An anticipated 70.9 million Americans are predicted to participate in road travel exclusively during the Independence Day week, according to AAA reports.
For some car owners, it might be more cost-effective to hire a vehicle for a trip rather than using their own car, as advised by professionals.
“It depends on various factors,” stated Greg Brannon, AAA’s chief of automotive engineering research.
These factors include the effectiveness of your current vehicle, the duration and distance of the trip, whether you lease or own the car, and the size of the vehicle, among others, based on advice from Toyota.
Here are some essential considerations to ponder.
Vehicle Specifications
When deciding whether to rent a vehicle, the seating capacity is crucial, mentioned by Brian Moody, Autotrader’s executive editor, an online marketplace for cars.
An easy way to assess this is by considering, “My car can seat five, but there will be eight people on the trip,” as illustrated by Moody.
Drivers should also consider factors such as the need for a 4-wheel-drive vs. 2-wheel-drive vehicle and the availability of storage space for luggage and gear.
Operating Costs
This is where the calculations can get a bit complex. There are various financial aspects to consider, some obvious and some less so.
Drivers must compare the total rental costs – including the daily rate and potential additional services like insurance – with the expenses of using their own car.
Costs for fuel, whether gasoline or electric charging, impact both renters and car owners.
Selecting a more fuel-efficient rental vehicle could potentially save money. For example, opting for a rental car that gets 40 mpg instead of one that gets 20 mpg would cut fuel costs in half, assuming all other factors remain constant.
Lease Expenses
In the second quarter of 2024, the average daily lease cost was $42, with most travelers opting for four-day leases, according to Hopper.
The daily rate can vary based on factors like the leasing company, car model, and pickup/drop-off locations.
Car rental insurance could raise the daily rate by $30 to $61, depending on the insurance type, as per Allianz Travel, citing MarketWatch data.
Returns looking for car insurance may not need to buy additional coverage from the rental agency.
Vehicle owners may already have comprehensive coverage for a leased car through their auto insurance or credit card benefits, according to Brannon.
Depreciation and Mileage Limits for Leases
Those with leased vehicles should also consider factors like mileage restrictions before embarking on a long road trip. Exceeding the standard lease mileage limit of 12,000 miles per year could lead to financial penalties, as revealed by Kelley Blue Book.
The charge for surpassing this limit is usually around 20 to 30 cents per mile, as per KBB. (At 30 cents per mile, a driver would incur $300 for every additional 1,000 miles over the limit.)
There are also aspects of the car’s depreciation to take into account.
Depreciation represents a decrease in the car’s value over time. Cars typically lose around 10% to 15% of their value once they leave the dealership, noted by Brannon.
Depreciation is considered “the most significant cost of owning a car,” emphasized Brannon. Therefore, it is crucial to consider this for road trips, he emphasized.
Each mile adds wear and tear on the engine, tires, and other parts, in line with Allianz.
Depreciation impacts cars differently. On average, a car depreciates at about 20 cents per mile, according to Toyota.
For shorter road trips covering distances between 1,000 and 1,500 miles per year, depreciation may not be a major concern compared to leasing costs, as hinted at by Moody.
Depreciation usually matters more for individuals planning to sell or trade in their car in the future.
Vehicle Condition
Unexpected repairs can result in significant costs: The average repair cost during a trip exceeds $500, excluding towing expenses, based on AAA data referred to by Brannon.
The likelihood of a breakdown is lower with leased vehicles, which are usually newer models, noted by Moody. The average age of a used car on the road is about 12 years, he pointed out.
While a breakdown would be inconvenient for anyone on a road trip, renters typically do not bear the financial responsibility (assuming they are not at fault), according to Moody.
Brannon suggests drivers question themselves on various aspects: Have I adequately maintained my car? Is it suitable for long trips? Are the tires in good condition? Is it mechanically sound? How old is it? What safety features does it have?
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