Author Topic: Mileage reimbursement or rental cars?  (Read 4550 times)

ETBen

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Mileage reimbursement or rental cars?
« on: June 27, 2016, 08:46:06 PM »
My new job allows me to rent a car for trips over 120 round trip. But I'm thinking it's better to drive and take the reimbursement and pocket the money.

Mileage reimbursement was my only option at old jobs. I'm getting the full federal rate. My car gets 35-40mpg and is only a year old with 25k miles on it. I estimate 4 trips per month of 200+ miles each. There are other shorter trips but those can only be expenses through mileage, no rental option.

bobechs

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Re: Mileage reimbursement or rental cars?
« Reply #1 on: June 27, 2016, 09:51:57 PM »
Taking mileage you are turning your car back into the money it took to buy it (including interest if you are paying interest) and the money it takes to operate it, both fixed costs like insurance, registration, etc. and variables like fuel, oil and tire wear.

If your actual cost of operation is less than the reimbursement you make a modest profit on each mile.

But only you know the actual costs of operating your car. 

Choices

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Re: Mileage reimbursement or rental cars?
« Reply #2 on: June 27, 2016, 10:38:46 PM »
There's also a few other things to consider:
- the comfort of your car vs a rental car on long trips
- the time, mileage, and hassle of picking up and dropping off a rental car

I was offered this once for work but would have had to find someone to drive me 20 min to pick up the car then drive it back home to pack, then repeat the process when I got back to town. It was such a hassle I just drove my own car.

ETBen

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Re: Mileage reimbursement or rental cars?
« Reply #3 on: June 28, 2016, 04:15:16 AM »
Taking mileage you are turning your car back into the money it took to buy it (including interest if you are paying interest) and the money it takes to operate it, both fixed costs like insurance, registration, etc. and variables like fuel, oil and tire wear.

If your actual cost of operation is less than the reimbursement you make a modest profit on each mile.

But only you know the actual costs of operating your car.

Ok that's what i was thinking too. I should always do the mileage up to the cost of the gas, insurance, and car payment.

I'm about a mile from the rental place so ease isn't too bad. But I generally prefer driving my own car, I think. It was a consideration when I got it bc I knew I'd be driving with work.

bludreamin

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Re: Mileage reimbursement or rental cars?
« Reply #4 on: June 28, 2016, 04:34:02 AM »
 not sure what your industry is or job entails but another thing to consider is likelihood of damage to your car and how it would be handled it there was damage. 

I sometimes do site visits to construction sites and always consider site conditions before deciding to take me own car.  If it's just a meeting/site walk I'm inclined to take me own car but if I have to rely on my car to travel access roads I'll get a rental so I don't have to deal with hassle of chipped glass.  Also I've heard stories of damage to personal vehicles that company wouldn't help with - in cases where damaged onsite driller/contractor paid for repairs but if offsite accident with Joe Shmoe you would be left with having to deal with your insurance.

Also likely not a problem given the age of your car but it's been highly encouraged that I go the rental route if I'm going to be meeting a client - guess my 14 yo car with a few rust spots isn't good for the company's image 😉 #mpp

boarder42

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Re: Mileage reimbursement or rental cars?
« Reply #5 on: June 28, 2016, 07:37:40 AM »
so you're just depreciating your car faster. i have a 2008 with 220k miles on it so i dont really have any mileage depreciation.  if there is ever a time to sell you car and get something older with the same mileage thats reliable i would say now is the perfect time.

nereo

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Re: Mileage reimbursement or rental cars?
« Reply #6 on: June 28, 2016, 08:30:30 AM »
My new job allows me to rent a car for trips over 120 round trip. But I'm thinking it's better to drive and take the reimbursement and pocket the money.

Mileage reimbursement was my only option at old jobs. I'm getting the full federal rate. My car gets 35-40mpg and is only a year old with 25k miles on it. I estimate 4 trips per month of 200+ miles each. There are other shorter trips but those can only be expenses through mileage, no rental option.

I had an extremely similar situation about 10 years ago - I drove ~1,500mi/month for work on long trips and could either use my car and claim mileage or rent a car.  Briefly, my experiences.

I went with the mileage - my car got 30mpg (towards the higher end in 2007), i owned it outright (no interest) and it was about 3 years old at the time. At first it felt like I was really coming out ahead because I got a check each month for ~$600, and about half of that went towards fuel.  After two years of this I had saved up about $8k.  By year two there were some expensive (but predictable) repairs; new tires, new brakes/rotors, CV joints, etc. that sucked back a couple grand from what I had "saved." However, combined with my daily commute I was driving my car close to 30,000mi/year and in just two years the wear/tear was very evident. I ate so many meals in that car and spent so many hours in the drivers seat that the interior suffered (badly).  While 95% of the miles were highway the end of each trip often involved a few miles of dirt roads in unknown locales and I put a couple scratches into the paint where bushes/trees were crowding the road. 

In a way it was good for me because it made me stop viewing my car as some precious thing that reflected who I was, and instead I started seeing my car as just a tool to get my from point A to B.  That was what made it worth it to me.  Ultimately I feel I made some profit on the deal, but it wasn't a huge amount. Driving a car I was familiar with was certainly a plus, and I never had to deal with going to the car rental and denying (yet again) the stupid "rental car insurance" upsell.
YMMV (pun intended).

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Re: Mileage reimbursement or rental cars?
« Reply #7 on: June 28, 2016, 08:42:49 AM »
Also, you're probably more familiar with your car and less likely to get in an accident because you know where your blind spots are, how big a parking space you need, the turning radius, etc.

Manguy888

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Re: Mileage reimbursement or rental cars?
« Reply #8 on: June 28, 2016, 09:41:07 AM »
I have similar options when I go on local travel and I usually choose the mileage. I believe my old car costs less per mile to operate than they're paying me. Plus I avoid the hassle of going to the rental car place. It's a small win, but I'll take it.

ETBen

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Re: Mileage reimbursement or rental cars?
« Reply #9 on: June 28, 2016, 07:54:21 PM »
Good points.  I do feel safer driving my car.  I always feel a little off when I'm driving a car I don't know.  But if I were in an accident, I'm not sure what would happen if I wasn't following the work policy.  I suppose it would be on my auto insurance, but besides that I should check.

I recently got this car, so I won't be selling it for an older car.  I originally looked at older cheaper cars with more miles, but the majority of my driving is in my car and I did have some personal wants there (I've had jobs that require plenty of driving for .  I could pay off the car now but haven't bc the rate is so low it makes more sense to put that money towards investment.  I may pay it off with my bonus in Jan. 

I imagine there a knwon break even point regarding mileage vs actual cost to own. 

boarder42

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Re: Mileage reimbursement or rental cars?
« Reply #10 on: June 29, 2016, 07:30:06 AM »
thre isnt a known break even you would have to calculate it based on you car.  oil/tires/gas costs ... extended maint. costs.  depreciation costs which are high on a car with such low miles.