Rental vs Own car for roadtrips ?

[ananddrox]

Hi,

With long weekends and summer around I am (yet again) thinking about something that has been in my mind for sometime now. The title already represents my dilemma, but I am not sure whether to rent a car or use my own car for a road trip.

Assuming the cars are similar, and have the gas mileage, the costs can be a little simplified (I guess). Also assuming the cars dont offer any financial advantages over the other (that is, no camping benefits from cars, no toll benefits, etc). Assuming road trip is about 2700 miles.

1. Car cost
Own Car - No rental cost, no additional insurance required (already existing insurance covers insurance needs)
Rental Car - Assuming rental cost is about $50 a day including LDW (no liability coverage as I am using the existing car insurance for that since the cost is significantly high) (10 days x $50 = $500)
Savings when using own car over 10 years of a standard 7% compounding is about $985, just for perspective.

2. In case of car damage
Own Car - If damaged, existing insurance takes over but premiums might take a hit. Assuming 30% hit, would mean $250 yearly (taking $815 as average yearly premium which Google spits out on searching).
Rental Car - If damaged, rental car insurance takes over, no premium hits.

3. In case of liability
Own and rental car - assuming liability is covered by existing insurance to save rental costs.

4. Miles and depreciation
Own Car - My car is 3 years old with 20K miles (bought new (bad, didnt know about MMM at that time), use it less). 2700 miles would cost about $150 now if I sell (calculated using KBBs car values with a 3K miles difference for my car model & year). Although given MMM principles, the miles shouldnt matter because you might want to extract the value out of the car before you get another one.
Rental Car - Dont care on the number of miles

5. Comfort of my car :(
Assuming both cars are similar except for this one factor. My car gets me sleepy on long drives (not sure why), which I would like to factor in as well. Roadtrips needs driving, a lot, not sleeping. A rental car is usually good on long drives for me, in this aspect as I find them different from what I am used to , and that somehow keeps me awake.

Am I missing any other factors? What are your suggestions? Rental or own car for road trips ?

[BuddyXL]

It may not be a direct answer to your question but...

I own several vehicles free and clear (I am a car guy) yet when going on roadtrips, I usually rent a car\truck.  Especially if driving in a big city or if I know I will be in snow and ice.  I get the insurance and if the car gets damaged or wrecked, oh well....at least its not my own.

If you ever had a vehicle break down far from home on vacation, you are at someone else's mercy to get it fixed which means lost vacation time and big costs.  If a rental breaks down or gets wrecked, I have always had great service where they have a replacement car to me in less than a day.

And its mileage on THEIR car and not mine reducing tires, engine wear, etc.

I probably spend more money on vacations that way but I have no worries about the car if I have to park in a rough neighborhood or if I have to drive on icy roads.  The worry-free aspect is worth the cost.

[FireHiker]

when we downsized our giant SUV last year we did the math. To replace our old giant SUV with a new SUV vs. a new smaller car, it would take 48 weeks' worth of SUV/minivan rental to break even. That doesn't even account for the extra gas, more expensive tires, etc. We like to do longer roadtrips and will probably do some in the next few years, but we'll rent a minivan or SUV for those specific trips. We still didn't go especially mustachian with our new car (CRV) but it does get the same gas mileage as my 2008 Honda Civic and was a big compromise for my husband. Incremental progress is still progress after all.

[ananddrox]

I probably spend more money on vacations that way but I have no worries about the car if I have to park in a rough neighborhood or if I have to drive on icy roads.  The worry-free aspect is worth the cost.

I get you, but quick question. Considering money in hand today is worth more and better long term, how do you compromise or settle to spend more on vacations? Just looking for reasons to console myself to spend the extra money on the rental car.

[ananddrox]

when we downsized our giant SUV last year we did the math. To replace our old giant SUV with a new SUV vs. a new smaller car, it would take 48 weeks' worth of SUV/minivan rental to break even. That doesn't even account for the extra gas, more expensive tires, etc. We like to do longer roadtrips and will probably do some in the next few years, but we'll rent a minivan or SUV for those specific trips. We still didn't go especially mustachian with our new car (CRV) but it does get the same gas mileage as my 2008 Honda Civic and was a big compromise for my husband. Incremental progress is still progress after all.

I lost you somewhere in the middle. But if I read correctly, the comparison was new SUV vs smaller car and the difference between those was 48 weeks ? Thats steep.

Also you mentioned that you would still rent for the trips, any particular reasons ?

[BuddyXL]

ananddrox,

To justify the cost of the rental car, I typically only stay at hotels I have points to use for free stays.  Even if its few miles difference, the hundred bucks a night I save can almost pay for the rental car on some trips.  Now I do accrue the points from work travel but they are still my points.

[obstinate]

Unless you plan on disposing of your vehicle early, it is not appropriate to use the marginal mileage cost. You should used the cost amortized over the car's lifetime. So figure out what depreciation and maintenance will cost per mile over the life of the car, multiple that by the number of miles you are to travel, and see if that's less than what the rental car costs. If it is, drive yourself, otherwise, drive the rental car.

