-hours will it take to make up the cost of manufacturing the car and maybe make a buck?
Keeping in mind that it’s not just the cost of the car, it’s the cost of insuring the car, fueling it, maintaining it. If it’s being passed around all day like a party girl at a bachelor party, expect the R&R costs to be … high.
How does GM expect to make money this way?
Maybe the model is Tesla – which makes millions by selling cars at a loss, recouping the cash in other ways. GM tried this model itself with the Chevy Volt electric car, which it leased (rented) for $200 a month for two years. The MSRP – if you wanted to buy one is – about $34,000.
Do the math.
But, absent either a restoration of sanity – of cost-benefit analysis, minimally – or a Trumpian enrichment of the car-buying public such that it becomes economically palatable to pay thirty-something-grand for an air bag-laden, back up camera’d, automatic braking, 54.5 MPG car on a fifty-thousand-something annual income, this is the wave of the future.
It’s the only way people will be able to afford to drive.
By renting, an hour at a time.
Maybe that’s what’s wanted, ultimately. Us owning nothing. Just payment to payment, paycheck to paycheck…
The company town, coming to your town soon.
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“Keeping in mind that it’s not just the cost of the car, it’s the cost of insuring the car, fueling it, maintaining it. If it’s being passed around all day like a party girl at a bachelor party, expect the R&R costs to be … high.
How does GM expect to make money this way?”
I 100% agree with you Eric; but I would add the ‘tragedy of the commons’ into this mix. Many people have no respect for the property of others.
I am nearly positive that all guys have gone into public restrooms and have had to wipe the piss off of the seat of the toilet before using it. I have heard that women experience the same thing because some women ‘hover’ over a commode.
We have probably all seen gallon jugs of urine left by the small percentage of truck drivers that do not respect other peoples property. That ‘temptation’ is unique to truck drivers because trucks do not have bathrooms in the sleeper, it is an inconvenient long walk to the truck stop bathroom for an undressed sleeping person that wakes up having to pee, and that nobody wants to be seen carrying a jug of his urine to the urinal inside the truck stop to empty it. I myself discretely empty the jug onto a grassy area, which is a natural place for it, because the thought of leaving jugs lying around for others to pick up is immoral in my view because it violates the golden rule.
Sadly, many people lack such considerations. That same truck driver would leave jugs of urine in the trunks or on the back seat floorboards of the cars he has rented. If extra charges to his bill are likely; then he will try to hide it under a seat or in the engine compartment or something. Must every driver spend 20 minutes inspecting the car before renting it every time? Will dealers do the proper inspections even when they become swamped with them?
Then there is the situation of certain people hot-rodding those cars and potentially damaging the engine. If it knocks, then the person will buy a can of STP and pour it into the engine crankcase in the hopes of hiding the damage he has caused.
Continuation of this ‘plan’ does not bode well!
eric, and now the salt flats in Utah, under management of BLM, are in dire straits so to speak. Of course it’s a corporate fleecing via federal “ownership”. We don’t own shit and this is a good example of even state’s not owning property. it as happenstance but who can stop it? http://wc4.net/t?r=4035&c=763&l=6&ctl=47F7:A5E4265A1CA07485D018988222C79B3C762DFB16DFBF1C68&
The Political Terrorists tell their tax cattle that battery cars will cost the same as gas cars in 10 years…..What the terrorists don’t say is that the price of a gas car will be going much higher due to their political terrorism…The price of a battery car stays the same high price.
When I lived in NY I really liked ZipCar. 24×7 I could rent a car. They were fun cars like BMWs and Minis that I would never own. I even rented a Prius just to see how much I would hate it (answer: a lot). The ZipCar model also made more economic sense, if I were going on a long trip I could rent a BMW. If I needed more space I could rent a van. I could rent for 1hr up to 3 days. So I can see ZipCar as the future especially if parking is an issue.
The downside was Thanksgiving they were out of cars a lot of the time. Once I ended up renting a Buick from Enterprise which was also a fun car to drive.
