Connect with us

Hi, what are you looking for?

News

Things To Consider Before Renting A Car For Your Next Road Trip

Image Source: alexfan32 / Shutterstock
A record 70.9 million Americans are expected to travel by car during the July Fourth holiday week alone, as per AAA.

For some car owners, it may make more financial sense to rent a vehicle for a road trip instead of using their own, experts suggest.

“It’s going to depend on various factors,” said Greg Brannon, AAA’s director of automotive engineering research.

These factors include your current vehicle’s fuel efficiency, the distance of your trip, duration of the journey, whether you lease or own, and the size of your vehicle, among other considerations, according to Toyota.

Here are some important points to think about.

The car’s specs

When deciding whether to rent a car or not, the vehicle’s capacity is crucial, says Brian Moody, executive editor of Autotrader, a car shopping site.

It’s straightforward to assess the situation by considering, “I have a five-passenger car, but I have eight people going on the trip,” Moody explained.

Drivers should also consider factors such as the need for a two-wheel-drive versus a four-wheel-drive car and the storage space available for luggage and gear.

Operating costs

This is where the math can get a bit complex. There are various financial costs to compare, some obvious and others not so much.

Drivers will need to compare the total rental costs – including the daily rental rate and potential add-ons like insurance – with the costs of using their own car.

“Most people may be surprised at the actual costs of owning and using their car,” mentioned Brannon.

Fueling costs, whether for gasoline or electric charging, are financial factors for renters and car owners alike.

It may be possible to save money by renting a more fuel-efficient vehicle. For instance, opting for a rental car that gets 40 miles per gallon instead of one that gets 20 mpg, would cut fuel costs in half, all else being equal.

“If you have an older car that is fuel-inefficient, it might be more cost-effective to rent something,” Moody suggested.

Rental costs

In the second quarter of 2024, the average daily rental cost was $42, with most travelers seeking four-day rentals, according to Hopper.

The daily rate can vary based on factors such as the rental company, car type, and pickup/drop-off locations.

Rental car insurance could add $30 to $61 to the daily rate, depending on the type of insurance, reported Allianz Travel, referencing MarketWatch data.

Renters looking for car insurance may not need to purchase additional coverage from the rental company.

Car owners may already have full coverage for a rental through their car insurance policies or credit card benefits, mentioned Brannon.

“Contact your insurance agent and confirm your coverage,” he recommended. “You can avoid unnecessary costs by not double-insuring the vehicle if it’s not needed.”

Depreciation and mileage caps on leases

Additionally, car owners with leased vehicles should consider factors like mileage limits before embarking on a long road trip. Exceeding the typical lease mileage cap of 12,000 miles per year can result in financial penalties, as reported by Kelley Blue Book.

The cost for surpassing this limit is generally around 20 to 30 cents per mile, according to KBB. (At 30 cents per mile, a driver would pay $300 for every additional 1,000 miles beyond the cap.)

There are also factors related to the depreciation of the vehicle to take into account.

Depreciation leads to a decrease in the value of a car over time. Cars typically lose about 10% to 15% of their value once they are driven off the lot, Brannon pointed out.

Depreciation is considered “the most significant expense of owning a vehicle,” Brannon highlighted. That’s why it’s critical to consider this for road trips, he emphasized.

“The more miles you drive the vehicle, the more it depreciates,” Brannon explained.

Each mile adds wear and tear on the engine, tires, and other components, as per Allianz.

Depreciation impacts all cars differently. On average, a car depreciates at about 20 cents per mile, according to Toyota.

For shorter road trips, where the distance traveled is between 1,000 to 1,500 miles within a year, depreciation might not be a significant concern compared to rental costs, Moody suggested.

Depreciation usually matters most for individuals planning to sell or trade in their vehicle in the future.

State of the vehicle

Unexpected repairs can be costly: The average repair bill while on the road amounts to over $500, excluding towing expenses, based on AAA data cited by Brannon.

The chances of a breakdown are lower with rental cars, which are typically newer models, as stated by Moody. The average age of a used car on the road is about 12 years old, he noted.

While a breakdown would be inconvenient for anyone on a road trip, renters are usually not financially responsible (assuming they are not at fault), according to Moody.

Brannon suggests that drivers ask themselves several questions: Have I maintained my car well? Is it suitable for long journeys? Are the tires in good condition? Is it mechanically sound? How old is it? What safety features does the vehicle offer?

Image Source: alexfan32 / Shutterstock

You May Also Like

News

Peloton, known for their stationary exercise bikes and treadmills, has faced significant financial challenges over the past year. The company experienced a surge in...

News

Amid the ongoing global supply chain challenges, many retailers in the United States are grappling with surplus seasonal stock, leading to increased storage costs...

News

With the continuous increase in gas prices, a decrease in consumer confidence, and the ongoing conflict in Ukraine, the European economy faces significant challenges....

News

As the demand for electric vehicles grows and the push for environmental sustainability increases, automakers are gearing up to focus more on the development...

News

Today, Brian Armstrong, the CEO of Coinbase, conveyed to his team through a company-wide email that due to declining stock and crypto values and...

News

Recently, Peiter “Mudge” Zatko, a former cybersecurity specialist at Twitter, published a whistleblowing document on the platform. Zatko highlighted several security issues with Twitter,...

News

Zelle is a popular peer-to-peer payment service that allows individuals to send and receive money, similar to apps like Venmo. It is widely used,...

News

Recently, after Chinese President Xi Jinping secured a third term, there was a sharp decline in the stock market in Hong Kong. Investors became...