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Fair car share.
February 1, 2012 8:59 AM   Subscribe

How much should I charge my housemate for using my car?

My housemate doesn't have a car, and I'm happy to let her use mine when she needs to. She typically uses it for errands, and drives it maybe 30-60 miles a week. I drive it about the same amount. What is the best way for me to get reimbursed for usage? So far she just fills up the tank. She's very willing to pay more. I saw the previous question about how to share a car with an SO; this is different in that she is a friend and housemate instead. I don't want to charge her by the mile, as that feels too nickel-and-dime to me. The car is 8 years old and runs fine. I want to keep it going as long as possible (and replacing it would be a financial hardship). I own the house and she pays me rent. Would it be reasonable to tack on a "car usage" charge? If so, what should it be? I'm not looking to profit, but to have her pay a reasonable proportion of the depreciation, insurance, registration and repairs.
posted by Wordwoman to Travel & Transportation (30 answers total) 1 user marked this as a favorite
 
I predict you're going to be getting a number of people in here saying "talk it over with her," but it sounds like you've already done that and she WANTS to pay you more and you're at the "uh, okay, so, how much more should that be?" stage.

Maybe calculating what a percentage of your monthly insurance is would be the way to go. Not a 50/50 split, because the car's in your name -- but not so little it feels stupid.
posted by EmpressCallipygos at 9:05 AM on February 1, 2012


Filling up the tank is no small cost these days.

On preview, what EmpressCallipygos said.
posted by chrisfromthelc at 9:06 AM on February 1, 2012 [1 favorite]


Do you have zipcar in your city? I'd charge her based on their hourly rate--or maybe a little less, given that their rental rates include gas.
posted by Admiral Haddock at 9:08 AM on February 1, 2012 [3 favorites]


I'm not looking to profit, but to have her pay a reasonable proportion of the depreciation, insurance, registration and repairs.

That really is what mileage charge is, however. I mean obviously pick something that sounds fair to you, but the IRS standard rate for mileage is calculated to basically be what it costs, all inclusive, to operate a vehicle. They just break it down by miles because that's the best way to make usage jibe with wear and tear on the car. And I think you need to determine if you want her to pay for using your car or what you'd like is for her to share the expense of having a car with you.

So, for example if she never drove it and you never drove it, in your world should she still be compensating you for having the car available to her? As it is, at the end of the car's life you have a car to sell and she does not [similar to your mortgage arrangement with your house] so I'd think something that's more like mileage would be the most fair arrangement.
posted by jessamyn at 9:11 AM on February 1, 2012 [2 favorites]


The average of 30 and 60 is 45 miles/week. At current IRS mileage rates, that's about $100/month.
posted by jon1270 at 9:11 AM on February 1, 2012 [2 favorites]


To be more specific:

Beginning on Jan. 1, 2012, the IRS standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

55.5 cents per mile for business miles driven
23 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
posted by HeyAllie at 9:13 AM on February 1, 2012 [1 favorite]


Our car share charges about 45c per mile including gas (so you'd reimburse her for filling up the tank); this covers admin, repair, maintenance, insurance, depreciation, etc.
posted by seanmpuckett at 9:15 AM on February 1, 2012


30-60 miles/week is between 1500 and 3000 miles per year, which really is a small amount in the greater scheme of things. I haven't ever split this out before, but I would take in to consideration things such as maintenance, insurance and depreciation.

Maintenance: how much are you spending in a year for maintenance on the car? I'm going to assume a couple of oil changes, filters, and general repairs.
Insurance: You didn't mention your insurance arrangements, but this should be considered.
Depreciation: Driving a car a total of 6000 miles per year isn't going to affect the value of the car as much as the age will affect the value. Most of the time the value of a car is determined on driving around 12000 miles per year, so the 6000 per year is not hitting the value too much.

On preview: The above statements regarding IRS mileage rates are irrelevant if she is putting gas in the tank. The IRS mileage includes fuel cost.
posted by Mister Fabulous at 9:15 AM on February 1, 2012


I was going to suggest the IRS mileage rate, which includes gas and depreciation. I would just deduct what she pays for gas from the total every month, or something.
posted by muddgirl at 9:17 AM on February 1, 2012 [1 favorite]


So, let's say she averages 45 miles / week.