I say the car companies went along with the govt because they knew they would be bailed down the road. look how the govt tried to destroy Toyota and now volkswagon. it is industrial sabotage. we are led to believe that American junk diesels are not cheating. so going along with all the govt mandates has paid off big time for them
It’s funny that GM builds grossly overpriced vehicles, and then decides the prospective customers are the problem. More idiocy from GM is their predictable ‘solution.’
GM is the problem, and government isn’t helping. American car manufacturers make things an ever shrinking number of people want to own. Rather that telling us we want to buy stuff we obviously will not purchase, maybe they should look at what people actually want rather than what GM has decided we must buy?
If I could get one here, I’d buy a Piaggio Porter diesel pickup. Tomorrow. It’s not $40,000 – I’m never buying a $40,000 pickup. Never.
Hi AC,
Well-said.
I don’t object to $40,000 pick-ups (and so on) per se. What I object to is that’s all there are. Why not – on the lower end – a no-frills truck that costs $15,000 (or even $10,000)?
If it didn’t have to have air bags, a direct-injected engine (and cylinder deactivation, etc.) and all the other cost-adders mandated by the government but paid for by you and I – it would be possible.
eric, I wish I could find a $40,000 pickup. A while back I priced some GMC and Chevy’s. 7 year old pickups still going for $45,000. I could get a Dodge cheap and that’s what I’d have. I could get a Ford cheap-er but then I can’t get uber-priced Ford parts cheap like I can GM and to be honest, I don’t like the way Ford’s handle, the ass-end all jacked up and the 4WD’s brand new are so rough and jittery they’ll hurt your back and their diesels, ah hell, the entire engine line up leaves me wishing for a GM.
I heard an ad on the radio for a new Chevy pickup last week with $13,000 off the MSRP. From what I’ve built on-line, that would only leave me with a $62,000 payoff. But, I found a place in a town about 60 miles away that’s stock-piling 90’s model GM’s. I gotta stop and look. Nothing but whistles and bells and huge power on the new ones the 90’s didn’t have and they’re powerful enough for me. I can buy several thousand gallons of fuel for the “lesser power”.
My thoughts exactly, Eric. It seems that one can’t find a pick-up these days (much less an SUV or full-sized car) with just plain old vinyl seats and a rubber mat on the floor. Oh, no, if you want to drive a full-sized vehicle, especially a truck, you have to have carpeted floors and heated leather seats and the whole nine-yards; things which I don’t want or need, and which would only be ruined (like carpet) if the vehicle is owned/used by anyone other than some city-dweller whose feet never leave the pavement. It seems that my choice of vehicles is limited to ones from the 70’s and 80’s now. (Some from the 90’s may have fit the bill, but their plastic and cardboard interiors and other junk components ensure that they don’t endure like the older ones do -ones which had real metal dashboards and which weren’t laden with computers and sensors.)
I agree, yet I kind of hope the trend continues to its logical denoument. I just put an 89 ranger extended cab together. You cannot buy a truck like this today. Just the right size, cheap to run and maintain. I got the truck cheap knowing it needed a junkyard engine due to the previous owner’s overheating and neglect. It turned out I also had to put a tranny in it, also due to abuse/neglect. But- I have less than a grand into it, so maybe 4 grand counting my time. When it warms up enough here for a shot of paint, that will happen and then I’ll have 1500 into it. And had I paid 20-50k for a new one, I’d have had to earn 50-100k just for that due to big bro’s take.
I do believe that there will remain a solid market for this kind of vehicle, and renumerative value for those of us with the skills and mindset. There will be a growing rebuilder/restorer market. Not for the over the top rich boy’s toys, but for solid vehicle value.
The gotchas are government misdemeanors and the fact that most potential customers don’t have any money. Eventually, though, even the densest will figure out that 8 years of $1000/month payments is just too big a hit when you can get what you need and like better for 5k up front.
“Cars are just expensive appliances to most of them; necessary perhaps – but a hassle. ”
I’m an older Gen X myself (born when LBJ was still in office) &I agree with the above.
Right now I own 4 vehicles, 1997 to 2007 models. With a 16 year old driver in the household auto insurance alone is approaching $5000/year, not counting property taxes, fuel, maintenance/repair.
Here in suburbia I’m sure we could get along just fine with one or two vehicles & Uber/Lyft/etc.
