RENTA

May 15 2020

#The price to rent a car #The #price #to #rent #a #car



The price to rent a car

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FrugalFringe.com

Calculators, Checklists, FIRE Commentary

Road Trip Calculator: Rent a Car or Drive Your Own?

For long trips that last only a few days, it’s often cheaper to rent a car than to drive one you own.

But the decision to rent depends on many factors: the trip’s mileage, leasing costs, fuel efficiency, how much your car depreciates with each mile, tire wear, and the price of oil changes.

With all the factors you need to consider, leasing a car presents a complex decision. But here’s good news. I’ve created an online calculator that weighs those many factors with speed and ease. All you do is input a few numbers, click a button, and up pops an answer.

If you’re planning a vacation, now’s the time to take this calculator for a short spin.

Road Trip Calculator Instructions

To improve the calculator’s accuracy, follow these tips.

Line 1: Trip Miles. When estimating your trip’s mileage be sure to include any driving around once you reach your destination.

Line 2: Rental Cost. Research rental prices online and input whichever offer you like best, including taxes. A ballpark estimate also works fine if you’re a frequent renter who knows the prevailing rates.

Line 3: Gasoline Expense. Project the price of gas for your trip. If you crave precision, visit GasBuddy.

Line 4: Fuel Economy (Part 1). If you don’t know how many miles your car gets per gallon, visit FuelEconomy.gov.

Line 5: Fuel Economy (Part 2). If you know the particular model you want to rent, visit FuelEconomy.gov. Otherwise, make a reasonable estimate based upon the rental’s size (compact, full-size, SUV, etc.).

Line 6: Tire Cost. Your tires suffer wear on road trips, bringing them that much closer to replacement. Input the cost of new tires, including sales taxes and mechanic’s labor. If you’re unsure of these costs, visit TireRack.com.

Line 7: Tire Longevity. Your tires might boast a 50,000 mile warranty, but don’t expect them to last that long. Rely instead upon your personal experience or make an estimate that’s at least 10-15 percent below the advertised mileage.

Lines 8-9: Oil Change Expense. Input the cost of oil changes and the miles that pass between them.

Line 10: Depreciation (Part 1). With each mile of travel, your car loses value, i.e., it depreciates. Although there are several ways to figure depreciation, I picked this one:

depreciation per mile = purchase price of vehicle whether bought new or used (including sales taxes) / predicted mileage of vehicle from date of purchase until it enters junkyard.

I chose this formula for several reasons.

First, this method treats your car like the wasting asset it truly is. Whether you buy new or used, your car’s worth ends up at salvage value.

Second, this website is about frugality. Frugal owners tend to drive a vehicle until it’s ready for the junkyard. Given this tendency, a wasting asset formula depicts depreciation better than market-based approaches (market values are irrelevant if the owner never sells).

Third, even for owners who plan to eventually resell their cars, my chosen formula provides a good proxy for lost market value. Moreover, it’s more convenient to use than a valuation website such as Kelly Blue Book.

To use the calculator’s depreciation formula, on line 10 enter the total price you paid for your new or used vehicle, including sales tax. (On the other hand, if you want to use Kelly Blue Book, see the instructions that appear at the end of this post.)


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SOURCE: http://www.frugalfringe.com/calculators/road-trip-calculator-rent-a-car-or-drive-your-own/

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