BTW, if you are at fault in an accident, your insurance premium will likely be hit regardless of whether you were driving a rental car.

[EngagedToFIRE]

I'd say get as much use out of the car you already bought as you can.  I don't get the argument about liability at all.  Why would this only apply to your road trip?  You could wreck your own car anytime over 3,000 miles at home, too.  There is no difference.

Ideally, you have a car with a reasonable operating cost because you know better!  A rental might make sense for a low mileage lease owner or someone with a massive gas guzzler who wants to rent a fuel efficient car, but otherwise, use your own.

[Khaetra]

I usually always rent.  It gives me peace of mind knowing that if I have a car issue I can just get another one (happened on my last road trip) rather than having an issue with my own car and being stuck somewhere waiting for repairs.

I am heading out in 2021 on another major road trip and am trying to decide if I want to use my Fit or rent.  I plan on doing quite of bit of mountain driving and I am not sure if the Fit can handle it.

[Blueberries]

This really is just a personal question and everyone will have different reasons for why they do what they do.

For me, if I have a newer car, I use it because I drive my cars into the ground and I'm not terribly concerned about preserving mileage.  I'm also more concerned about a crash in a rental.  When I have an older car (10 years old, for example), I'll do a rental to avoid a potential breakdown.  This is just works for me, though.

[Just Joe]

I rent when my daily driver is old and worries me about breaking down. I rent when if my daily driver is not big enough or comfortable enough for the trip. I rent if the fuel savings exceed the cost of the rental.

Otherwise I drive my daily driver. My daily drivers always run a little better after a long trip b/c the engine gets hot and run at high rpms for many hours at a time rather than puttering around town and low speeds. 

I'm not worried about liability. Not worried about breakdowns. I'm already saving $$$ per week that I could then spend on the vacation or the maintenance of my vehicle. The only break down we ever had on a family vacation was the a/c went out halfway home. We had a hot few hours on the trip home but we survived. If it was really hot (like South West hot) we'd prob find somewhere to stay cool and drive after the sun went down.

I've rented a car for an out of state trip for myself exactly once. My daily driver at the time had huge miles on it and honestly would have been fine but we can get a discount through my employer and I talked myself into it.

[bognish]

To Khaetra: I just inherited a FIT. I live in UT and drive up the mountains/canyons a bit. The FIT isn't great for it. Its underpowered on the way up and the low drive gear is not low enough for the way down, end up having to break a lot. If I had 4 heavy people in the car or lots of gear I would definitely rent over using a FIT.
Otherwise unless my car had reliability issues I would never rent a car for a road trip.

[ketchup]

I only rent when I'm driving a hilarious amount of miles in a short amount of time and the rental cost is comparatively low.  I drove a rental Corolla 2200 miles for around $90.  Four cents a mile plus gas was cheaper than the all-in cost of driving my own car.

[Villanelle]

It sounds like you want to rent.  Perhaps you can help offset the extra expense by renting a smaller (cheaper rent and better gas mileage) car, rather than something comparable to your own. 

[Buffaloski Boris]

I view the autos we own as mostly a sunk cost. We drive them till they get wrecked or become extremely high mileage/unreliable and then we usually just give them away.  In the last 35 years we’ve gone through a total of 4 vehicles.

So to me, the depreciation argument doesn’t carry much weight is I expect to get nothing for the vehicle when I get rid of it. The cost of taking our own car is really the added cost of gas, minor added maintenance that is mileage related, and that’s about it. For a vacation, it’s going to be cheaper to just drive what we have.

[HMman]

Well, a quick Google search for accident rates/km lead me to this, from the AAA:

https://aaafoundation.org/rates-motor-vehicle-crashes-injuries-deaths-relation-driver-age-united-states-2014-2015/

I don't know how old you are, but I'll assume 25-29 based off the fact you have a new car. So, the average likelihood of your getting in an accident per 100 million miles is 526, or 0.00000526/mile. I assume you're in the US, as well, so these stats are somewhat applicable.

Let's calculate the expected value of the premium loss. To make things easy, let's assume absolute worst-case scenario using your numbers: you pay $250 more every year, for the rest of your life, adjusted for inflation. So, you pay an extra $250/year * 60 years = $15 000.

So, what's the expected cost of each option? The rental is easy: your budgeted $500. The cost of your own car can be calculated by the likelihood of the event, times the cost. That works out to $15 000 * 0.00000526/mile * 2700 miles = $213.03. Even assuming a wildly unrealistic amount of extra money paid on premiums, that's still less than half the cost of the rental car.

This intuitively makes sense - if the cost savings of renting a vehicle were much more than driving your own car, rental agencies wouldn't be able to make money (excepting people like ketchup who drive the crap out of their rentals, but you're not doing that).

You're letting your fear of an unlikely event sway your decision. Don't do that.

