Choosing Between Your Car And A Rental

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If you're planning a long road trip this summer, consider ditching your own car for a rental.

With gasoline prices rising above $4 a gallon
on average across the US and analyst predictions oil may be $150 a barrel by Independence Day, the cost of driving is getting more and more expensive.

As a result, many people are considering cutting back on the amount of driving they plan to do this summer and staying closer to home in order to save money. For those who are still planning summer road trips, one way to save may be to head out on the road in a rental car from a place like Avis (CAR), Hertz (HTZ) or Enterprise.

While rental cars are an obvious choice when you fly to your destination and need transportation once there, those who are leaving from their home rarely consider taking a rental car when they can use their own vehicle.

Before automatically opting for your own car, however, it's worth taking the time to run the numbers. You may be surprised at how much you could end up saving by renting.

Whether it makes sense to rent a car instead of taking your own depends a lot on the your car's gas mileage and how many miles you plan to travel. If you already own a fuel-efficient car, this won't necessarily make as much sense as if you own a vehicle with poor gas mileage, but still can if you plan to sell your car in the future.

Renting a Toyota (TM) Hybrid Prius instead of taking your own SUV can mean a difference of 30+ miles a gallon in fuel efficiency.

In this situation, the farther you plan to drive, the more appealing a rental car becomes.

Unless you are taking a long road trip, gas savings alone won't usually cover the price of the rental car. Even with a 30 mpg difference, driving 200 miles a day would save about six gallons of gas, or $24.

Taking into account maintenance and tire costs (estimated at $0.059 per mile) would add a savings of nearly $12 more, for a total savings of $36. For this price you can rent a fuel-efficient car, especially if you take advantage of the many available discounts.

Big savings can come into play if you plan to sell your car in the future. A car's value depreciates at an estimated $0.286 per mile. If you plan to drive 200 miles a day for a week-long trip, renting a car saves $400 on car depreciation by leaving 1400 miles off your own car.

Again, it's important to run the numbers for your specific situation, but taking into account maintenance and depreciation can make renting a car a good deal.

Whether it's for a long road trip or just to drive around town, if you are going to be getting a rental car this summer.

Here are a few other hints to help keep costs down:

Consider going green:

If you are going to be doing a lot of driving when renting the car, think beyond the smallest car that fits your needs. It may be a great chance to try out a hybrid model, since the higher gas mileage can compentsate for other charges.

Consider a GPS system:

If you'll be driving in unfamiliar areas, getting a GPS navigation system can save you time and money by keeping you from wandering around lost. GPS navigation systems will come with an extra charge when renting a car, so do your best estimation of whether or not it will end up paying for itself.

Find Coupons:

You should never rent a car without a coupon or discount, because they are easy to find. Many memberships such as AAA and AARP provide rental car discounts.

Coupon books such as the Entertainment Books will not only provide you with a lot of coupons for restaurants and attractions in your destination city, but also come with car rental coupons.

Warehouse clubs such as Costco (COST) and Sams (WMT) often have rental car discounts available as part of their membership.

If you can't find a discount anywhere else, simply do an Internet search for "car rental coupons," and you should be able to find some current car rental promotion codes being offered.

Downsize:

Rental car companies often offer "upgrades" to bigger cars if they are running low on the car model that you requested. In these cases, you get a larger car for the same price you originally paid for the car rental.

When gas prices were low, this was a nice perk, but it can now result in a significantly larger gas bill during your rental. If they don't have the car model you originally requested, opt instead for a car in the same class or a hybrid model.

Compare:

You should check all the rental car companies to see which one is offering the best deal. You should also check different rental car locations for the same company in the same general area (similar to checking different airports in the same area for the best air fares) to see if you can get an even better deal.

Rental car lots located at airports often have extra airport tax charges added to the bill and sometimes a particular location is running a special that others in the area are not.

Do a quick price check: On the way out the car rental lot, make a note of where the nearest gas station with the best price is located.

Gas stations several blocks away from the car rental lot will usually be quite a bit less expensive than those nearest the lot. Writing this down when you leave will ensure that you remember where the price jumps so that you can fill up the tank before you drop off the car without paying a premium price for gas.

It's good to get into a habit of running numbers for all your personal finance decisions and taking the time to look at the savings that a rental car may provide on your next road trip is a great way to start.

When you consider the rising cost of gas and the other less obvious costs of using your own car, a rental car can make a lot more sense than you may have first thought.

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