For long trips that last only a few days, it’s often cheaper to rent a car than to drive one you own.
But the decision to rent depends on many factors: the trip’s mileage, leasing costs, fuel efficiency, how much your car depreciates with each mile, tire wear, and the price of oil changes.
With all the factors you need to consider, leasing a car presents a complex decision. But here’s good news. I’ve created an online calculator that weighs those many factors with speed and ease. All you do is input a few numbers, click a button, and up pops an answer. If you’re planning a vacation for spring break, now’s the time to take this calculator for a short spin.
Road Trip Calculator Instructions
To improve the calculator’s accuracy, follow these tips.
Line 1: Trip Miles. When estimating your trip’s mileage be sure to include any driving around once you reach your destination.
Line 2: Rental Cost. Research rental prices online and input whichever offer you like best, including taxes. A ballpark estimate also works fine if you’re a frequent renter who knows the prevailing rates.
Line 3: Gasoline Expense. Project the price of gas for your trip. If you crave precision, visit GasBuddy.
Line 4: Fuel Economy (Part 1). If you don’t know how many miles your car gets per gallon, visit FuelEconomy.gov.
Line 5: Fuel Economy (Part 2). If you know the particular model you want to rent, visit FuelEconomy.gov. Otherwise, make a reasonable estimate based upon the rental’s size (compact, full-size, SUV, etc.).
Line 6: Tire Cost. Your tires suffer wear on road trips, bringing them that much closer to replacement. Input the cost of new tires, including sales taxes and mechanic’s labor. If you’re unsure of these costs, visit TireRack.com.
Line 7: Tire Longevity. Your tires might be under a 50,000 mile warranty, but don’t expect them to last that long. Rely instead upon your personal experience or make an estimate that’s at least 10-15 percent below the advertised mileage.
Lines 8-9: Oil Change Expense. Input the cost of oil changes and the miles that pass between them.
Line 10: Depreciation (Part 1). With each mile of travel, your car loses value, i.e., it depreciates. Although there are several ways to figure depreciation, I picked this one:
depreciation per mile = purchase price of vehicle whether bought new or used (including sales taxes) / predicted mileage of vehicle from date of purchase until it enters junkyard.
I chose this formula for several reasons.
First, this method treats your car like the wasting asset it truly is. Whether you buy new or used, your car’s worth ends up at salvage value.
Second, this website is about frugality. Frugal owners tend to drive a vehicle until it’s ready for the junkyard. Given this tendency, a wasting asset formula depicts depreciation better than market-based approaches (market values are irrelevant if the owner never sells).
Third, even for owners who plan to eventually resell their cars, my chosen formula provides a good proxy for lost market value. Moreover, it’s more convenient to use than a valuation website such as Kelly Blue Book.
To use the calculator’s depreciation formula, on line 10 enter the total price you paid for your new or used vehicle, including sales tax. (On the other hand, if you want to use Kelly Blue Book, see the instructions that appear at the end of this post.)
Line 11: Depreciation (Part 2). Most cars produced in the last decade enjoy lifetimes of 200,000 miles on average—and perhaps longer for ultra-reliable makes like Honda and Toyota. If you bought your car new, input whatever you expect for longevity (in most cases 200,000 miles). If you bought used, input the difference between the car’s expected longevity and its mileage when purchased (e.g., 200,000 – 65,800 = 134,200).
Road Trip Calculator: Rent or Drive My Own Car?
|1. Total Trip Miles:|
|2. Cost of Rental Contract:|
|3. Projected Gas Price During Trip (per gallon):|
|4. MPG of My Car:|
|5. MPG of Rental Car:|
|6. Cost of Tires for My Car:|
|7. Projected Tire Life (in miles):|
|8. Cost of Oil Change:|
|9. Miles Between Oil Changes:|
|10. Total Price Paid for My Car (including sales tax):|
|11. Lifetime Mileage for My Car (from purchase until scrapped):|
Calculate My Car vs. Rental
|12. Cost of Rental Contract (from line 2 above):|
|13. Cost of Rental’s Gas:|
|14. Total Cost of Renting a Car:|
|15. Cost of My Car’s Gas:|
|16. Cost of My Car’s Tire Wear:|
|17. Cost of My Car’s Oil Use:|
|18. Cost of My Car’s Depreciation:|
|19. Total Cost of Driving My Own Car:|
Sometimes the decision to rent depends on factors other than money. For example, you might need more passenger room than your own car provides. Or you might need more cargo space. Or if it’s winter you might want a four-wheel drive. Or if your car isn’t reliable, you might prefer renting something more trustworthy. Bottom line: before you blindly follow the calculator, think about any non-monetary factors that might affect your decision.
How to Calculate Depreciation Using Kelly Blue Book
Here’s a workaround if you want to focus on your car’s resale value. Input lines 1-9 of the calculator, then follow these steps.
Step 1: enter the number 1 on line 10. (Combined with Step 2 below, this causes your browser to show a zero on line 18.)
Step 2: enter the number 1,000,000 on line 11.
Step 3: click the calculate button.
Step 4: visit Kelly Blue Book, enter your vehicle’s information, and use the online estimator twice: once to gauge your car’s value at its current odometer reading and again at its expected post-trip mileage. The difference between these two values reflects your car’s depreciation for the road trip.
Step 5: add the amount from Step 3 to the amount on line 19 of the calculator. This reveals the total cost of driving your own car.
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If you’re interested in paying the lowest price on rentals, I’ve prepared a checklist that steers you in the right direction. Click here.
This post is designed to nudge you just a little further into the habit of frugality. This site’s other calculators seek to do the same thing. To explore their money-saving virtues, visit them here.
Photo by Jeremy Bronson