Why I Cancelled My Car Insurance

Three years ago, when I moved into my apartment, I cancelled my car insurance and parked my car in my mom’s underground garage. I had just changed roles at work, and instead of being on the road constantly, I was back in the office full time. Pre-pandemic I was commuting to the office daily downtown. The bus is right out front of my apartment, and door-to-door was 30 minutes. I kept my insurance on for a few months, but I quickly realized it wasn’t worth it.  

Parking downtown Vancouver is about $20 per day for many underground parkades nearby, and $30 at my office. So, taking transit was necessary. At this point, I was basically only using the car to go pick up groceries on the weekends and maybe zip across town to see my dad for dinner once a week or heading down to the beach for a walk.

My apartment building was built in 1952, and there are not enough parking stalls for each unit. Therefore, I was also parking my car on the street and having to move it every few days, which was a hassle for a vehicle I wasn’t using.

Doing the math, I realized the car was costing me about $12/day ($360) with insurance and gas. This accounted for 2 tanks of gas per month and insurance, so no long road trips or car maintenance factored in (B.C. has high car insurance rates compared to a lot of other places). And with gas prices at $2/L now I’m sure it would be a lot more today.

Looking at the cost annually, $360/month + some required maintenance, I was looking at close to $5k a year to essentially get groceries. It made way more sense to just take an Uber or an Evo to run any errands if I needed to. I was paying for a bus pass anyway since parking downtown was so expensive. And once the pandemic hit, I was working at home full-time, so I saved even more on transit.

I still have my car, and I may decide to put the insurance back on in the future, but so far, I haven’t needed to. That $5k a year of not having the car has allowed me to put $15k into savings which I plan to use to renovate my apartment in a year of two. I bought my car used and don’t owe anything on it, but the cost of having a vehicle is even higher if you are leasing, which can add up to be a significant monthly cost.

Not having a car is not as convenient, but the financial benefits of being able divert that cost toward something else that brings you way more joy (traveling, savings, paying off debt, or in my case a renovation) is so worth the inconvenience of taking more transit or occasionally using car sharing or a taxi service.

If you live in an urban area and can go without a vehicle, there are some major benefits. Or if you have a family, maybe looking at only have one vehicle instead of two.  So often the financial decision is also the better sustainable decision. Taking transit and using ride sharing is so much more cost effective and big reduction in emissions.

I strongly believe that the future of cities will involve more and more public transit infrastructure, making transit more convenient than driving through rush hour.