Author Topic: Mustachian beater vs. rental car for travel  (Read 2095 times)

TDWagner

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Mustachian beater vs. rental car for travel
« on: May 24, 2013, 06:51:13 AM »
I'm trying to figure out the break-even point for renting a car vs taking my own Mustachian beater.

1999 Honda Civic, 120K miles, paid off

I don't think this car is costing me $0.50 a mile, but I'm having a hard time deciding what cost per mile to use for calculations.

Cost of rental car per mile:
[total cost] / [number of miles]

Cost of my car:
???

Any advice on how to value the mileage?

Thanks!

dsull05

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Re: Mustachian beater vs. rental car for travel
« Reply #1 on: May 24, 2013, 08:36:34 AM »
It sort of depends whether you want to consider the mileage as a unit for the entire life of the car, or from this point forward. Since I don't know how long you've owned the car or what you paid for it, let's do a rough calculation of the latter..

Current value - ~$3k?
Salvage value - ~$500, I will assume you are driving this car into the ground as a true Mustachian; for a Civic that should be past 200k, but we will conservatively use that value
Maintenance (oil, brakes, tires, etc.  You can nail down a more exact number per MMM's post): $200/year (can be lower or higher based on your car or if you are handy with a wrench/getting deals)
Insurance - $500/year (what I pay for my 2000 civic)
Fuel - $4/gallon at 30mpg

Depreciation cost: (3000-500) = $2500/80,000mi = $.031/mi, none after 200k
Maintenance cost: $200/10,000mi (yearly approximation) = $.02/mi
Insurance: $500/10,000mi = $.05/mi
Fuel - $4/30 = $.133/mi

All told approximately $.235/mi, about as frugal as you can get for car costs, under half of the AAA figure.
This is an approximation and depends on your car and driving habits, but it should be pretty close.

TDWagner

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Re: Mustachian beater vs. rental car for travel
« Reply #2 on: May 24, 2013, 09:12:33 AM »
Depreciation cost: (3000-500) = $2500/80,000mi = $.031/mi, none after 200k
Maintenance cost: $200/10,000mi (yearly approximation) = $.02/mi
Insurance: $500/10,000mi = $.05/mi
Fuel - $4/30 = $.133/mi

All told approximately $.235/mi, about as frugal as you can get for car costs, under half of the AAA figure.
This is an approximation and depends on your car and driving habits, but it should be pretty close.

Thanks!  That really helps, and your assumptions seem very reasonable for regular driving cost per mile. 

The only parts I'd question for this particular rental calculation are the fuel and insurance.  I'm going to be buying fuel either way and my insurance payment doesn't change no matter which car I take so that's a wash, right? 

That would make my depreciation/maintenance cost per mile around $0.051 or so, so the calculation would look like:

Assume: $200 per wk car rental total cost

$200 / $0.051 per mile = 3,922 miles

...so if I'm driving more then 3,922 miles in that week the rental is worth it. 

$.051 per mile is REALLY cheap...rental is almost never going to be worth it.  Any other factors I'm not thinking of, or does this look right?  I guess if you have a more valuable car then renting can become an option, just doesn't look worth it compared to my Civic.

Thanks again!!

dsull05

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Re: Mustachian beater vs. rental car for travel
« Reply #3 on: May 24, 2013, 09:56:58 AM »
Good thinking.. In this circumstance (if you would be driving the exact #miles no matter the car), the only relevant factors are the depreciation + maintenance (only explicit costs to using your own car) and the difference in mpg between your car and the rental, which will probably be minimal. 

In that case, your calculation makes perfect sense. If there are no utility needs (passengers, cargo, whatever) than you're likely always better off driving the beater (I use the term affectionately) -- older civics are about the best you can do on that depreciation number. I would agree that unless you are taking the rental cross-country or something the civic will always be the better choice.  Even then, I'm guessing most places charge additional fees if you put on that many miles. Like you said, the rental would only make financial sense if you drive an expensive car.