[mm1970]

when we downsized our giant SUV last year we did the math. To replace our old giant SUV with a new SUV vs. a new smaller car, it would take 48 weeks' worth of SUV/minivan rental to break even. That doesn't even account for the extra gas, more expensive tires, etc. We like to do longer roadtrips and will probably do some in the next few years, but we'll rent a minivan or SUV for those specific trips. We still didn't go especially mustachian with our new car (CRV) but it does get the same gas mileage as my 2008 Honda Civic and was a big compromise for my husband. Incremental progress is still progress after all.

I lost you somewhere in the middle. But if I read correctly, the comparison was new SUV vs smaller car and the difference between those was 48 weeks ? Thats steep.

Also you mentioned that you would still rent for the trips, any particular reasons ?

New big SUVs are expensive and cost a lot in gas too.

I'm not FireHiker, but I did just rent an SUV for the first time for our last road trip.  It was awesome, primarily for space reasons.

When you are commuting, or dropping kids off at school or activities, who cares if you are in a Civic or a Matrix.  You are only in the car for a few minutes.  Even making an hour long trip for fun isn't so bad.

But for a road trip that is multi-day, and includes luggage, maybe a cooler, sometimes camping gear?  And many hours in the car?  Renting a larger vehicle = MUCH better.  My kids are 13 and 6, and not very big!  But this last rental had bucket seats and they literally could not touch each other in the back seat = priceless!!

When we go camping with the Matrix and the Thule box, it's tetris.

[FireHiker]

I lost you somewhere in the middle. But if I read correctly, the comparison was new SUV vs smaller car and the difference between those was 48 weeks ? Thats steep.


Also you mentioned that you would still rent for the trips, any particular reasons ?

Happy to clarify. Full disclosure: we're really more Boglehead-lite than Mustachian, and as such we did buy a new CRV last year. Compromise in the interest of family harmony...I drive a 2008 Honda Civic and my husband previously drove a 2009 Honda Pilot (both bought new with cash at the time). I'm thrilled he was willing to go so much smaller.

Our comparison was downsizing to a new CRV (one step up from base model) vs. buying a new Pilot or Odyssey which, honestly, we wouldn't really do at this point in our lives. We used the heck out of the old Pilot between long family road trips (kids are now 7, 9, and 18), regular carpooling for school and sports, lots of camping. It was a great vehicle that we used extensively, but the gas mileage sucked, it had all kinds of weird electrical issues which we as two electrical engineers spent a lot of time trying (and failing) to solve, and with the 18 year old driving with his own car we weren't really using it to its full extent anymore.

We did the math and determined that the difference in price was equivalent to 48 weeks of renting a minivan/SUV for longer trips. Since buying the CRV we also acquired a dog...a large dog. We use the CRV or Civic for around town and the CRV is fine for smaller trips, but if we do a long camping road trip more than a weekend we'll probably rent a minivan, unless we need 4WD in which case we'll rent an appropriate vehicle. The motivation is space with what will now be two kids, large dog, and camping gear. Renting a larger vehicle for a couple weeks on a summer road trip is far superior to paying for that larger vehicle when we only need it a couple weeks each year.

I totally agree with mm1970 as well; bucket seats where kids are not touching each other on a long roadtrip is well worth the rental expense for a longer trip with loads of gear!

[Dee18]

You can avoid the insurance charge on a rental by using a credit card that covers it.  I think Chase Sapphire is one that does.

[BudgetSlasher]

If am going to do all of the driving we take my car; its newer (2014 with 50k and only 7k or so on the motor). Its personal preference, I like my car (and I like driving it better than most economy rental cars) and its been reliable to date; also I view cars as pretty much a sunk cost, they won't have much value left in them when I dispose of them (due to age the mileage won't matter much) and in the 5+ years I have owned my car over 25% percent of the miles are vacation/trip miles (I fully expect the road salt will do it in before the mileage becomes an issue).

Now if we both need to drive (the DW is not comfortable with a manual, like my car) a longer distance trip we may rent. Again this is a personal preference, her car is dead nut reliable at 160k, at that age the rattles, the road noise, the wind noise from the bad door gasket, and the worn foam in the driver's seat make it uncomfortable to drive for more than a couple hours. It makes its fine daily commuter, but a long distance trip, I'll take a more comfortable rental.

Now if I am going to put an oil change worth of miles on a car in 2-3 days, I may rent simply to avoid the hassle and cost of doing an oil change.

[BussoV6]

If not flying to a destination where I need a car, always prefer to drive my own car than a rental, if possible.

Depreciation isn't a factor for me as I keep the vehicles for a long time and milage is not that important. The variable costs of operating my own car will almost always be less than a rental fee.

[VTKate]

I know this thread is focused on summer vacations, but just a note that (at least in VT), the rental cars don't get winter tires on them. I'll rent for a roadtrip if the weather looks good but if there's a chance of snow I stick to my own car w/snow tires

[HMman]

I feel like a lot of answers are missing the OP's original question. Yes, if you need a different car than you have, by all means rent one. Far better to own a little, fuel-efficient car and rent a big SUV occasionally than own the SUV, for example. If you're renting for the sake of renting, with a similar car getting similar mileage, you're a consumer sucka. Unless you live in some sort of Mad Max dystopia, the fear of accidents is >>>>> the actual statistics.