If you don’t use a car regularly, you may wonder whether you should rent a car when needed or purchase your own vehicle.
Scenario 1: Living in a Big City
If you live in a big city with excellent public transportation like New York, Boston, or Chicago, you may not need to buy a car; you can meet your daily needs within the city using public transportation. In fact, in New York, over 100,000 people share just 2,000 cars.
In many cases, public transportation may be more efficient than trying to drive a car in traffic. Public transit preserves land, encourages mixed-use development near transit stations, promotes ride-sharing, and often reduces the distance, time, and fuel needed to get to your destination.
If you’re planning a road trip or need a car for one day in such a city, renting a car regularly may be cheaper than owning one. For example, renting a small car for one day in Boston in February 2020 could cost you around $58 at Thrifty Car Rental or $56 at Enterprise. Multiply that by 12 for an approximate annual cost of less than $700. A mid-size small car costs about $22,000 as of January 2020.
If you add in the cost of car insurance and parking permits or meters, and designated parking in addition to your rental, it may not make sense to own a car at all.
Scenario 2: You’re Taking a Road Trip
Whether you’re traveling to the next city or state, renting a car can make the trip easier by avoiding the hassle of driving a car you own and saving money by not flying.
This could be a good idea if you don’t own a car, or if the car you do have is unreliable, or if your car is capable but you’d prefer to put the mileage on another vehicle.
It’s common for companies to offer what’s known as collision damage insurance; if you pay for this coverage and have an accident during your road trip, the company will provide your insurance and cover the repair costs without affecting your personal insurance rates.
It can be fun to choose a new or different car from the one you’re used to driving; you can consider renting the car as an extended test drive while on your road trip. This can help you make a smarter purchasing decision when you decide it’s time to buy a car.
You can save money on these rentals through auto clubs like AAA or professional organizations or alumni associations. You might also consider booking a car through a travel site or bundling hotel bookings and flight tickets to find deals.
Be aware: Renting a car when you are under 25 years old costs more, so budget extra when weighing the cost of renting a car versus buying one if you are under that age.
Scenario 3: You’re on Vacation
People often think of renting a car once they arrive at their vacation destination, and this can be a useful option if you are traveling to a place where you don’t know anyone else and thus can’t easily borrow a car.
Many car rental companies offer roadside assistance, meaning you have extra protection from the company in case your rental car breaks down on the road in an unfamiliar location.
Renting a car can provide you with flexibility and convenience while exploring a new area.
Car instead of using a car you bought is a particularly worthwhile option if you are traveling with several people and can’t all fit in one vehicle. Instead, you could rent a large truck to travel together and split the cost.
Scenario Four: You’re Running Your Errands
Car-sharing programs at rental companies like Enterprise allow you to rent a car by the hour, making it easy to skip buying a car and simply rent one when you need to run your daily errands. This option is worth considering if you don’t drive enough to justify buying a car, but can’t find a truck or large vehicle to borrow regularly from a friend.
For example, you could set aside half a day or a day each week, or even a weekend each month, to accomplish all your errands, such as going to the grocery store, the post office, the bank, or the gym.
Similarly, you can rent a car to purchase one large item, such as a television. This option may be cheaper than paying for the shipping of a large item to your home.
To increase the potential savings from this arrangement, share the rental cost with friends if several people need to run errands at the same time. By coordinating your efforts, you can all save money and help each other out.
Scenario Five: Special Occasion
For special occasions, you might consider renting a car as an upgrade from the old car you may own. For example, if you plan to propose or if you’re attending a fancy event and your current car won’t suffice, rent a car for the day instead.
Renting a car regularly throughout the year might compare favorably to purchasing a luxury vehicle for everyday use. For instance, renting a luxury car for two days in New York City in June 2020 may have cost around $202 at Thrifty Car Rental and $227 at Enterprise. The average cost of purchasing a mid-sized luxury car was $40,000 in January 2020.
If you are renting a car through a car service, search online for a Groupon deal or event discount. These discounts may allow your guests to qualify for reduced rates on car rentals for occasions like weddings or family reunions.
Updated by Rachel Morgan Cotter.
Source: https://www.thebalancemoney.com/can-a-car-rental-save-me-money-2385841
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