How to Save the Most (Financially) From Carpooling

The average daily work commute for Americans is 26 minutes. On top of that, the cost of fuel, vehicle maintenance, insurance, parking fees, and even toll roads to get to that job can take a big chunk out of your paycheck. There has to be a better way to save your sanity and your pocketbook!

That’s where carpooling comes in. A great way to cut the costs of commuting to work is through sharing a ride with others. In this guide, we will go over the financial benefits of carpooling and how to implement them into your daily life.


Splitting The Cost Of Commuting

One of the biggest benefits of carpooling is to your wallet. Dividing your commute costs by 50  percent (sharing a ride with just one person) can quickly add up the savings. Think of how much you would save if you had three or four people riding along? If you get enough riders, you could even make money on your commute to work.  


Let’s say someone has a monthly commuting gas bill of $80, which doesn’t include going anywhere else. Then let’s add on vehicle expenses (maintenance, insurance payments, etc) which comes out to a total of around $480 a month. Over the course of 12 months, that adds up to a whopping $5,760 just to get to and from work!

By carpooling with just one person, those yearly costs are cut in half to around $2,880. The more people in your carpool, the more it can reduce your transportation costs.

If you would like to look up what you are paying for commuting check out  The University of California’s Commuter Cost Calculator.

Tax Benefits of Carpooling

Employers can cover transportation expenses for employees as a fringe benefit. These benefits allow employees to exclude a portion of their income to pay for the cost of parking, transit, and commuter vehicle costs. Employees, however, cannot specifically deduct any transportation costs on their tax returns.

Employers typically offer commuter fringe benefits in two different ways:

  1. Employer subsidy: the employer gives additional money to the employee that’s not considered part of his or her taxable income.
  2. Pre-tax withholding: the employee requests to withhold a portion of his or her income to cover transportation costs with pre-tax dollars. That is the most commonly offered option.

The maximum monthly amount commuting employees can exclude from their taxable income is $520 per month. That’s $260 for qualified parking benefits and $260 for qualified transit benefits.

Check with your employer to see if commuter benefits are offered.

How Carpooling Improves Your Well Being

There are multiple benefits to your health and wellbeing when you carpool. Having people to share the drive home with can decrease the stress of the daily commute and improve your overall health which decreases doctors visits.

First, making personal connections through carpools allow you time to get to know other people while commuting. Studies have shown socialization can help you live longer.

Second, carpooling can help reduce the stress on your mind and body.

Chronic stress can ultimately create heart disease, high blood pressure, or diabetes. Carpooling could save you from future doctors visits or expensive prescriptions.

Time To Be Productive

Time equals money. Imagine what you could do with an extra hour each day. When it’s not your turn to drive, use that time to be productive. Catch up on emails, read a book, make lists, or focusing on a lucrative side project.

Extending Vehicle Longevity

When a group of carpoolers alternate who drives, you obviously use your personal car less often. Driving less helps decrease natural wear and tear on your vehicle and extends its lifespan. Most Americans buy 13 cars in their lifetime, which are likely thousands of dollars each. If you can reduce the number of cars you buy throughout your lifetime, you save big money.


If you think carpooling is a good fit for you, the next step is to find an existing carpool group or start one of your own. Luckily there are lots of apps and services to help you out.  

Any of the following apps can help you find environmentally friendly money savers like yourself going in the same direction. Some apps even pair you up with riders who share your same interests! That assures you have something to talk about on your way to work.

Carpooling Apps

Another option is to ask around your office to see if anyone is open to carpooling.


If you plan to start a carpool, you may feel skeptical about letting someone you don’t know get in your car. Here are some questions you can ask to help you set some expectations:

  • Do you both have adequate auto insurance to cover an accident?
  • What is a good driving schedule for you both?
  • Where is a good meeting place for everyone?
  • How will you split costs? Will there be a monthly payment? How will you both get paid?
  • What is the best way to communicate for emergencies?
  • Do either of you have specific car rules that you should know about?
  • What type of music does each of you prefer?
  • What are the ground rules for cleanliness? Do you allow eating or smoking in your car?
  • How long should you both wait for the other before leaving for work?
  • Are you both comfortable signing a formal written agreement?


Carpooling is a popular way for people to connect and save money on their transportation costs. Incorporating carpooling into your daily life can provide lasting benefits not only to your wallet but to your mind, body, and environment.

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