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Photo by Katrina 2353Planning on taking a road trip this summer?
Doing a little mathematics coupled with some easily obtainable statistics,(Google anyone?) can save you and your family a lot of money in travel expenses.
Let's break down the average cost for a 2400 mile trip.
First, maintenance costs over the length of a trip can be fairly significant. The average vehicle has 5.2 cents per mile in maintenance costs (Excluding fuel, oil, tire wear, coolant, etc.) That is a total of $124.80 cents.
Second - 2400 miles of depreciation for one trip at $0.20 per mile again costs several hundred dollars in car value on the back-end. (Factor into this depreciation the cost of major repairs)
Third - Is a car, or a van cheaper to rent than driving your own vehicle?
If your trip is scheduled for more than 10 days, do some calling around to get rental prices on vans. In my experience the average cost for a van would be around the $400.00 - $500.00 mark. (Unlimited miles)
Now let's do our math -
Our vehicle maintenance cost - $124.80
Depreciation -$480.00
Total capital outlay = $604.80
Rental Van Maintenance cost - $0.00
Depreciation - $0.00
Rental for time period (lowest figure) $400.00
Savings realized = $204.80
If you must factor in insurance - my advice would be to use a credit card that offers free insurance coverage when you charge the vehicle on their card.
If you do not have a credit card that offers that option, I suggest calling your insurance company, and seeing if they will cover the vehicle for you, (most companies do) and if not insurance costs through most rental agencies average about $10.00 per day. The added expense for peace of mind, and safety is minimal. (And required by law in most states)
Sometimes, doing the math can save you a significant amount of money in the long run.
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10 comments:
Your "First" math is off -- it should be around $125, not $450.
Thank you for pointing out my miscalculation.
It has since been corrected.
You still have to buy gas for the rental as well and I don't see that calculation in your post.
You corrected the math in "first" but you did not change it in "let's do our math."
I'm going to have to do this in a month or two, and I'm not looking forward to it. We're going to drive from Pensacola, FL to Wake Forest, NC...12 hour drive if traffic is great. So far the estimate I've gotten is around $450 for 6 days. Eeek!
Thank you once again. Math table is now accurate.
I disagree with your theory.
Age is the main factor in automobile depreciation, not mileage. Your car still depreciates sitting in your driveway. And depreciation doesn't COST you anything... it's NOT AN EXPENSE, it's an accounting valuation and is meaningless outside of taking a DEDUCTION for tax purposes, and only if you can legitimately write it off.
And 2400 miles on a car isn't going to make one iota of difference in resale value.
Maintenance expenses are reasonable to account for, but that alone doesn't make it a better financial choice, except maybe for car rental companies.
Hi Valerie,
Age is indeed a major factor in automobile depreciation, but mileage plays an equally important role as well. Checking the NADA (Orange book) guide you can see for yourself how car value depreciates faster with a given age when coupled with higher mileage.Todays vehicles are built much better than they were 20-30 years ago, so a car today with 70,000 miles on the odometer can be considered fairly low in the mileage department.As well some cars do appreciate with age (A Corvette for example)but overall the average vehicle does lose much of its value the moment the tire hits the pavement
The comparison depends upon the age and value of the vehicle that you own and would be driving if not renting. If you compare renting to driving a new or nearly-new vehicle of similar class to the rental then rental can be less. On the other hand, something like my trusty 10 year old van will depreciate only about $500 this year under normal conditions - being driven about 18,000 miles over the year. Driving it more or less will have next to no impact on resale value. One extra oil-change would be needed on a 2400 mile trip - so maybe $20 extra for that would need to be in the budget. Wear-and-tear is likely to be minimal on a highway trip but instead of renting I can save the extra $400+ in rental fees in the bank and have the money if needed for any repairs. If I get lucky and no repairs are needed then I am at least $400 richer for having not rented. Was this article is in any way sponsored by car rental companies or something? There are currently at least 6 advertisements for car rental compaies on this page and it would just be really appropriate to provide a more balanced and unbiased comparison.
To the anon with the 10 yr old van:
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