Are taxis a luxury? If you do not own a car, it is okay to take one

You do not have to struggle home in the rain

Heavy shopping bags, worsening rain or no energy left to walk: have you thought of a taxi and then hesitated because you are trying to save?

If you choose life without a car, I think you can spend some of that room in the budget on necessary journeys. A taxi fare may look high alone, but the comparison changes when car ownership costs are included.

This does not mean a taxi is always affordable or available. Budgets, places and times differ. But after choosing not to buy a car, you need not blame yourself for taking one when needed.

Look at ownership costs, not just the purchase price

A car brings parking, insurance, taxes, statutory inspections, maintenance and fuel costs as well as its purchase price. Put monthly and occasional payments onto the same annual basis first.

Do not add the full purchase price every year. Here, assume a JPY 2 million purchase and a JPY 500,000 sale after five years: (JPY 2,000,000 − JPY 500,000) ÷ 5 years = JPY 300,000 a year. The resale value is an assumption, not a guarantee of receiving JPY 500,000.

In the table below, every amount is an explanatory assumption, not a market price, tax amount, insurance premium or inspection quote. The JPY 2 million assumes the vehicle and one-off registration costs, excluding insurance, tax, inspection and maintenance listed separately below. Add loan interest, fees, initial parking charges or tolls separately if relevant.

This example includes compulsory liability insurance, vehicle weight tax and inspection fees within inspection-related costs. They are separated from voluntary insurance and annual vehicle tax to avoid double counting. Check what actual quotes include, not just their category names.

Compare taxi use over the same year of travel

Now consider walking, trains, buses and necessary taxis without owning a car. Assume the following combination can meet the same household’s needs over the same year. This does not mean identical waiting times or convenience.

For taxis, assume an average total of JPY 1,800 per one-way ride, 16 rides a month. A return journey counts as two rides, so this is eight returns a month. The assumed average total includes pickup and surcharges; it is not a current fare or a statement about how far JPY 1,800 will take you.

Under these assumptions only, the difference is JPY 32,200 a month, or JPY 386,400 a year. This is a calculated difference, not a saving everyone can achieve. It is not automatically cash freed up for someone who already owns a car.

Occasional rides and daily transport can lead to different answers

The taxi option looks easier here because use is set at 16 rides a month. More commuting, school runs, longer distances or separate family journeys will change that budget.

A home with no parking charge differs from one renting a space. Some areas have few trains or buses and taxis that are difficult to book when needed. First check whether the option reliably meets household, luggage, health and commuting needs.

Some lives work better with a car; others suit occasional taxis without ownership. Put in figures for your own life rather than forcing yourself into whichever looks cheaper.

Taxi payments depend on more than distance: time-based additions, pickup charges and other conditions may apply. Check local operators’ estimates and extra fees, and plan the return journey too.

Already own a car? Look at costs from now on

Someone considering a purchase starts from a different point than an existing owner. The original purchase price is not paid again every year from now on. If considering selling, check future ownership costs, likely sale proceeds today, remaining loans and alternative transport costs.

Keep sale proceeds separate from costs you will avoid. Receiving a sale payment does not turn it into an annual saving. Consider the cost of buying again if that is possible.

If unsure, start by reviewing this month’s journeys: which required a car, how many taxi rides might replace them and which lack an alternative? Check your life before rushing to sell.

A taxi budget can make everyday life easier

Choosing not to own a car should not mean enduring every rainy day and heavy load. Money that makes a necessary journey manageable need not be treated as a bad thing.

When setting a budget, look beyond regretting a spontaneous ride and note when it helped: returning with heavy bags, or covering a poorly served section. Clear uses make taxis easier to treat as necessary transport spending.

Saving is not a contest to spend nothing. Reducing car ownership costs can leave room to use necessary taxis comfortably. If that suits your area and life, it is a valid choice.