Take a Taxi or Rent a Car? Which is More Cost Efficient?

Take a Taxi or Rent a Car? Which is More Cost Efficient? - Quicken Loans Zing Blog I’m not very good at sticking within a budget. That point becomes even more clear when I’m on vacation. While I at least try to limit the amount of money I spend in my everyday life, it seems like nothing is out of the question when it comes to vacation. I go out to eat two or three times a day, go on day-long cruises and spend money buying as many t-shirts and souvenirs as possible. It’s like I completely forget that I’m on a limited budget.

Whenever I begin planning a vacation, I tend to only think about how nice it’ll be to get away and hang out at the beach. Instead of thinking about how nice it would be to have some money saved up, all my attention is focused on how much fun I’ll have. From there, it’s all downhill. Do I have fun? Yes, but it comes with a cost.

One of those costs is due to transportation. For the last two years, whenever I’ve taken a vacation, I’ve decided to take taxis instead of paying for a rental car. You may think I’m crazy, but let me give you a little background information. Until this past September, I was under the age of 25. When it comes to renting a car, 25 is the magic number.

The magic number for what, you ask? To rent a car at a reasonable price. Until recently (within the last 10 years), you weren’t even allowed to rent a car until you were 25. Since then, the laws have changed. While drivers under the age of 25 can now legally rent a car at most companies, they’ll find the price is considerably more expensive.

It’s kind of like paying for insurance. Teen drivers are more at risk for accidents, therefore they pay more for car insurance. It’s the same for renting a car. Statistics show that people under the age of 25 are still more at risk than people aged 25 and over.

What about after you turn 25? What’s the difference in cost between renting a car and taking a taxi? Let’s take a look.

When I take a vacation in Florida, I always stay at my family’s condo. It’s located about eight miles from the beach. A round-trip taxi ride from the condo to the beach costs about $60. I know, I know. That’s a lot of money to drive less than 20 miles. However, when you consider that drivers under the age of 25 who rent a car are often charged an additional fee of $60–$90 a day, taking a taxi may actually save money.

For example, say you’re 23 years old, and you need to rent a car for six days. For those six days, you’re looking at a fee close to $200 for a basic car. The initial $200 isn’t bad, right? However, once you start tacking on all the additional costs, you’ll likely change your mind. Let’s say the company you rent from charges an “underage” fee of $70 a day. For six days, you’re looking at an additional $420, making your total come to $620 before taxes. Don’t forget about filling up the gas tank and rental insurance, if necessary.

On the other hand, you could take a taxi and pay $60 a day. For six days, you’ll pay a total of $360, which comes out to $260 less than you’d pay for a car rental. It’s important to remember that the taxi ride only gets you to and from the beach. It doesn’t include any additional trips you may want to take. Since I spend all my days at the beach, taking a taxi wins every time.

It’s also important to take into consideration where you’re traveling. If you’re like me, you’re terrible with directions. You know left from right but that’s about it. If helplessly driving around doesn’t sound like a good way to spend your vacation, I’d recommend taking a taxi. You’ll get to and from your destination in no time, and you won’t have to worry about getting lost.

Another often overlooked detail is parking. If you’re staying in a big city, there’s a good chance you’ll have to pay for daily parking. The first time I traveled to Chicago, I had no idea what to expect. I arrived at my hotel only to find out the hotel had no parking lot. It was up to the customer to find their own parking, or pay $50 a day to park at a garage located a few blocks away. Parking costs can increase the cost of a rental car tremendously, so be sure to check ahead.

A week from today, I’ll be back in Florida on the beach. Even though I’m 25 now, I still opted to ditch the rental car and take a taxi. It also doesn’t hurt that I’ll be with a friend so we can split the cost each day.

What do YOU think? When it comes to deciding between renting a car and taking a taxi, what do you think is the most cost-efficient method? Let us know in the comments section below!

 

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