The average fuel economy of a new passenger car in 2004 was 29.5 miles per gallon. The average cost of a gallon of fuel is $3.43 per gallon. So we can estimate the cost of fuel at:

45/29.5*3.43=5.23/week

The IRS mileage rate in 2012 is 55.5 cents per mile for business or 23 cents per mile for moving/medical use.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study.
. Since you would own the car anyways, you should probably use the lower rate, since her use only contributes to your variable costs (fuel, maintence, etc.).

45*.23=10.35/week.

So taking out the cost of fuel (which we calculated separately), the variable cost based on the IRS rate is:

10.35-5.23=5.12/week

Unless you're really hard up for cash, I'd just eat the $5 bucks a week for the goodwill. But you could reasonably charge the roomate $20/month I'd think.
posted by Jahaza at 9:17 AM on February 1, 2012 [1 favorite]


If your housemate is driving your car this frequently, you might want to add her as a secondary driver and charge her the difference in your insurance premium. This would be in addition to any mileage and gas charges. If your housemate is in an accident in your car and it turns out that the insurance finds out she uses the vehicle regularly, you could get in trouble for not having her on the policy.
posted by TheCavorter at 9:20 AM on February 1, 2012 [4 favorites]


Just to follow up, our car share is a non-profit.

They also charge an hourly rate but this is primarily designed to keep the cars available -- in other words, it costs a member money to keep the car out and away from other members. The program is designed more for errands and short trips and less for commuting (where the car would sit in a parking lot for nine hours where other members can't use it).
posted by seanmpuckett at 9:21 AM on February 1, 2012


Personally, I don't want to be in the car renting business, and would not want this to be construed as some sort of business transaction.... it's a favor you're doing her. Unless I was very hard up on cash - I would let her borrow the car, appreciate her replacing used gas, and just leave it at that.
posted by machinecraig at 9:22 AM on February 1, 2012 [6 favorites]


Jahaza's calculation assumes that she fills the tank with exactly how much gas she consumes, which is unlikely and skews the compensation towards overpaying.

If she's filling up the tank every time she drives (and not just when it's empty), then it's possible that's a pretty fair compensation.
posted by muddgirl at 9:24 AM on February 1, 2012 [6 favorites]


Perhaps, in addition to meeting her fuel costs, you could just ask her to clean the car and take it for any services. That is pretty much going to be equivalent to the amount of money that Jahaza suggests.
posted by rongorongo at 9:40 AM on February 1, 2012


I think it's great that she's already filling your tank. Perhaps you can agree to accept, say, $20/month to put into a savings account for repairs and maintenance if necessary, and you'll split all repair costs with her 50/50 using the proceeds of that savings account as her half. Then once you or her move on or she no longer has need of your car, you can give her back what's in the savings account. Like escrow, sort of.
posted by juniperesque at 9:48 AM on February 1, 2012


IRS mileage rate minus expected per-mile gas cost, and each of you fill up the car when it's low. It's fair, easy to calculate, and accounts for the all running expenses (depreciation, insurance, repairs).
posted by zippy at 9:56 AM on February 1, 2012


I tend to lean toward agreeing with machinecraig and muddgirl.

One additional thing you might want to consider, if you haven't already, is adding her as an occasional driver on your insurance (and charging her for the additional cost). If she is using the car as much as you are, rather than just once in a blue moon, your insurance company might deny coverage if she gets into an accident and isn't listed as an occasional driver.

I know that, where I live, it is OK for me to drive my fiancee's car once in a rare while, with her permission, but if I were to start driving it as often as she does, I would need to be added to the insurance as an occasional or even full-time driver. YMMV depending on the insurance company and your jurisdiction, but I'd look into it if I were you.

Overall: stick to having her fill up the tank every time she borrows the car, and maybe charge her for any increased insurance costs that result from her use of the car.
posted by asnider at 9:57 AM on February 1, 2012 [1 favorite]


Why not do something simple like have her just take care of the gas (all gas).

If that seems low you can also split things like maintenance/insurance or other car related expenses.
posted by bitdamaged at 10:03 AM on February 1, 2012 [1 favorite]


nthing having her just fill up the tank when she returns the car.
posted by Elly Vortex at 10:05 AM on February 1, 2012


If she is living with you, she probably has to be at least notated on your insurance anyway.
posted by Monday at 10:12 AM on February 1, 2012


I'd ask her about whether she'd be willing to pay half for registration, insurance, and repair/maintenance. Re gas, it might work best to get a gas card in both your names, and each pay half for the monthly credit card bill.

