Shark Tank star Kevin O’Leary advises consumers not to purchase cars, according to CNBC.
An Overview of O’Leary’s Recommendation
The venture capitalist and Shark Tank star warns consumers that cars are fraught with depreciation and overall financial loss.
O’Leary first explained the pitfalls of car ownership:
“Cars cost a fortune in maintenance and insurance and just the amortization. [This] means as they go down in value, you’re losing money. Let’s say I pay $25,000 for it. Two years later, it might be worth only $12,000.”
Instead, the Shark Tank star urged consumers to look into public transportation or rideshare services such as Lyft and Uber:
“I use my phone to call Uber or Lyft and they take me around the city, I save a fortune. I feel good about it and I hate cars.”
O’Leary furthermore noted the rideshare discounts which are available for users of the service:
“Even if you use a car every day to get to work, it’s still cheaper to use a shared ride service. You can choose the level of luxury you want. You can share the ride with somebody else. I know people that go miles for only eight bucks. They’re taking advantage of a system that’s actually democratizing the cost transportation. Why aren’t you?”
Rideshare vs. Car Ownership
An in-depth analysis backs up the assertions provided by Kevin O’Leary. According to Nerd Wallet, taking an Uber ride is generally less expensive than driving yourself and owning a car. Auto insurance, gas, and parking fees are some of the additional costs associated with driving and owning a car.
Ultimately, whether or not rideshare or car ownership is more expensive largely depends upon one’s place of residence (amongst other factors). Nerd Wallet discovered that in eight out of 20 U.S. metro areas, Uber is the less expensive option. In the San Francisco metro area, consumers can save up to $83 per week by commuting via Uber. However, that dollar amount increases by $52 in the Phoenix metro area.
Which Option is Best for You?
At the end of the day, each individual will have to decide whether or not commute via rideshare or car ownership is best for them. Lifestyle choices and other factors will inevitably play a role in this decision.