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    Points To Reflect On Before Leasing A Vehicle For Your Upcoming Road Journey

    An estimated 70.9 million citizens from the United States are predicted to engage in road travel exclusively during the week of Independence Day, as indicated by AAA.

    For certain automobile possessors, it might be more economical to rent a car for a journey rather than utilizing their personal vehicle, as recommended by experts.

    “It hinges on various factors,” according to Greg Brannon, AAA’s head of automotive engineering research.

    These factors encompass the efficiency of your current vehicle, the length of your excursion, the duration of the trip, whether you lease or possess the vehicle, and the dimensions of your vehicle, among other factors, following advice from Toyota.

    Below are some significant aspects to contemplate.

    Specifications of the vehicle

    When contemplating the decision of whether to lease a vehicle or not, the capacity of the vehicle is pivotal, mentions Brian Moody, executive editor of Autotrader, an online automobile marketplace.

    It’s simple to assess by pondering, “My car seats five passengers, but there are eight individuals joining the trip,” exemplified Moody.

    Motorists should also take into account aspects like the requirement for a two-wheel-drive versus a four-wheel-drive vehicle and the availability of storage space for luggage and equipment.

    Expenditure on operations

    This is where the calculations may become slightly intricate. There are diverse financial expenses to evaluate, some apparent and others not so overt.

    Motorists will need to weigh the overall leasing expenses – comprising the daily leasing rate and possible extra services like insurance – against the costs of utilizing their own vehicle.

    “The actual expenses of owning and operating their car may astonish most people,” stated Brannon.

    The costs for fuel, whether it be for gasoline or electric charging, are factors affecting both lessees and vehicle owners alike.

    Opting for a more fuel-efficient rented vehicle might potentially save money. For instance, selecting a rental car that attains 40 miles per gallon instead of one that achieves 20 mpg, would halve the fuel costs, given all other factors remain consistent.

    “If you own an older vehicle that lacks fuel efficiency, it could be more economically feasible to rent something else,” recommended Moody.

    Leasing expenses

    In the second quarter of 2024, the average daily leasing expense stood at $42, with most travelers seeking four-day leases, according to Hopper.

    The daily rate can fluctuate based on factors such as the leasing company, car model, and collection/delivery points.

    Lease car insurance might increase the daily rate by $30 to $61, contingent on the form of insurance, as per Allianz Travel, referencing MarketWatch data.

    Lessees seeking car insurance may not necessarily need to purchase supplementary coverage from the leasing firm.

    Vehicle owners might already possess comprehensive coverage for a leased vehicle through their auto insurance policies or credit card benefits, Brannon stated.

    “Reach out to your insurance representative and verify your coverage,” he advised. “By abstaining from dual insurance on the vehicle if unnecessary, you can evade needless expenses.”

    Depreciation and boundaries on mileage for leases

    In addition, individuals with leased vehicles should take into account aspects like mileage restrictions before commencing a lengthy road excursion. Exceeding the standard lease mileage cap of 12,000 miles annually could lead to financial penalties, as disclosed by Kelley Blue Book.

    The charge for surpassing this threshold usually lies around 20 to 30 cents per mile, according to KBB. (At 30 cents per mile, a motorist would incur $300 for each extra 1,000 miles beyond the cap.)

    There are also considerations regarding the devaluation of the vehicle to factor in.

    Depreciation signifies a decline in the value of a car over time. Automobiles typically lose around 10% to 15% of their value once they are driven away from the dealership, highlighted by Brannon.

    Depreciation is viewed as “the most substantial cost of owning a vehicle,” emphasized Brannon. Hence, it is crucial to consider this aspect for road trips, he stressed.

    “As you increase the mileage on the vehicle, its devaluation rises,” elucidated Brannon.

    Each mile leads to added wear and tear on the engine, tires, and other components, consistent with Allianz.

    Depreciation impacts vehicles differently. On average, a vehicle depreciates at approximately 20 cents per mile, as informed by Toyota.

    For shorter road journeys covering distances between 1,000 to 1,500 miles per year, depreciation may not be of significant concern when compared to leasing costs, hinted at by Moody.

    Depreciation typically holds more weight for individuals planning to vend or trade in their vehicle in the future.

    Condition of the vehicle

    Unanticipated repairs can incur substantial expenses: The average repair fee during a journey totals over $500, excluding towing expenses, based on AAA data referenced by Brannon.

    The likelihood of a breakdown is lower with leased vehicles, which usually consist of newer models, noted by Moody. The average age of a pre-owned car on the road is around 12 years, he pointed out.

    While a breakdown would be inconvenient for anyone on a road trip, renters typically do not bear the financial responsibility (assuming they are not at fault), according to Moody.

    Brannon proposes that motorists question themselves on various facets: Have I adequately maintained my vehicle? Is it suitable for extended journeys? Are the tires in good shape? Is it in good mechanical condition? How old is it? What safety functionalities does it provide?

    Image Source: alexfan32 / Shutterstock

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