You’re thinking that the rental cars are going to be similar to what you get at the airport, a mostly stock car. The power of a manufacturer getting into the game is that they can install things like city-bus seating and vomit proof flooring. Heck you might not even be able to adjust the HVAC. Fairly certain you’ll have giant logos and other obnoxious “wraps” all over the outside, and have to deal with advertising plastered all over the interior. Maybe even set aside space for a vending machine or honor bar.
It will have asset tracking and governors on the throttle, cooked in at the factory so much more difficult to defeat. In fact, just make it shut down and refuse to travel down dirt roads (or go into “bad” neighborhoods). If it detects too much of a load or the NWS issues a storm watch, again shut it down. Have to protect the asset you know.
For sure it will have greatly simplified controls, or be self-driving. Tiny baby-buggy wheels and no ground clearance. 3 cyl engine (and shut two down when cruising). The hood could be secured with a proprietary key system so that only the rental distribution center (they really need to bypass the dealer network for this to work) can do any maintenance.
I love it! Sign me up!
It would be a while before this could happen in my opinion. There is no way they’re going to ship a car to me to use. If they use the current new car dealers as the rental centers, maybe. But there are 60000 people in my city. Each new car lot only holds 200-400 cars. Only 9 dealerships in this city.
I think they’ll be like cell phones. 2-year contracts. If they’re not re-leased as a cheaper “refurbished” model, they’ll be recycled for the next cycle.
This is just another move towards having us all owning nothing.
Ownership means that at some point you can stop paying. You own it. It’s paid off. Renting means paying until you die. They are trying to get us to rent everything. Everything will be owned by the corporations and government. The moment we stop paying *poof* it’s gone. Always living hand-to-mouth, pay-check-to-pay-check. Dependence on the system. On the collective. On the corporate-government collective run by who George Carlin called our “owners”. They own us and we own nothing.
Piece by piece what was once owned becomes rented one way or another. They have attacked savers harder and harder. Why? Because it means independence from the hand-to-mouth system they want.
Nobody seems to notice and nobody seems to care.
Brent, your comments are gold. Always short, informative, thought-provoking. Perfect for convincing the masses, since some say libertarians will never win because they can’t get their complex ideas out simply.
I had to add this one to my “quotes I want to keep” document, I have quite a collection of EPAutos comments. 😉
“This is just another move towards having us all owning nothing.”
As I believe you (someone, anyway) have mentioned before, this is all part of the ‘company store’ storyline.
“Whaata you get? Another day older and deeper in debt.”
Yep, it’s just the nation’s store.
Hat tip, Brent… that was spot on. I added a line to the article.
Owe you a beer!
You’re welcome, and thanks Brandonjin.
“Ownership means that at some point you can stop paying. You own it. It’s paid off.”
This proves that you don’t own your house. Even if the mortgage is paid, you must still pay taxes every year. And/or HOA fees if you were stupid enough to buy into 1 of them.
Property tax had to be structured specifically to remove ownership from the people. It is also very corrupt and allows insiders to pay much less than outsiders for the same “services”.
Hi Brent,
Yup.
I’ve “owned” my house since 2004 yet have to pay thousands every year in order to maintain possession of it.
No matter how modest/humble a home it may be, you will never pay it off. You will always “owe” a payment – one that can be increased arbitrarily at any time.
This means you must either have accrued a large savings from which to draw the money for as long as you live – or you must be in some way employed, so that you earn the money for them to take. In other words, we are forced to work so that the proceeds of our work may be taken away from us, in order to be allowed to live.
There is a word for this.
Slavery.
Too true Eric, my mortgage was paid off many years ago yet the “rent” extracted via the property tax must be paid or I’ll find myself joining the ranks of the homeless. Meanwhile GE, the world’s biggest welfare queen, just worked out a deal to move their main office to Boston for many years of NOT paying those same (much higher) taxes. I guess the city figures they can leech off the extra employees that will have to move here if they want to keep their jobs, these crony capitalists being “job creators” and all. Except how many actual jobs are created vs. just being moved from city A to city B?
Makes me want to barf; the only way to escape these parasites would be to actually be a homeless person, which is probably in all our futures once they’re done sucking us dry.
