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The Ins and Outs of Costco Travel

August 16, 2017 By Mary Newton Leave a Comment

Costco is a wonderful store for buying items in bulk at a lower price. But did you know your membership also allows you access to discount vacations? From a Caribbean cruise to family fun at Disney World, Costco Travel’s member-exclusive vacation plans let you plan the trip of your dreams for prices that are far less likely to break the bank.

How Does Costco Travel Work?

Costco Travel is for members only, and most vacation packages can be accessed either by simply inputting your membership number or by creating a Costco Travel account linked to your membership. Costco finds you the best deals on whatever type of travel you are looking for. This includes working with rental car companies such as Enterprise to help you find the best deals on rental cars and finding hotels where you are traveling. Some vacation packages even add in a plane ticket if the destination is far enough away.

Booking your vacation is straightforward and simple. You select the type of trip or item you want – a vacation package, a cruise, a rental car, or a hotel – and input your destination and trip dates, as well as the number of adults and children who will be on the trip. Based on this criteria, Costco’s travel database pulls up the best options for you, which you can then select to see prices and included amenities.

Your options are also adjustable within each purchase. For example, if the cheapest flight is American Airlines at 5:30 AM, but you would rather have a midday flight, you can select it from the list of other available flights. You can select a different hotel option or transportation accommodation as well. The site also allows you to see how much money would be added to your total cost for each alternative option.

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Where Can I Go With Costco Travel?

The short answer is anywhere. Vacation packages include such locations as Cancun, Jamaica, Las Vegas, and Orlando. Cruises are offered to Alaska, the Caribbean, Mexico, and several other locations. Cruise purchases also allow you to select shore excursions ahead of time, as well as schedule group cruises. If you are new to cruising, Costco Travel even offers a simple guide to taking a cruise.

Costco also has specific travel partners to assist in getting you better travel deals. They partner with the Disneyland and Walt Disney World Resorts for resort vacation packages, as well as Universal Orlando and Hard Rock Hotel. They are also partnered with Adventures by Disney. Furthermore, Costco Travel is partnered with other travel providers such as Trafalgar Guided Vacations, which offer tours of vacation destinations around the world. Finally, Costco Travel also offers trip insurance through Travel Guard, to help protect you in case your travel plans are disrupted.

Is Costco Travel Better Than Other Travel Services?

The answer to this question is a soft yes. If you are a Costco member with no travel rewards cards – meaning hotel rewards, airline rewards, etc. – then Costco’s travel options are probably best. This is especially true if you are a Costco Executive member, as travel rewards earn you 2% back on your first $1,000 in travel purchases per year. In addition, many major travel services already partner with Costco Travel, meaning you are getting the best deals directly from the source. In some areas such as hotel and rental cars, you may be able to find a more inexpensive option outside of Costco Travel simply because their partners can be limited. However, the amenities offered with each vacation package are a great deal given their discounted member-exclusive price.

In all, if you are looking to travel and you love your Costco membership, start with Costco Travel. Chances are, you’ll find the best travel option for you.

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Photo: Rosie Host

Should You Rent or Buy a Car?

January 25, 2016 By Alexa Mason 3 Comments

Buying a second car can be a stressful and costly task. However, depending on your reasoning for needing a second car, renting a car from a rental company may be better than buying another car. Of course, a rental car is never truly yours, but how often do you really use that second car anyway? Here are a few things to consider when you are wondering whether you should buy a second car or rent.

Do You Need a Car?

Do you really need that second car? Some people like the convenience of having a second car, but if you’re not going to be using it every single day, then it goes to waste. If you want a second car for occasional errands or trips, you’re better off renting a car instead of buying a second one. There’s no need to spend the money on a second car if you don’t truly need it every day.

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Lowered Insurance Costs

Depending on the insurance plan you have for your first car, you might be covered if you rent a second car. Some insurance plans make you register a second car, which drives up your yearly rate. However, some insurance plans cover a rental car under the original plan. Additionally, most credit card companies also cover car insurance on rental cars. By renting a second car, you’re saving money that you might have spent insuring another car.

