I bought a new car. What is a reasonable and fair way to split car usage expenses with roommates?
I've looked at past discussions of car sharing
, but these have involved much older cars and I'm not sure about the insurance. Any suggestions for my circumstances?
I live with 3 other people in Chicago. We share rent, utilities, food, chores, pets and other household things. Earlier this year we thought about buying a used car together because we would all appreciate having one available from time to time. After much searching and not much success on the used car market, I decided to buy new with a financing plan.
I bought a new 2012 manual little car with great gas mileage to commute to work just outside the city. I, as the owner, am the primary driver. I drive about 250 miles per week. My 3 roommates are all listed on the car insurance and we all split that fairly. Roommate #1 is a 20 yo male, so his rates are higher. This insurance policy covers us as drivers of other uninsured or underinsured cars, which some of my roommates wanted regardless of whether I bought a car or not.
I have an arrangement with roommates #1 and #2 that they take the car one day per week to work (I carpool that day), they drive at least 40 miles, sometimes more. I taught #1 to drive stick on this car and will be teaching #2 soon. Roommate #2 also uses the car most weekends when I don't need it, for variable distances. Roommate #3 uses the car less often, maybe once or twice a month. Occasionally the car gets taken on longer weekend road trips by all of us, together or separately.
Currently #1 and #2 pay me $100 per month (total, arbitrarily determined) for use of the car. I fill up the gas because it's cheaper where I work and they reimburse me based on mileage. The price we set for use of the car should reflect depreciation, maintenance, and gas, but not insurance since we pay that separately. Because we wouldn't include insurance, the IRS rate of 55.5 cents per mile
would be an overestimate and not useful for our calculations.
What is a good way to fairly charge for car usage? This isn't the initial situation we planned on, of buying a beater to use for a few years that we would all contribute to more or less equally. I made the decision to go new because I was suddenly driving more and I will also take the car with me after moving out, if that happens. My roommates do appreciate having a car to use and want to contribute, but we don't know how to set an amount. Help!