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Summer is the season for road trips.
Up to 70.9 million Americans are expected to travel by car during the Fourth of July holiday week alone, according to AAA.
Renting a car for a road trip may be financially smarter for some car owners than using their own vehicles, experts say.
“It will depend largely on a variety of factors,” said Greg Brannon, AAA’s director of automotive engineering research.
These factors include your current vehicle's fuel economy, the distance you'll be driving, how long you'll be away, whether you lease or own the vehicle, and the size of your vehicle, among other things, according to Toyota.
Here are some key considerations.
car specifications
Car capacity is the “go-to” when it comes to deciding whether to lease a car, said Brian Moody, editor-in-chief of car shopping site Autotrader.
It's easier to say, 'I have a five-passenger car and I'm going to take eight of them on the trip,'” Modi said.
Drivers may also need to compare specifications, such as whether a two-wheel drive vehicle is required versus a four-wheel drive vehicle, as well as storage space for luggage and equipment.
Operating costs
Here the calculations get more complicated. There are many financial costs, some obvious and some less so.
Drivers will need to compare the total rental costs – the daily rental price and potential extras such as insurance – against the costs of running their own car.
“Most people would be shocked to learn how much it actually costs to own and operate their car,” Brannon said.
Fuel costs, such as gasoline or electric charging, are a financial consideration for both renters and car owners.
It may be possible to lease a more fuel-efficient car and save money. For example, leasing a car that gets 40 miles per gallon compared to a car you currently own that gets 20 miles per gallon would cut your fuel costs in half, all else being equal.
“If you have an older car that's not very fuel efficient, it might make sense to lease something,” Modi said.
Rental costs
The average rental cost is expected to reach $42 per day in the second quarter of 2024, with most travelers looking for four-day rentals, according to travel site Hopper.
The daily rate can be higher or lower depending on factors such as the rental company, type of car, and pickup and drop-off location.
Car rental insurance can add $30 to $61 to the daily rate, depending on the type of insurance, according to Allianz Travel, citing MarketWatch data.
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Renters who want to have insurance on their cars may not need to purchase additional coverage through the rental company.
Car owners may already have full coverage for rental cars through their own auto insurance policies, or they may get some coverage through credit card benefits, Brannon said.
“Call your insurance agent and make sure you’re covered,” he said. “You can save a lot of money by not insuring your car twice if you don’t need to.”
Depreciation and Mileage Limits on Leases
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Additionally, car owners who lease a vehicle should weigh factors like mileage limits before embarking on a long road trip. For example, a typical lease imposes financial penalties on drivers who drive more than 12,000 miles a year on their vehicle, according to Kelley Blue Book.
KBB said the cost of exceeding this limit typically ranges from 20 to 30 cents per mile. (At 30 cents, a driver would pay $300 for every thousand miles over the mileage limit.)
There are also consumption costs to consider.
Depreciation causes a car to lose value over time. Brannon says cars lose 10% to 15% of their value once they leave the showroom.
“Depreciation is the biggest expense of owning a car,” Brannon said. That’s why it’s so important for road trips, he says.
“The more miles a car has, the more it's worth,” Brannon said.
According to Allianz, every mile a human drives causes wear and tear on the engine, tires and other moving parts.
Depreciation affects all cars differently. According to Toyota, the average car depreciates by about 20 cents per mile.
For shorter road trips — say, 1,000 to 1,500 miles in a given year — depreciation may not be a big issue compared to rental prices, Autotrader's Moody said.
Depreciation is generally only important to people who plan to sell or trade in their vehicle in the future.
Vehicle condition
Unexpected repairs can be costly: The average roadside repair request is “well over $500,” excluding towing costs, Brannon said, citing AAA data.
Modi said there was less chance of breakdowns in rented cars, which were usually newer models. The average age of a used car on the road is about 12 years, he said.
While a mechanical problem might be inconvenient for anyone taking a road trip, renters will not be financially responsible (assuming they are not at fault), Moody said.
Brannon points out some questions drivers should ask: Have I done a good job maintaining my car? Is it ready for long days on the road? Are the tires in good condition? Is it mechanically sound? How old is it? What safety technologies are in the car?
