If you live somewhere like London with a great public transport network, you might be able to travel to work and back, drop the kids to school and head into town to pick up some shopping without spending a fortune.
Unfortunately, these same journeys have become significantly more expensive for drivers, and when you factor in insurance, parking permits, road tax and MOTs, the question of cost becomes pretty serious.
The BBC reported in July that petrol prices were at a 40-year high, increasing 9.4% in the previous 12 months and sparking protests and demands for fuel duty to be dropped.
Renting can be a cost-effective option unless you need your car for daily use. On average, you'd pay about the same for car rental over two weeks as most car owners pay per month, but if you cut down your driving time, it could make a big difference to your budget.
Car rentals are already up around 13%, as people decide to forgo the unavoidable costs of car ownership and to pay for a vehicle only when they need to.
If you were to rent a car for a full month, you'd pay around £1,505 - but hiring a car for limited periods can be much cheaper.
Here are a few averages based on different vehicle sizes:
It's very clear that smaller, more economical cars are also massively cheaper to rent - the difference between an estate and a mini is as much as £74 less expensive per day, which would make an enormous difference over the course of a week or two!
Drivers are best advised to book as far in advance as possible to ensure they reserve a smaller, cheaper model since these go quickly.
Most car rental companies have a fuel policy where you simply return the car with the same amount of fuel as when you picked it up (or had it dropped off), so your fuel costs will depend on how far you need to travel.
Let's look at a theoretical example! Emily works from home 75% of the time, gets her groceries delivered and doesn't particularly need a car every day - BUT the five days a month she travels into the office, she needs a vehicle, as it's about a 30-mile round trip and there aren't any decent public transport links.
Owning a typical small car would cost something like this:
Ignoring emergency repairs, breakdown cover, windscreen chips and other incidental costs, we're looking at around £2,086 a year - or £174 a month.
Hiring a small car for those five days a month would cost £60 a month, and even if Emily went for a slightly larger or more luxurious car, she'd need to spend about £35 a day to get close to the cost of car ownership.
We're excluding fuel costs since those will be the same either way, although some car hire companies offer discounts at particular petrol stations.
Not all car hire companies have budget options. Still, if you block book or book further in advance, you can normally get a cheaper deal, and if you have a confirmed reservation and your selected car isn't available, you'll usually get something nippier for the exact same cost!
You can get an amazing deal if you buy a second-hand car - but the problem is that servicing, repairs and MOTs get more and more expensive the older the vehicle is.
Looking at some popular models, most people spend between £12,000 and £36,000 to purchase a new vehicle, often taking out a hire purchase or PCP finance agreement to split the cost into monthly repayments.
· VW Golf £36,180
· Nissan Qashqai £22,900
· Ford Focus £22,145
· Ford Fiesta £17,620
· Vauxhall Corsa £11,695
These agreements do carry an interest charge, though, so the overall price will bump up by a hefty margin! The average cost of a car loan is 4.33% for a brand new car and 8.62% for a used car, and you'll pay a higher rate if you don't have a perfect credit record.
If you decide to buy second-hand, you'll need to be very careful to verify the vehicle's service history and ownership, plus check things like the car's mileage and condition.
While older cars are cheaper to insure, that might not be the case if the vehicle has very high mileage and is a breakdown risk.
You'd also need to budget anything from £56 an hour for MOT repairs if the vehicle doesn't pass the first time (the standard MOT charge is £54.85 for the test itself).
All of this adds up to an uncertain expense which can become very steep indeed, whereas renting a car for the specific times when you need to drive long distances is a fixed expense. You won't be responsible for any maintenance or other running costs.
The answer really is that it depends on how far you drive, how often, what size vehicle you require, and where you live.
If you have a driveway or garage, plenty of on-street parking and can store a car overnight at zero cost, that will help manage your budget. Permits in central city areas can be expensive (and difficult to come by), so that could be a big factor in your decision.
Otherwise, it's all about working out whether you can get by without a car 100% of the time.
Walking to and from work or school runs, using tubes, trains and public transport, or investing in a bike or even a small moped can be substantially cheaper than the costs of car ownership for those who don't drive daily.
The tipping point is usually if you drive 10,000 miles a year or more or need a car more than 30% of the time.
If you're torn between these two options, there is a middle ground worth considering - going for a long-term car rental agreement.
On the plus side:
· You can hire a brand new or luxury car for a fraction of the cost it would take to buy, even if you were to pay on a monthly repayment plan.
· Monthly costs are much lower than average car loans, hire purchase agreements or PCP finance arrangements.
· If you decide you don't need a car for a while or wish to change the vehicle, you simply return it - no selling the vehicle or searching for something different.
· The car rental provider covers the repairs and sometimes the insurance, so your cost is solely the rental price and the fuel you use.
The downsides are that you'll probably have a monthly or annual mileage limit - if you go over that limit, you pay an extra hire charge based on a few pence a mile.
Some car rental firms offer fixed-term rentals but won't allow you to return the car early or will levy an extra cost if you decide to cancel the agreement.
Any damage to the car, late rental payments or other actions that breach the agreement terms will usually result in a penalty.
In conclusion, there are pros and cons to short and long-term car rental, paying for a car with hire purchase or buying a vehicle outright.
Still, there are multiple options, and if your travel costs are higher than you can manage, there are several potential solutions.
Buying a car tends to be best if you drive a lot, travel long distances or want to be able to head out on a road trip as and when you wish. However, car rental can be a cost-effective alternative and make occasional journeys that bit more manageable.With fuel prices among the countless things that are going up, millions of commuters are looking for ways to reduce their travel costs and avoid spending over budget each time they need to fill up.
Car rental and sharing are among the easiest solutions, meaning that you pay only for the transport you need - and nothing when you don't.
Today we'll compare the costs of hiring vs buying a car and a few examples of the prices you might expect to pay, including fuel.