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Renting or Sharing a Car: Which Is Cheaper?

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Rental Cars Vs. Car Sharing - Which is CheaperIf you’re traveling to a big city, car share programs can be a tempting way to get around or take day trips. The premise is straightforward and sounds like a deal: You rent a car for a few hours, pick it up locally, and expenses like gas and insurance are covered. But are you really saving money over a standard rental car? While it’s nice to have another transportation option besides the basic traveler staples – taxis, the subway, trains, and buses – it can be difficult to suss out whether car share programs are really a great deal. Here’s the breakdown.

Enterprise CarShare, Hertz 24/7, and Zipcar all offer easy car sharing programs that sound incredibly alluring. Just reserve a car of your choice on your phone or online, walk a few blocks to get it, and return it without concerning yourself with the fuel gauge. The reality, however, is a little different. Despite the lengths these companies go through to make their offerings sound easy, understanding the charges and stipulations with car sharing programs is a complex affair. Furthermore, all three major companies charge almost exactly the same rates. So even though there’s competition, it hasn’t led to lower prices.

If you need a car for under an hour, these services will definitely save you. I’d recommend Hertz or Enterprise if they have a facility near your city. It’s cheaper up-front, and you’ll earn bonus credits towards all types of future rentals. Zipcar stands alone, so there’s not much draw if you’re a frequent user. In general, it’s safe to assume that these services will cost you around $0.45 per mile, or a maximum of $70 to $80 per day. If you need to make a slew of quick deliveries, you could easily rent one of these vehicles for one to two hours and be out $25 or less. But, keep in mind there is an extra overhead cost of membership and enrolling in their plans – this can be anywhere from $40 for Enterprise (right now they’re waiving their application fee and yearly fee for first-timers) to $60 at Zipcar.

However, if you’re planning to drive a great distance (or keep the car for more than 24 hours), you’ll realize that conventional car rentals often cost far, far less than $70-$80 per day. In fact, most cost just $30 or $40 per day at most. Insurance probably won’t be included, but the vast majority of credit cards today offer basic rental insurance if you use them to book your car.

Moreover, these new car sharing services advertise that “fuel is included.” This is true, but there’s a catch. While you’ll probably find your rental filled up, all of the major sharing companies will indeed charge you a fee (usually around $25) for returning a vehicle with less than 1/4 of a tank of fuel, so you can’t just park it and forget it after a long drive.

Lastly, many conventional car rental companies either completely disallow rentals to people under 25, or charge a fee (usually around $25 per day) to anyone between 21 and 25 years of age. Car sharing companies, on the other hand, typically allow renters within that age window – and in fact, some university programs allow renters as young as 18. For the younger set, a car sharing service will usually cost less.

If you’re looking for a general rule to follow, it’s this: city dwellers, particularly those between 21 and 25 years of age, who need to run a bunch of quick errands in a row will find car sharing services to be cheaper than using a cab or renting a conventional automobile for a full day. For those who plan to use a vehicle for over a day (or drive further than 200 miles), stick with a standard rental. Just be sure to pick up a credit card that adds insurance to rentals.

Have any other tips for saving money on car rentals? Let us know in comments!

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