What's a fair way to share fees in a group road trip with a personal and a rental car?

Question

I'm planning vacations with a group of friends (12 people), and it involves a ~1200km return trip by car. Only one of us owns a suitable car (4 pax), so we've rented a minivan to transport the other 8, and we're debating on how best to share the costs.

Normally, if none of the cars were rentals, each car owner would just divide the price of fuel and tolls over their passengers, themselves included.

Logically, we could do the same with the rental fees. But as a passenger who could either be in the personal car or in the rented minivan, their share of the cost will be vastly different depending on which car they end up in, for the same trip. That would be unfair to the passengers of the rental car.

We could also share the sum of all fees of both cars across all of us. But that would be unfair to the car owner, who ends up paying a higher trip cost than if it were just his car and passengers sharing the cost, despite owning a car and enduring the associated hassles and yearly expenses.

If we calculate it that way, we need to include the full, actual cost to him of using his car for the trip, including maintenance, amortization, and insurance.

What would be the best way to share these costs?

EDIT to avoid opinion-based interpersonal advice: I'm looking for the most "scientifically fair" solution, some kind of calculation model. Answers that challenge whether we need to be that precisely fair in a group of friends are absolutely right, and all parties have indeed agreed to a "simple and imperfect" solution. We're left with the academical question that is the object of my post: "but what would be the fairest model?"

Answer 1

Here is a way to split the costs equally:

The car owner pays:

(cost of the car only/number of passengers in the car)

Everyone else pays:

(((cost of the rental + the car) - (cost of the car only/number of passengers in the car)) / (number of passengers in total - 1)

In this way:

• The owner pays a split cost of the car only
• Everyone else pays a split cost of everything combined - what the owner paid

Answer 2

Here's the simplest approach:

• owner pays nothing
• everyone else pay all running costs equally (note: owner brings car to trip with full tank, and at end of trip it's filled up as part of the trip's cost)

Why?

• it's simple! People become annoyed with complicated calculations
• it's fair enough

Why is it fair? Think about all the "hidden" costs the owner incurrs:

• risk of damage
• owner carries responsibility of paying for any mechanical problems that occur during the trip
• devaluation due to large number of extra miles (it's a road trip after all)
• extra maintenance due to conditions (eg cost of anti-freeze in winter)
• extra wear and tear (extra tire wear, brake pads, etc)
• general maintenance (scheduled servicing coming up earlier than would otherwise)

I did the numbers once and "owner pays nothing" is close enough to fair; the "hidden" costs (s)he incurrs is about the same as the total hard costs divided into the other travellers. The more travellers there are, the greater the owner's relative contribution would be with this approach.

Answer 3

Here's how I would go about dividing the expenses:

1. Tally up the expenses. This should be the total of rental fees, fuel, tolls, and an agreed-upon amount for amortization & insurance for the owned car. Everyone, including the owner of the car (let's call her Jenny), must contribute 1/12 of this total amount.

2. Each person then tallies up the amount they have outlaid during the trip. For example, if Alex pays for the rental car, that counts as an outlay for him. Importantly, Jenny's outlays should include the agreed-upon amount for the amortization & insurance; this is effectively an in-kind contribution she has made to the total expenses for the trip.

3. If a person's total outlays are less than 1/12 the total cost of the trip from Step #1, they owe money to someone else in the group. If a person has paid more than 1/12 the total cost of the group, someone owes them money. Since (by definition) the total expenses for the trip are equal to the total outlays, the total money owed should equal the total overpayments.

The only tricky part is figuring Jenny's in-kind contribution to account for the cost of using her car. In the USA, one way to do this would be to use the IRS Standard Mileage Rate, which is effectively a nationwide average of the per-mile costs of owning a vehicle. Note, however, that this standard rate includes fuel costs; so if you go this route, Jenny should pay for all the fuel for her car.

In other countries, similar standard "lumped rates" may exist, and may be quite different depending on the local costs for owning a vehicle and what is included in the rate. Consult your local revenue agency.

Answer 4

Sum the cost of the van rental and the fuel; divide the total by eleven. All except the car owner pays. The car owner gets a 'free' trip but bears the burden of driving and the fixed costs of maintenance and repairs, insurance, etc. Simple and, I believe, many would consider it to be a fair split of the costs.

Answer 5

There is not a equitable way of calculating the expenses considering the van is rented and the car is owned. There are too many variables to consider. And, fairness will be in the eyes of the beholder. For instance, how do you factor in the expense of general wear and tear on the car? What about the increased depreciation only realized when selling or trading in the car? There is also the comfort level differences of riding in the car versus riding in the van. And, even if you were to factor in every variable, can you account for passengers switching vehicles during the (possibly 10 hour) trip? How do you decide who rides in which vehicle and bears the associated expense?

Here are a few options:

1. Total all of the transportation expenses of the trip. Exclude any expenses for general maintenance on the car that would normally happen for the car’s age and/or mileage because these would have happened regardless of the trip. This exclusion includes tires, fluid fills and changes Including oil (not additional fluids during the trip), mechanical maintenance and repairs, insurance, etc. Divide the expenses amongst all of the travelers except for the car owner. The car owner’s contribution is the free use of the car.
2. Do a cost comparison/analysis of the expense of renting the same or similar car. Total all of the transportation expenses of the trip. Exclude any expenses for general maintenance on the car that would normally happen for the car’s age and/or mileage as explained in option #1. Divide all of the expenses equally amongst the travelers. Pay to or reduce the expenses of the car owner by the amount of a rental car.
3. Rent a larger van. I have rented 15 passenger vans in the US and Europe. Most will have the option of placing luggage on the roof or to tow a trailer with luggage. This will free up space in the interior for passenger comfort. From my experience, it will also match or beat the expense of multiple vehicles.
4. Rent both a car an a minivan. Divide and share the expenses equally amongst everyone.

Answer 6

Assuming that the travel comfort is similar in the owned car and the minivan, I believe it should be divided as follows:

1. Fuel costs and tolls should be divided equally between all passengers - the goal is for everyone to travel from A to B and back to A, so these costs are very much related to accomplish that task.
2. Travel-related expenses of the car owner and rental costs should be summed and divided equally between all passengers. These costs are required for all of you to acquire vehicles in order to travel. This is a necessary cost, as without any of them, you lack transportation. The only aspect to take care of is for the car owner to provide a fair list of costs that he had incurred, because of the trip itself, or a part of the costs, if it was only partially necessary for the trip. I believe it can include: oil change, if the trip is long enough, oil refill for the trip, if the car requires extra oil, extra coolant bought on the way etc.

Answer 7

Check what it would cost to rent the car from the rental company, let's say X. And everyone should agree that if your friend didn't have a car, you would hire the van and the car and divide the total cost by 12.

Now assume that it's not your friend who owns the car, but his dad. And he offers to rent the car to your group. Decide based on the price X of the rental company, and the fact that you'd expect the dad not to make a profit, how much rent you would pay to the dad. Call that Y.

Now you take the total cost including rental of Y for the car, and divide that total cost by 12. Everyone pays his share, and dad gets the rent Y. Except that since the car is actually your friend's car, you pay Y to the friend after he paid one 12th of the cost.