Maintenance Costs on a New Car

Depending where you rent your car, the rental car agency might cover any maintenance costs. Maintaining a car is very expensive, especially if your car is prone to breaking down or needing new parts. If you’re already paying for the upkeep on one car, why pay for a second? If you decide to rent, make sure you rent from an agency or dealer that cover the cost of maintenance. It could save you hundreds or thousands of dollars.

The Fuel Costs With a New Car

Many rental agencies only have newer car models. While a used car might seem like a good second option to buy, you’re going to be paying a lot of gas. Most newer car models are fuel efficient. So renting a newer car with a better gas mileage is a great benefit. No one likes paying for gas, especially when it seems to be rising higher and higher each year. So why wouldn’t you choose to rent a cheaper, newer car that has better fuel efficiency?

Free Gas With Rental Cars

If you’re only using your second car temporarily, renting might be the better option, especially if you rent from a company that offers free gas. For instance, when you rent a car from ZipCar, the cost of gas is included in the price. So, if you’re renting a car for $8 an hour for half the day, you don’t need to worry about how far you’re driving or how much you’ll need to budget for gas. All you have to do is use their prepaid gas card and you’re good to go.

Change Your Car With Rental Company

Depending on the car rental agency or your contract with them, renting a second car instead of buying one might allow you the opportunity to change car styles. Say you need to rent a sedan for a family trip one month, but you need a truck for a construction project the next month. By renting a car, you’re able to make that change. Buying a second car means you’re stuck with that model and might be forced to temporarily rent an additional vehicle to suit your needs. Renting affords more opportunity and is more beneficial for those with ever changing lifestyles.

Renting is Flexible

If you sign a one or two year rental agreement, you have the flexibility to use a different car once the rental agreement expires. If you buy a car, especially if you buy it under a loan, you’re stuck with it until you finish paying it off. Some people buy second cars and then decide a year later that they don’t actually need them. With a rental car, if you don’t need that second car, you won’t be stuck paying for it after your agreement is up.

Rental Cars Can Be More Cost Effective

Renting a car might be more cost effective overall, and you probably won’t have to take out a loan to afford it. If you were thinking of refinancing or taking out a loan to pay for a second car, you’re heading for financial trouble. Shop around and see what car rental agencies offer in terms of price. You might find that the prices are reasonable, and then you won’t have to consider the loan you would have taken out to purchase that second car.

Upfront Cost is Lower With Rental

By renting a second car, you’ll end up paying less money upfront. If you decide to buy a new car – or even a used car from a dealership – you generally have to pay a large down payment. With a rental car, your down payment will be significantly less since you’re not permanently purchasing it. Additionally, your monthly fees will be less than if you had bought the car.

Business Cars Can Be Tax Deductible

If you’re thinking of buying a second car for business reasons, renting one will allow you to claim it as a business expense. Buying a car would be considered owning an asset and as the years go by, the asset depreciates in value, meaning less money for the owner.

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Photo: Flickr: Atomic Taco

Dropping Car Coverage Can Affect Rental Car Costs

November 20, 2013 By Jennifer Derrick 2 Comments

Finance gurus will tell you that you should drop the “Comprehensive and Collision” coverage on your auto insurance once the value of your car drops to the point that the insurer would automatically total your car in the event of any accident. The thinking goes that you shouldn’t waste the money on the premium when any money you get as a result of the accident will only be a few hundred dollars. In other words, the premium you’ll pay to maintain comprehensive and collision will be more than any settlement you would receive.

This is somewhat sound advice and the reasoning behind it is true. Why not cut your insurance bill if you have the chance and if doing so won’t leave you on the hook for thousands of dollars if you have a wreck? Well, as I found out, if you travel and rent cars, you might end up paying more to insure that rental car than you would to keep the extra coverage on your insurance policy. Here’s my tale and some considerations that you can take away from my mistake.

We switched auto insurers recently. As part of the switch, we decided to drop comprehensive and collision (C&C) on our “older than dirt” cars. We ended up chopping about $500 per year off our policy. Yay! That was great, until our next vacation came up. Fortunately, I had the foresight to call the new insurer to make certain that our rental car would be covered under our auto policy. It always had been with our old insurer but I wanted to double check. Imagine my surprise when she told me that our liability coverage would carry over to the rental, but since we did not have C&C on our personal cars we would have to pick that coverage up through the rental agency. It makes sense now that I know, but I never realized that carrying C&C on your personal policy was necessary to fully cover a rental car. That’s never a consideration mentioned by the finance gurus.

