The first item of household expenditure for review is transportation. This entry discusses the decision to rely on public transport rather than to own a car
For most households transportation is a major expense, primarily because of the cost of owning and maintaining one or more cars. In Hong Kong it is even more so because of the exhorbitant first registration tax on motor vehicles and, also, the cost of renting or buying a parking space (most apartments do not come with a parking space).
The first registration tax is on a progressive scale from 35-100% of the cost of the vehicle. A carparking space in a middle class housing estate could be about HK$3,000 per month. Parking at work is even more and the hourly rates for casual parking vary depending on where you wish to park but can add up quite quickly. Insurance, maintinance, petrol and the other costs need to be factored in. Lastly there is the opportunity cost on the purchase price which could be invested elsewhere.
The cost of renting a car parking space in our development alone would equal about 80% of the cost of using taxis for all transportation needs. If parking at the point of destination is factored in then parking cost alone would comfortably exceed the cost of using taxis at all times (even more if we use buses). Not owning a car is one of the easiest financial decisions to make.
There are some non-financial factors:
1.convenience: actually this favours using taxis in almost all circumstances;
2.child safety: taxies do not come with child safety seats. This is an issue for us and the only factor that favours buying a car (although offset by the fact that taxi drivers are better and drivers than either myself or my wife and therefore less likely to have an accident in the first place);
3.pleasure: I enjoy driving - but not as much as I enjoy investing the money I am saving by not having a car;
4.drinking: if I drive I wll not drink at all. I like to drink.
We thought quite a lot about factor 2 but decided that the trade off between better drivers and child safety seats was not something we could evaluate. In conclusion, not owning a car is saving us a huge amount of money each year.
Next up: the taxi-bus trade off.