How Much Do You Value your Car Miles

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The source of my quandary is that I'm taking around a 700 mile driving trip in a couple weeks and can rent a car for around $80 for the entire weekend (I've looked, it's the best rate, even digging into the car rental thread, being 24 is a bitch sometimes). Under .12/mile seems like a bargain to depreciate somebody else's vehicle, but on the other hand I have a paid off car with only 84k miles, runs great and I plan on driving it until it dies.

There are a lot of different potential schools of thought that I can think of:

1. If you have a fully paid off car that you intend to drive into the ground, you value your appreciation near zero, because your maintenance expense is basically fixed as is insurance, etc. All you're doing is accelerating your car's ultimate demise

2. If you have a lease - are you going to go over or under your allotment. If over - the cost per mile you will be charged. If under - 0, it's not your problem.

3. If you're actively flipping cars - Some value, the more miles on the car, the lower the resale value

4. If you have a crown vic, who cares, they run forever.

5. If you make the following assumptions of a car's value/useful life of $25,000 for a new car that you'll drive for 150k miles (or some similar thing) then if you can spend less than 17 cents per mile, you should always rent (obviously, you can change the cost or useful life to taste).

Thoughts? How much do you value the miles you put on your car at?

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Pretty much any other 5-seater would get better mileage than the FJ, which only got about 19-20 mpg even though most of ... (more)

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No, the early miles cost more than the later miles, always. Take the formula you guys have come up with, calculate how ... (more)

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One thing you could do is go to Edmunds.com, use their used car appraiser, and punch in the mileage with and without the trip and see what it does the the valuation that it provides.

Personally off the top of my head, $0.12/mi sounds cheap. Any difference in gas mileage between the two cars? Factor that in for costs as well.

kwest said:   One thing you could do is go to Edmunds.com, use their used car appraiser, and punch in the mileage with and without the trip and see what it does the the valuation that it provides.

Personally off the top of my head, $0.12/mi sounds cheap. Any difference in gas mileage between the two cars? Factor that in for costs as well.


In my specific case, I get around 30 mpg highway and would expect anything I would rent would get about the same. I'm not shoehorning my 6'6" self into a compact car.

IMHO this is a no-brainer. The car rental company will give you a new car if the rental car breaks down. Your 84000 mile car breaks down and you are on your own a long way from home.

Plus, it actually costs somewhere between 50 cents to a dollar to drive a car when you figure in all the costs.

And, if you use the right credit card to pay for the rental you get some additional insurance coverage at no cost.

I have broken down several hundred miles from home and it ain't no fun.

^^I totally agree. Rental car all the way. Car trouble always seems to happen when you are far from home.

I rented a crown vic to drive from LA to Vegas over new years for 12 dollars a day. Came out to like 7 cents/mile + gas.

Peace of mind worth it. I trust a rental over my aging car.


EDIT: I lied, i just checked mint, it cost me 31 dollars for 3 days. So it is more like 5 cents a mile.

jd2010 said:   I rented a crown vic to drive from LA to Vegas over new years for 12 dollars a day. Came out to like 7 cents/mile + gas
It wasnt a "free ride" in the back of a Crown Vic?

What about the chances that the rental car company tries to charge you for damage that you didn't do? And how much do you value the comfort of your own car?

Your ownc ar seems like the much better option to me.

and you don't have to be gentle with a rental.

mwa423 said:   The source of my quandary is that I'm taking around a 700 mile driving trip in a couple weeks and can rent a car for around $80 for the entire weekend (I've looked, it's the best rate, even digging into the car rental thread, being 24 is a bitch sometimes). Under .12/mile seems like a bargain to depreciate somebody else's vehicle, but on the other hand I have a paid off car with only 84k miles, runs great and I plan on driving it until it dies.

There are a lot of different potential schools of thought that I can think of:

1. If you have a fully paid off car that you intend to drive into the ground, you value your appreciation near zero, because your maintenance expense is basically fixed as is insurance, etc. All you're doing is accelerating your car's ultimate demise

2. If you have a lease - are you going to go over or under your allotment. If over - the cost per mile you will be charged. If under - 0, it's not your problem.

3. If you're actively flipping cars - Some value, the more miles on the car, the lower the resale value

4. If you have a crown vic, who cares, they run forever.

5. If you make the following assumptions of a car's value/useful life of $25,000 for a new car that you'll drive for 150k miles (or some similar thing) then if you can spend less than 17 cents per mile, you should always rent (obviously, you can change the cost or useful life to taste).

Thoughts? How much do you value the miles you put on your car at?