Yep. We live in a slave/serf system with nicer cages but we must go out and produce or else. But people can’t see it. The ancient systems are almost all in place but so few see it. We are ‘free’? Free to do what? To work for the system of course. To send the value of our labor up the pyramid. Free range livestock and the range is getting smaller all the time.
Very true Brent. People living in the developed world are in a high tech labor camp, and most don’t know it, having become habituated to staying on the treadmill and following orders. Their free time is taken up by cheering on their favorite professional athletes while under the influence of approved intoxicants, leaving no room to think about how they are being used by the ruling class.
Morning, Escher!
When I go to the gym or hear men talking, it’s almost always about fuhhhhhhhhhhhhhhtttttttball. I retreat into the 18th century via my books, imagining what it was like to live in a world in which men discussed ideas….
“while under the influence of approved intoxicants” and pot is the fly in the ointment. Most will stay right at the level of toxicity with alcohol……due simply to being swatted by it so many times they know when a bit more is enough.
OTOH, pot might leave you a bit muggle-headed but basically good to go after a few hours sleep. In fact, a few hits might start you to think outside the “proscribed box” of TPTB…..including the alcohol version of the state, their federal organizations, including the three tier system.
The last thing they want to hear is how nice you feel. A statement that goes something like “have you tried the Blueberry, very therapeutic with a blueberry taste, sweet” is akin to getting your door caved in but if it goes more like, “that blueberry vodka damn near killed us last night after Roger and Alan started the big fight” then that’s ok, esp. if the cops benefited in any way.
eric, I’ve already noticed the displaced moving across Tx. on their bikes and trikes. I can guarantee it’s slow going in the wind we have and there are no fatties. If we can’t afford the taxes on the farm(they sent us a letter saying they wanted to inspect our buildings and whatnot)I’d consider sending the old lady to her sisters. Don’t know what we’d do with the cats. Me and CJ could just stay on the road with no listed possessions. I guess it’s the locked gate that keeps them at bay but the possibility of rank force showing up certainly isn’t out of the question…..BTDT.
I have seven cats (not including the three currently with the wife – we’re still separated; hopefully not for too much longer)… it’ll be tight in that van down by the river… but I won’t turn them out. They’re my best buddies.
Yep, it’s a tough thing to think about so I don’t dwell on it. They all want to sleep on me and one rides on my shoulders every chance she gets.
Then there’s my idiot cat. Despite hearing the phone ring 20 or 30 times a day, the last time she was on my lap when the phone jingled she was so startled she sprinted off. Left me bleeding and scratched on both legs.
We can’t keep track of how many cats we have, because they are supposed to live in the barn, but the neighbor keeps feeling sorry for them and lures them over there with canned catfood. Then we may not see them for a few weeks.
We did just get a 3rd dog, all English Shepherds. 1st one, female, is just coming 3. Then we kept a female pup from the litter she had in October. Now we have a male. A lady we never met had a breeding pair she needed to ‘rehome’ because the neighbor was threatening to shoot them. Her autistic granddaughter had let them loose. The female went back to her breeder, and she recommended us as a possibility for the male. She did ask us to pay $50 for her gas to bring ‘Blue’ to us.
Parasites rule!
This is what the Republican War of Northern Aggression was all about. Slavery for White Americans.
I was born in 87…and I will not buy a new car. Those dreams died right after high school in 2005. So here I am, still driving around in a 30 year old truck I’ve had for almost 7 years and 50k miles, and I am happy with that. An 06 tj wrangler is as new as I will go, but ideally pre 1995 is what I will own
anchar, early 90’s GM pickups are not only super-reliable and cheap to operate but hold their value. Get one now before everybody catches on. It’s already happening. I have found a used car dealer that’s stockpiling them. I might drop by tomorrow and see what he has. I need a cheap gasoline model so I can rebuild my diesel. New pins and bushings in the doors and new door gaskets and their just as quiet as ever. You’ll want to get one from one of the dry states in the SW though. I don’t know any vehicle that can endure a life of salt.
