The automobile provided a key to Ann Arbor's growth and its relations with the outside world. In 1920 Ann Arbor, like the rest of America, was divided between the horse and the car. There were two gas stations, two feed barns, and four blacksmith shops in town. By 1925, the feed barns and blacksmith shops had disappeared. But there were fifteen gas stations, and by 1930, forty-two. In conjunction with improved roads, private cars dealt the coup de grâce to the interurban and hurt a struggling city bus system.

At the beginning of the decade, Ann Arbor's only physical contact with the outside world was by interurban, train, or a bumpy ride by horse or car over dirt roads. In 1921 the first paved road to Jackson was opened. Three years later the stretch between Ann Arbor and Ypsilanti was paved, completing the through road to Detroit. By early 1927 Ann Arbor had two hard-surfaced roads all the way to Detroit and two to Chicago. At the end of the decade it had intercity buses, frequent train services, and a fledgling airport which entitled it to airmail service.

With the growing importance of the automobile, the city moved to improve its streets. In 1921 pavement covered fifteen miles, or less than a quarter of the city's total and that included only the major thoroughfares and downtown streets used by business and manufacturing. There were virtually no curbs or gutters anywhere in the city. By 1919 some thirty-four miles, nearly fifty per cent of the city's total, were hard-surfaced. Almost every street in town had been curbed, guttered, and graveled in preparation for paving.

While the city responded with improved roads, private individuals were building special houses for their automobiles. Even in 1920 and 1921, when the high cost of materials limited construction projects, local residents began a garage-building spree which lasted throughout the decade. Virtually every family residence erected in the '20's had a special house for its automobile, and many occupants of older homes replaced the high stable with a rectangular garage.

As automobiles increased in number and speed, the streets became unsafe places in which to walk or play. The city pushed a program of sidewalk construction outside main shopping areas, and by 1924 required that walkways be concrete. With vacant lots rapidly disappearing and the streets unsafe, parks ceased being merely nature preserves in the midst of the city where one could walk or picnic. They became "playgrounds" with ball diamonds, tennis courts, and "playground equipment." Schools added play yards, and in 1926 the electorate approved a special bond issue for the purchase of more park land and playground facilities. By the end of the decade the city directory stopped using the term "parks" in favor of the more accurate "parks and playgrounds."

Ann Arbor's traffic problem was compounded each fall and spring by the great numbers of non-resident students who by reason of need or social fashion also drove. President Leroy Burton's request to parents in 1923 that they keep their sons' and daughters' cars at home failed to have noticeable effect, in part because of the profitable business of selling cheap used cars to students. The editor of the Michigan Alumnus commented that there were two types of automobiles: "those which may be sold to the general public" and "those which nobody but an undergraduate will buy." Many of the vehicles, selling for as little as $18 or $25, were unroadworthy, and accidents resulted from inadequate brakes and steering. Poor driving habits also contributed to the accident rate. In the spring of 1924 council passed a law aimed particularly at University students. It forbade more than two adults in the front seat and anyone sitting on the driver's lap.

Even without student autos, Ann Arbor had a full quota of cars by the mid '20's. Restrictions on student driving seemed inevitable. In 1927 the Regents, reacting to many serious automobile accidents, passed a ban on all student driving except with special permission. A special campus policeman was appointed to insure compliance with the regulations.

The automobile altered recreational life for Ann Arborites. A drive through the countryside replaced the canoe trip down the Huron. A favorite destination was Whitmore Lake. Once a social center for special occasions, such as class, church, or fraternal picnics, only a single hotel had graced its wooded shores. Now the lake was encircled by the summer cottages of Ann Arbor residents and the shoreline featured a number of hotels and boardinghouses, two dance halls, and several large bathing beaches.

Whatever its advantages, the automobile had some undesirable side effects. According to the contemporary observers, it introduced "crime" into Ann Arbor. In February 1924 armed robbers got $100 from the Ann Arbor Fuel Company, and in March 1926, $3,000 from the Majestic Theater. The media saw these occurrences as an indication that Ann Arbor was becoming a "big city." Actual crimes were invariably attributed to outsiders who "got away by car toward Detroit"; or burglars who "came to town" for the evening.

Under the impact of the automobile, Ann Arbor expanded outward beyond the streetcar tracks, and more affluent individuals who worked elsewhere began to move into the area. While Ann Arbor always had a significant number of well-to-do residents who worked outside the city, they increased at a great rate, numerically and proportionally, during the latter half of the decade. By the early '20's they had already established a pattern of leaving Ann Arbor during the warm weather for summer homes at nearby lakes.