1. Renting a car is spending money that could have been used on future maintenance. It's lost money and your car is going to need the maintenance eventually anyway.

2. The more your car sits, especially for an extended length of time, the more issues you potentially can have once you start to drive it again.

3. Your car can last a hell of a lot more than 150k miles. I think my father's 1979 Dodge pickup flipped its 99,999 speedometer 5 times. Just keep it maintained. Yes, you'll need to maintain the car, but as long as you do, it should last.

4. Renting a car? One word: Biologicals.

5. No one cares for rental cars. They are driven hard and put away wet.

6. I know how my car is treated each and every day. I would trust my older, high-mileage car a lot more than a rental.

Now in your case, if it's just a one time trip that's only a few days... sure, go ahead and rent. However if you plan to drive your car into the ground, what do you care about the miles that are put on it? 150k isn't the magic Death Date of your car. Your car could die the day after you get back from your trip on the way home from dropping off the rental.

Save the 80 bucks.

I personally value $0. But if I drove German I guess I would pay the $80 to rent.

($20,000PURCHASE+$5,000 MAINTENANCE)/ 200,000MILES = 12.5 CENTS PER MILE IS THE VALUE OF MY CAR MILES

ensignlee said:   What about the chances that the rental car company tries to charge you for damage that you didn't do? And how much do you value the comfort of your own car?

Your ownc ar seems like the much better option to me.


I will presume you have never broken down on the road.

Take the ripoff damage coverage if you're worried about hurting the rental car.

Priceless

qcumber98 said:   and you don't have to be gentle with a rental.I think you've got the beginnings of rap song there

I vote for the rental also.

That's what we do when we go to Key West every year, we live in Orlando and can usually get a car for <$100 for week in October.

I don't know why I never thought to consider how much per mile I've paid to drive my current vehicle. I think I'm at about $0.35/mile driven (an 05 Ford Focus hatchback with about 67k miles), or, for the length of time I've had it, or about $8/day (including a rough estimate of cost/maintenance, not including insurance or gas). Of course, both of these calculations don't factor in that the car still has value.

I'd be fine with driving my own car that far, even if it was 700 miles each way and not round trip.

I like to keep my car in the garage and rent on long trips. Of course, I racked up 4500 miles of driving in my 2011 summer vacation (two weeks from Texas to Massachusetts and back). Instead of having 6500 miles on my 2011 Civic, I'd instead have 11,000. Previous year was Texas to Northern California w/ lots of off-road driving in the mountains and deserts. It was well worth the piece of mind going across to Mojave in a newer car when it was 115 degrees. Plus, you might get lucky and get satellite radio, or some other amenity you don't have.

I have another angle on this...

I bought my car to drive it. Anytime my company makes me rent a car instead of driving my own I squirm. Yes, everyone at me looks fine funny and think I'm out of my mind, but I have rented (on business) pretty much the entire 2011/2012 Dodge and Chevy line-up and nothing drive like my 5 Series (E39) with 235k miles. I look forward to any trip in the hundreds of miles in my own vehicle.

Then again, I guess I'm one of the rare folks that actually enjoys driving, and not just getting from point A to point B. As far as breaking down - keep your vehicle properly maintained and get AAA.

According to the IRS http://www.irs.gov/newsroom/article/0,,id=250882,00.html

Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

55.5 cents per mile for business miles driven
23 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

kwest said:   Personally off the top of my head, $0.12/mi sounds cheap. Any difference in gas mileage between the two cars? Factor that in for costs as well.

You might as well throw in a penny or two per mile for tires.

How do you value the time and cost of getting and returning the rental car? Do you need a buddy to give you a ride to the rental company, and also pick you up?

Cash expenditures for rental are immediately additive and carry an opportunity cost. Depreciation can be discounted into the future when the asset is disposed. Alternatively, you could add interest to the cast you save by not renting.

if you plan on keeping your car the miles don't matter as much as the condition of the engine. if you only drive short trips and never heat up the engine it'll cause you lots of problems in the long run with carbon buildup.

i would pour some fuel injector cleaner (chevron techron) in the gas tank and drive the car hard on your trip. google "italian tune up" to see the benefits of heating up the engine to burn off the carbon deposits.

i was actually told by the vw dealer mechanic to drive our passat harder because there was substantial carbon buildup in the engine. they tore the engine apart and scraped off all the carbon off the cylinder head and valves because the check engine light kept coming on for pre-ignition. it was covered under the certified preowned warranty. i bought the 3 yr old vw passat with 28k miles for my daughter and it came with 3-yr additiona warranty for certified preowned cars. apparently the previous owner only took short trips with the car.

you also need to add in the time you spend reading this thread. this is getting a little intense for me.

ensignlee said:   What about the chances that the rental car company tries to charge you for damage that you didn't do? And how much do you value the comfort of your own car?
.


