My wife, Linda, and I usually rent cars when we take road trips averaging more than 200 miles per day. In the short run this is an added expense; in the long run we save money and stress.
The Internal Revenue Service currently allows a tax deduction of $0.55 per mile for the business use of a personal car. This rate covers the average cost of fuel and the average depreciation and maintenance.
Currently conservative figures of 20 miles per gallon at a price of $2.50 per gallon result in a fuel cost of less than $0.13 per mile. Subtracting the fuel cost from the $0.55 per mile average leaves $0.42 per mile for average depreciation and maintenance.
Since the costs of our cars are below average, I estimate our per mile cost of depreciation and maintenance at $0.30 per mile instead of the national average $0.42. Therefore, when we rent a car for less than $0.30 per mile we save money.
In fact, Linda, who shops for our rental cars, regularly rents them for less than $0.25 per mile. This past weekend she rented one at a total cost of $0.13 per mile.
Links to Cutting Expenses Special Report
Cutting Expenses - Introduction