Just a thought. It sounds like your usage is pretty much 50-50. If the percentage of usage changes, the contribution could be adjusted accordingly. (E.g. if she drives it 40%, you drive it 60%, she'd pay 40% of the above amounts.)
posted by bearwife at 10:29 AM on February 1, 2012


Standard mileage in Canada is 48-50 cents a kilometre, so call it 80 cents a mile.
posted by Dasein at 10:39 AM on February 1, 2012


When I borrowed a car, I ALWAYS filled the tank- even though I certainly didn't use that much in my errands. You might just quickly sit down with some receipts and figure out how much your roomie is already paying per mile.

I like the idea of adding her to the insurance and having her cover the difference.
posted by rockindata at 10:44 AM on February 1, 2012 [1 favorite]


Just to point out - if the numbers people are suggesting feel high to you, it seems like people are working on the assumption that when the engine light comes on and you take it to the mechanic, and pay him/her $500, you're not going to ask your car sharer for anything extra. That means that there could be times when your registration isn't due, you haven't filled the tank in a while, you don't need an oil change, and she hands you her $40/month or whatever, and you feel like you're almost making money on the situation, which isn't what you intended. If that were to happen, don't panic, just wait, the car will eat it up in its own good time.
posted by aimedwander at 10:44 AM on February 1, 2012 [1 favorite]


I suggest having her listed on your insurance policy as a driver, and to get collision insurance if you do not already have it. You really don't want your housemate to get into an accident and either refuse to or not be able to replace the car.

I would go for splitting insurance, scheduled maintenance, and gas, and responsibility of paying the deductible in full if she is in an accident. Leaving you with the full cost of depreciation, which given that the car is driven so infrequently, comes as much from age as it does from mileage.
posted by Maxwell_Smart at 12:30 PM on February 1, 2012


Insurance. Insurance. Insurance.

I cannot stress the importance of this enough. You are responsible for what the car does, regardless of who is behind the wheel (this is a gross simplification of the situation, speak to an insurance agent.), get her name on the policy pronto.

It's not the cost of replacing your car that you need to worry most about. What if she rolls over someone in a parking lot, or takes out a row of Mercedes Benzes rounding a street corner?
posted by bilabial at 12:43 PM on February 1, 2012


If I was borrowing a housemate's car, I'd be much happier with a fairly informal 'fill it up when you use it, and chuck in $20 a month for insurance/maintenance' than with some amount that was figured out per kilometre according to some goverment guide. Yes, that's very accurate and well founded, but it makes the relationship much more businesslike, and less like a friend doing a favour.
posted by twirlypen at 2:50 PM on February 1, 2012 [1 favorite]


Listing her on your insurance is NOT enough. A lawsuit after an accident will go after her AND the owner of the car, for amounts beyond your insurance.

This is a huge liability for you. I would advise that you not let her drive the car.
posted by HuronBob at 5:36 PM on February 1, 2012


There's the cost of owning the car - gas, oil, insurance, registration, repairs, and the recognition that you should be saving for your next car(depreciation). That's the cost, which you would pay anyway because you want to have a car. Then there's the extra cost of extra miles - gas, oil, wear & tear (The value of a used car is directly related to the mileage), additional insurance because of additional miles, and the cost of adding a driver to the policy. That's the incremental cost of the additional miles.

Maybe your roommate should be added to your policy. Have you discussed what will happen if there's an accident? What about parking tickets? What if you accidentally let the inspection expire, and roomie gets a ticket?

I loan my car out all the time. As I hand someone the keys I say "I have 2500 deductible, and you are responsible for it, along with parking tickets, etc. I expect it back with more gas than it has now. Please be nice to it." Talk to roomie about the liabilities and come up with a plan that is less than the full cost of each mile and a bit more than the incremental cost.

Maybe roomie could get a gas card and pay for all the gas? Just come up with a plan that feels really fair; a car is less important than a friend. (said as someone who drives an old, battered, reliable Toyota)
posted by theora55 at 6:05 PM on February 1, 2012 [1 favorite]


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