I hear you…mine is an 86 diesel blazer. Rust is an issue, I use lots of oil and grease on the exterior rust holes to slow the growth, but it needs new metal welded in. I also wash salt off every 3-4 days when it is salty wet on the road. The early 90s drive train is the same as the 80s, but I prefer solid axles
Anchar, having owned both types, I’ve had NO problems with IFS. But worn bearings will cost you brakes and most expensive, locking hubs. And pickups with auto-locking hubs can be replaced with manual versions but unless I has some severe electrical problems I’d stay with the auto-lockers. I’ve had need to be in 4WD with the hubs locked “right then”. It can be the difference of being stuck or not or the difference of getting caught or not. It’s nice to not have to get out and have water and mud come over your boot tops to lock one in also.
One of the nice things about good 4WD is the ability to lose cops. If they get your license plate, you can say you had no idea they were there and unless they think they have a big payday at your expense, they won’t pursue it via warrant. Experience has taught me this.
At one time, not being able to catch you was a source of embarrassment for cops they didn’t wish to advertise. I used to drive home from college with open pipes, fire lighting up the underside of the car. I’d slightly retard the timing so I could keep it nailed and not have it get too warm cylinder wise. One afternoon doing between 120-130 I passed a warmed up Nova. He saw me coming up on him so he downshifted and the race was on. These were the good old days in that respect. I used the high speed gears in my car to dust him but he was a never say die guy so we’re both all out and meet a DPS going the other way. Of course he turned around and gave chase and we both matted our cars and left him sucking Chevy in that behemoth Fury. This is the only time I know of where one called in a roadblock. Unknown to me, this guy was turning onto the same road I was taking. I’d been in my home town for quite a while when this guy pulls into the station I was fueling up and bs’ing with the locals. He got out and was sorta pissed, told me he got caught at the road block and got lots of tickets and they wanted to know where the other car was. We’d never seen one another before and he told them so. It gave truth to the old saying you don’t have to be the fastest in the jungle, just faster than the slower….and a great deal faster than the cops. Who says you can’t outrun a radio? I may not have been faster than light but faster than the response is good enough.
from what I have seen all pickups from the 90’s had bad transmissions. they were switching to computer controlled trannys and were trying to adapt the old one to the computers a total disaster they were the worst all brand chevy ford and dodge. I remember a dodge dealer here the first snowstorm there were 11 truck new with plows and blown trannys
Strange, I recall 4L60E’s as being bullet-proof. Dodge used the New Venture Gear 4500 just like GM did in their manual HD applications with no problems.
GM and DOdge did that for too many years.. took a basic stock 3 spd OD with lockup Torque Convertor and computerised it…. not strong. I’ve been into both of them. Ford had a great box with their E4OD, but blew it on the planetary gear sets, making then a three pinion set with aluminium shells… the slightly too small splined output shaft would strip in the soft metal shell… usually at about 150 to 170 K if the truck was not worked hard., but more line 100-120K if you worked it at all. When rebulid dime came, the trick was to replace all three with a six pinion steel shelled planetary gearset, which used a slightly larger ourput shaft and deeper splines. Ford finally smelled the coffee in 97 or 98, switched to the steel shell six pinion sets, and those were bulletproof. I’ve got close to a third of a million miles on mine, original stock never touched, and I have worked that thing HARD…. towing 16K lbs, total gross combination weights over 26K, on long highway trips….
I’ve heard the ZF five speed manial gearboxes are veyr string as well, as long as you don’t slam shift, or dummp the clutch a lot. The aliminium gear casing doesn’t like harsh shocks, I’m told.
I believe Dodge went to a completel different autobox in about 2000, which seems to have a good reputation for holding up. that reqorked 727 put behind the torquey Cummins did NOT hold up. I think those were about 2000 and back. Once GM went with the Allison trans for their sluchbox, they fixed their problems, too.
Strange how the Big Guys have to turn out a problem unit, work it for years, let the aftermarket “fix” their fsilings, then adapt their ideas. Eventually they figured out the bad rap they justifiably got for their short term thinking forced them to change.
My biggest beef with Dodge are their electrical systems. Work fine short term, but as they years pile on they begin to break down. Too flimsy, not well designed. No issues yet with my Ford at 300+K
I’ve had good luck with a properly built 2004R. This box has a deep overdrive and no computer. All it needs is a 12V power hook-up for the lock-up converter. That’s it.