So we checked the price for insurance through the rental car company. It was $25/day. Over a two-week vacation, that would have added $350 to the rental car cost. Ouch. And that would only cover collision, not any damage done through theft, vandalism, or a storm, for example. We looked into other options, such as coverage through the credit cards that we could use to rent the car. Again, those policies would only cover collisions and the limit was often fixed at $25,000 dollars. That would probably cover the car but if we ended up with a bill higher than that, we’d be on the hook for the overage.

We called our insurer back. The cost to add C&C back on to the policy was $100. That was much less than using the rental agency’s insurance. (We learned that we only needed to have it on one car, not both, in order to cover a rental so we did still end up saving some money.) They also had an option where we could add C&C for just the duration of the trip. That was only a few dollars and the most economical option, but we decided to just pay for the whole year since we travel frequently and sometimes on very short notice. We didn’t want to have to remember to call the auto insurer before every trip and have coverage added. I was lucky enough that I remembered to call before this trip! I didn’t want to have to trust my aging brain to make that call every time.

In the end we did end up saving some money on our insurance bill, just not as much as we hoped. And we had to go through a little last-minute vacation stress while we tried to work out a solution to something that we’d always taken for granted. In summary, before you cancel C&C on your own car, here are some things to ask:

Do you frequently rent cars when you travel?

If you only rent every few years, it may be worth it to pay for the rental agency’s insurance. If you travel frequently you’ll probably find that any savings on your auto insurance are quickly eaten up by the high rental insurance rates.

Are you okay with exclusions?

If you don’t carry C&C on your car and use the rental agency’s insurance, or insurance through a credit card, are you okay with the exclusions? I noted above that we found that the insurance only covered collision, not theft, storm damage, or vandalism. While these are unlikely events they do happen and we weren’t willing to take the risk, especially since the car would be left in unsecured locations much of the time. We also didn’t like that the coverage offered by our credit card capped out at $25,000. That might be enough, but it might not be if we rented a newer car or got an upgrade to a nicer car.

Are you willing to “piece together” insurance if you have an accident?

If we’d used other sources for insurance, any accident would have meant fighting with our regular insurer for the liability coverage and then dealing with another party for collision damage. I’d much rather make one call and have it dealt with than to have to fight with multiple insurers who are going to do everything possible to force the other one to pay and drag out the claims process for months.

Does your insurer allow you to enable C&C just for the duration of your trip?

If this is an option, it can be very cheap and would work great for someone who rents infrequently. You just have to remember to make that call before every trip. If you forget, you’ll end up uninsured and hoping that your credit card offers insurance.

Do you have to have C&C on all your cars to ensure rental coverage?

We did end up saving some money since we only had to carry C&C on one car, not both. This can be a good money-saving compromise to dropping coverage altogether.

I never realized that rental coverage and C&C were tied together. Looking back I should have known because it does make sense, but none of the finance gurus who touted dropping C&C ever mentioned it. Now I know and I know that we’ll be keeping C&C on at least one car at all times. It’s far more economical (not to mention better for our peace of mind) for us than relying on other rental car insurance options.

(Photo courtesy of Chris Lawrence)

Renting vs Owning A Car

January 18, 2011 By Jeffrey Strain 8 Comments

While most people are surprised to find out that I don’t have a cell phone, they are even more surprised when they also find out that I also don’t have a car. As with the cell phone, the reason I don’t have a car has nothing to do with lack of money. I can afford to buy a car and it would fit into my budget of spending less than I earn.

After deciding to travel 2 weeks each month this year, I decided that I would need a car for many of the trips I wanted to make. I knew that I would be driving a lot of miles during my trips, but wouldn’t have a real need for a car during the times I wasn’t traveling. I assumed the obvious frugal choice would be to buy a quality used car for about $5000 and drive it into the ground. Then I decided to run some numbers and was surprised to see that renting a car ended up making the most financial sense.

I knew it was possible to rent a car for under $20 a day including all fees which would come to about $300 a month or about $3600 for the year. While this is less than the $5000, I would not have a car at the end of the year. The value of the car would make both costs about even. With this in mind, the advantage went to buying the car because I would have it to use all the time instead of only two weeks a month.

