Residents forced to ditch cars because of weird rule

A new survey suggest that Australians are ditching their cars because of several reasons, but a very peculiar one is having a startling effect.

A car is often the second biggest investment a person makes but it appears that may not be the case for a growing number of people.

A new survey from car share service GoGet has shone the light on an increasing trend that should have car makers worried.

According to the company’s annual member survey, 65 per cent of the more than 5000 respondents sold their car after signing up to the service. GoGet currently has about 140,000 members in Australia.

These figures signal a storm may be on the horizon for car makers as private buyers ditch owning for sharing services.

GoGet car sharing vehicles parked in assigned spot at Surry Hills, Sydney.

GoGet’s transport planner, Josh Brydges, believes that one “little known rule” in the City of Sydney could be playing a big part in helping residents decide to ditch their cars.

The rule says that any resident in an apartment built after 1996 is ineligible for an on-street parking permit. However, car sharing services get guaranteed on-street parking spots.

“Cities are putting more people into the same area, and not adding much in the way of parking,” says Brydges.

“The offshoot is that people end up selling their car or not buying one, and those in high density areas are typically well-serviced by public transport.”

GoGet claims 40 per cent of residents in the inner-Sydney suburb of Chippendale are members.

Private sales of new cars are down almost 8 per cent so far this year.

Brydges also thinks cost of living pressures are also causing people to reassess car ownership.

“What we’re seeing is that as the cost of living increases despite wage stagnation, they’re preferencing on-demand access over private ownership,” says Brydges.

“Investments of thousands of dollars into an asset, particularly one that depreciates over time like a car does, are becoming increasingly hard to justify.

“It’s estimated owning a car can cost up to $6000 annually between rego, petrol, insurance and other expenses and everyone from singles to families are keen to avoid that cost where they can — let alone paying for a vehicle that depreciates in value the moment it hits the road.”

GoGet claims this isn’t just a concern for low and middle income earners, as more than a third of its members earn more than $100,000.

News.com.au has previously reported on how much you need to drive your own car to make it worth your while. That research showed drivers needed to use their vehicle almost daily to make it more affordable compared to car sharing or ride sharing services.

And this trend could be speeding up the decline in the new car market over the past 12 months. Private new car sales are down about 7.75 per cent through July this year compared to 2018.

GoGet is not the only option for those looking to ditch their own set of wheels.

Car sharing services such as Car Next Door allow users to rent private vehicles from neighbours for short or long term use. According to Car Next Door, the average user makes about $7000 a year renting out their car.

The more recent arrivals among car services, such as Carly and Carbar, enable users to drive a range of vehicles for a monthly fee.

Originally published as Residents forced to ditch cars because of weird rule