Showing posts with label Depreciation. Show all posts
Showing posts with label Depreciation. Show all posts

Tuesday, February 26, 2013

Vacation Budgeting: Is it Wiser to Rent or Drive Your Own Car?

gas pumpThere's no clear-cut answer when you're asking whether it's better to rent a vehicle or use your own car. However, there are several calculations that will help you do the math. With these equations, you can make a budget-minded choice for your next road trip.

Fuel Costs and Opportunities to Drive Greener

Your fuel cost is one of the easiest things to calculate for your trip. You can find the MPG of nearly any vehicle online. Simply compare the MPG for your car with that of a rental. If you're not taking a lot of luggage with you, opt for the smallest car you can comfortably fit in. Renting a hybrid vehicle will also cut your fuel costs. Unless you have a fuel-efficient hybrid vehicle yourself, you can almost always find a rental with better fuel mileage than your own vehicle. A rental will probably win this category.

Maintenance Costs vs Rental Fees

If you drive your own vehicle, you need to consider the maintenance costs associated with your trip. Your next oil change, tire rotation, front end alignment, and factory scheduled maintenance will all be moved up by a long road trip. AAA estimates that the average cost for maintenance, not including oil or gas, is 4.42 cents per mile for a medium-sized sedan. The cost for tires is 0.91 cents per mile. You'll cut these costs with a rental and replace them with your rental fees. Divide these by the number of miles you're driving for a comparison.

Vehicle Depreciation Considerations

Every mile that you put on your car speeds its depreciation. Most vehicle depreciation comes from the number of miles driven and not the age of the car. Use a resource like Kelley Blue Book to calculate the current value of your car as well as the projected value with the mileage from your trip. This will tell you what your long-term depreciation costs will be.

Paying Now vs Paying Later

Comparing your calculations for the above categories will let you know whether a rental car is ultimately cheaper than driving your own car for your next road trip. The last thing that you need to consider, however, is when you'll be paying. Many costs associated with driving your own vehicle come up later. You won't pay upfront for depreciation or maintenance, while you will pay upfront for your rental. If your car needs maintenance before the trip, however, you should visit a qualified shop like Tindol Ford to have this done before you leave.

The Value of Comfort

Comfort doesn't have a monetary value, but it's worth considering. A rental will be fresh and clean for your trip with no extra effort on your part. However, your vehicle may have features the rental does not. Consider the benefits of a larger trunk, more cup holders, or heated seats, whether these come with your own car or the rental. If this competition is close, this may tip the scale. Doing your math will help you make the best choice of vehicle for your next trip. Simply add up these important values and you'll find the best answer for your needs.    

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