Rent from a corporate-owned major rental agency and you'll be fine. I rent frequently and have never had this issue.

Comfort is a good point if you drive something smooth like a Lexus LS. Hard to go back to driving a regular car for long distances after you've been adjusted.

MrKlick said:   IMHO this is a no-brainer. The car rental company will give you a new car if the rental car breaks down. Your 84000 mile car breaks down and you are on your own a long way from home.... I have broken down several hundred miles from home and it ain't no fun.
Breaking down anywhere in route is horrible, whether or not it is your own car. Sure with a rental you don't have to worry about coordinating repairs or finding a repair shop in an unknown area. However, even in a rental being broken down on the side of the road in the middle of no where is still a major problem. I doubt enterprise will pick you up quickly in the mountains of West Virginia. If your personal car breaks down you can get a rental just as easy as you can get a replacement to a broken rental.
Furthermore, I am of the opinion if your car cannot reliably drive 700 miles it is time to either make repairs or get a new car. Long-distance driving is not particularly harder on a car than driving around town.

When I was younger, I rented because my car was an older one. Nowadays I just drive mine. 700 miles is not much and not hard on the car compares to driving to work.

jkimcpa said:   I personally value $0. But if I drove German I guess I would pay the $80 to rent.

really? i think it' more fun driving a Mercedes or BM than a rental car.
i also feel safer in a Mercedes! haha

Quite frankly, this is a apples vs orange comparison.
Does the $80 fee include LDW?
Does your car insurance cover the damages as if it were your car?
Does your insurance company provide roadside assistance on a rental?
Also, what is the guarantee that you'll get an economy car with a good mpg?

Couple of months ago I rented out a car while on vacation in Hawaii and had signed up for a economy car. Sure enough, the rental car company gave me a Jeep as that was all they had left. It was no fun paying $4.79 per gallon for a Jeep.

OP your math is wrong, and its a big issue too.

When deciding whether to rent or not you don't use an initial purchase price you incurred long ago. You use what its value is today which isn't going to be $25k.

I'll give you the formula under these assumptions:
1) You intend to drive it into the ground
2) Its useful life you estimate to be 150,000 miles
3) Its estimated current value at 84k miles is ~$6k(if a car can be bought new for $25k and is only expected to live to 150k miles then it's probably this low for current value)
4) Its estimated total repair risk/cost for the rest of its life is ~$2k

Formula is:
(estimated current value + estimated total repair risk for life of vehicle) / (Estimated Useful life of vehicle - current mileage)= the true value of those miles.

So your looking at ($6k+$2k)/(150,000-84,000 miles) = 12.12 cents a mile
If you change your expected life to 200,000 miles than its:
($6k+$2k)/(200,000-84,000) = 6.9 cents a mile
Even if you add another $1k onto value and repair risk/cost its
($7k+$3k)/(200,000-84,000) = 8.6 cents per mile

And this all should make sense to you because mileage early into the lifespan of a car is worth a lot more than mileage later in the lifespan of a car.

Note: Didn't include differences in miles per gallon into the calculation, but that isn't hard either.

My car is 12 years old and has nearly 188k on it, so I don't care about miles from a wear and tear standpoint.

My car also gives me no reason to believe it will leave me stranded on the side of the road. My wife's 2005 with 77k on it is just as likely in my book. Anything can break down. I'd have no problem taking my car up to see my parents in NY, about 700 miles round trip. Heck, I cover about 100 every day in it commuting. When the day comes when I feel worried that it won't start at 5AM when I embark for the office, I'll be looking for another car.

IMO, renting is worth it if:
1) Your daily driver is impractical for a road trip for some reason like size, fuel economy, or expected conditions. If you never see snow and are driving into an area with potential for snow, and your ride is an M3 with summer tires you leave on all year, you might want a rental.
2) Your daily driver regularly leaves you stranded, which makes me wonder why you still have it, but still you might want to leave it at home.

I always rent a car when I take weekend road trips. I can get a car for half that. Just out of curiosity, where are you renting from?

Have you also calculated in all fees, taxes, gas, etc on the car rental??

yaijic said:   Have you also calculated in all fees, taxes, gas, etc on the car rental??

The only of value on the gas issue is the difference between MPG on the trip otherwise gas will be paid one way or another.

At 84k the value per mile is pretty low but if you do go for the rental then you will have to worry about any damage that happens or damage that you happen not to see when you get it.