I then began to think about other costs associated with owning a car. Registration, fees and taxes would be a couple of hundred dollars. The difference in insurance costs would be about $1000 a year more for owning a car (when renting, using my credit card covers collision, but I ended up taking out a non car owner liability insurance policy to make sure I was covered there). Car maintenance would be a few hundred dollars a year at a minimum, and that was assuming that nothing went wrong with the car. Taking all this into account, I figured the two options were about even: buying the car would be more expensive, but it would give me access to the car all the time.

There were two main reasons that I ended up opting to rent instead of buy. With the number of miles I would be driving, the chance of nothing going wrong with the car during the year would be a poor assumption. Costs could be a few hundred dollars or thousands and there was no way to predict this. With a rental car, if anything went wrong with the car, the rental car agency would take care of it so there was no chance of additional costs surprising me.

The other reason was that owning a car actually would limit what I wanted to do. I wanted to travel. If I owned a car, it would mean that all my travel would need to be within driving distance. If I wanted to fly someplace and rent a car, it would add even more to the cost of my transportation (since the car I owned would be sitting at home).

I could drive long distances, but this would mean spending less time exploring the areas I wanted to see while traveling. For example, I am currently traveling Arizona and New Mexico for 11 days. I flew to Tucson where I was able to rent a car for $193 including all fees. Had I owned a car, I would have had to drive to Tucson which would have taken 4 days (2 days there and 2 days back) and would have cost about the same (the airline ticket compared to the cost of gas for the car would have been about the same).

I’ve been surprised at the number of times I have found out that what I at first assumed was the obvious frugal choice ended up not being the most cost effective for my personal situation. It is the reason that I always run the numbers (making sure to include as many of the incidental costs that usually get forgotten) before making final a decision.

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The Cheapest Way To Rent A Car

November 4, 2010 By M. Butler 2 Comments

I have been car free for several years now, but there are times when I do need to rent a car. I have found that there is one way to consistently get rock bottom prices on a rental car that exceeds coupon specials and all the other advertised deals out there almost every time.

Most people I know look for what rental cars cost using whatever comparison service they happen to be using when they book their flight and hotel room. This will usually get you a mid-sized car for about $45 a day depending where you live, but it is easy to get cars for much less than this. I have found that the cheapest way to rent a car is to use the name-your-own-price option on comparison sites like Priceline.com or HotWire.com. Using this method, I am usually able to rent a car (mid-sized) for between $10 and $15 a day.

You do have to be willing to give up a little to get these prices. Although all the cars I have rented have come from well established rental car companies, when you use this method you can’t choose the specific rental car company. This is also not the way to go if your plans might change. Part of the reason you are getting the great price is that you are billed right away when your bid has been accepted. Once accepted, you won’t be able to get a refund or cancel / change your reservation.

When making a bid, I always choose the non airport rental car dealers if possible. The price you bid is for the car, not the fees that go along with it, and airports many times carry an extra airport fee making them more expensive.

To continue to save money, check what insurance your credit card covers. Many (but not all) credit cards come with complimentary collision insurance if you pay for the rental car with your credit card. Mine does so I don’t need to add that to the price. Your credit card policy should have a lot of details of what is and isn’t covered (and why it is important that you read and find out exactly what you credit card does and doesn’t cover). For example, my credit card covers collision as long as I rent the car for less than 31 days in a row and the suggested retail value of the car being rented is less than $50,000.

In addition, contact your auto insurance to see what it covers. Many will cover liability when you are driving the rental car meaning that there is no need to get any extra insurance (be sure to call and ask specifically what your car insurance policy covers and doesn’t cover when you rent a car). Since I don’t have a car and liability auto insurance for it, I have to choose between getting a non car owner policy from a car insurance company or opt for the rental car liability insurance. I figured out for me that if I rent a car for 20 days or more over a six month period, I come out ahead getting my own liability insurance (with much better coverage) rather than through the rental car company.

I know that many people aren’t in my situation where they don’t have a car, but many people do rent a car on occasion and if you even rent a car once, this little trick can save you hundreds of dollars over what you would pay going through the normal coupon or deal discount methods.