I don't rent often, but when I do, I get scared of hitting/nicking ANYTHING. And I have a Dos Equis after the drive.

qcumber98 said:   and you don't have to be gentle with a rental.

Mules will agree.

Priceline a car and think of it as part of the vacation. Drive something you would never buy or afford to buy. Treat yourself.

not being genlte with the rental results in bad gas mileage... keep that in mind.

what kind of roads are on the 700 mile trip? if its all highway why not use urs. In the end, what would saving your own car do anyway. like previous users mentioned, car eventually needs maintanence regardless of miles. and you paid for the car already, why not maximize it's life. if its going to run until 150k what difference does it make if it is this yr or next. unless this is your last car forever and you don't plan to buy another car after this.

Couple updates,
p wit
I was trying to make this more than just about me (something people could apply to their own situations as well) but in my case.

To answer a few questions:
-I drive a Malibu which I have no doubt could make the trip without a problem (I've taken 4 10 hour round trips in the last two months).
-The drive is all highway.
-The rental would only be around $50 all included, but sadly being 5 months away from 25 I'm paying an underage charge as well (strangely, paying the underage charge with Budget this time around is cheaper than National or Hertz with a code that removes that fee, go figure).

mwa423 said:   Couple updates,
p wit
I was trying to make this more than just about me (something people could apply to their own situations as well) but in my case.

To answer a few questions:
-I drive a Malibu which I have no doubt could make the trip without a problem (I've taken 4 10 hour round trips in the last two months).
-The drive is all highway.
-The rental would only be around $50 all included, but sadly being 5 months away from 25 I'm paying an underage charge as well (strangely, paying the underage charge with Budget this time around is cheaper than National or Hertz with a code that removes that fee, go figure).


Again read my math above and you'll realize that from a financial standpoint taking the rental for $80 is a mistake.

Skipping 70 Messages...
jd2010 said:   This isnt hard.

(PV - FV(at death: if any) / estimated life of car in miles til death + cost of maintenance/ miles per maintenance or tuneup + cost of tire set/ miles per tire set + cost oil change / miles per oil change = rough value/mi

Example, my car:

(6000 - 500) / (100000) + 400/15000 + 500/20000 + 40/5000 = 11.5 cents/mi

YMMV

eron08 said:   dshibb said:   But again still doesn't get around the fact that earlier miles are worth more than later miles on the same car. I will grant you that it's at least an interesting way to look at it though.
I would say that early miles cost more than later miles only if you're a re-seller and only bc of asymmetrical info. The first few miles cost a lot to a reseller bc when he tries to sell after 10k miles people assume there's something wrong with the car.

Otherwise, the first mile shouldn't be worth more than the last mile. If you're not a reseller then there is no market asymmetry and every mile is equally valued.

No, the early miles cost more than the later miles, always. Take the formula you guys have come up with, calculate how much you're paying per mile at 25k miles. Then calculate it at 50k miles. They'll be different.

If you say the miles cost the same regardless of whether you put them on at 25k or 50k, then at 50k you're retroactively devaluing the cost of the earlier miles. That doesn't make sense.

The car's value does not depreciate linearly, so you can't take a simple average using the purchase and sale/junk value end points. You have to do an integral of the depreciation curve (basically the change in resale value between two mileages). The easiest way to do this is to take the blue book value at its current mileage, and the blue book value after you've added on the miles for the trip. The difference is how much of the car's value you "use up" during the trip. (Or if the blue book values don't have that much granularity, the value after a year's worth of miles, then figure what fraction of it is consumed by the trip.)

Late in a car's life when it doesn't have much resale value, the maintenance and insurance amounts far exceed depreciation, so you can get away with a linear approximation (you're in the tail end of the depreciation curve, and can approximate it with a triangle). But at 84k miles the car still has a significant amount of value left to depreciate.

If it's a company car or a lease, it's easier as those are depreciated linearly. So there is no integral and the purchase value minus final value method works. But that's an artifact of the financing structure, not a representation of the car's true value. Basically you are pretending the car depreciates more slowly than it actually does when it's new, and more quickly than it actually does when it's old, to make the depreciation linear. Then you get the result you guys are proposing. The problem with using it outside of a fixed financing term is that all that goes out the window every time you move the end point (you retroactively devalue the earlier miles every time you extend the end mileage).

To OP: Generally I drive my car (like your car its paid for, at 96k miles, and I'll probably use it for 5-10 more years). But if I can rent a different model car I might want to buy, I'll do the rental as an extended test drive. I think the intangible value of knowing how a car model behaves over an extended drive adds enough to outweigh the cost of the rental over driving my own car.



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