2017-08-10 Thu

Taxes or Taxis?

Yesterday I booked a rental car from a rental company I regularly rent rental cars from. Enterprise. Been using them for years (ten+) and will continue to do so.

No big deal. Off to the web site, enter a range of days (21), type of car (engine, steering wheel, door on the driverís side) and confirm with ďOKĒ. The putative invoice is emailed to me, pay when you pick up the car.

I inspected the invoice so that I could key the estimated amount into my little budget spreadsheet.

Management Measures!

Instead of my estimate (based on ten years experience) of $799, the total came to $924. Now a few dollars here and there is not a big deal, especially when translating from rent-for-a-day to rent-for-twenty-one-days, but truth to tell I had expected it to be cheaper on a 3-week rental than on a daily rental. An extra $124 seemed a bit, well, wrong.

It turns out that when you rent from the airport location in St. Johnís Newfoundland (and other locations and other rental companies have this feature, so BE WARNED!) you pay a surcharge for the privilege of having the rental desk next to the baggage claim area.

Or in the case of Avis Rentals, having their used-car lot west of Spadina and College.

This makes sense if your plan is to step off the plane with your carry-all, hop in a car, and visit your client for a day.

This does NOT make sense when your plane lands at 1:00†p.m. and you have only a two-hour drive to reach your motel that night.

It also does not make sense to pay a 15% surcharge while you are driving around Newfoundland for three weeks.

I did the sums:-

21

days

3

weeks

$233

per week

$699

for three weeks

15%

location rate

$104.85

location charge

$803.85

sub total

15%

HST rate

$120.58

HST

$924.43

TOTAL

Above is the invoice seen as I first lost focus while reeling backwards in horror.

21

days

3

weeks

$233

per week

$699

for three weeks

0%

location rate

$0.00

location charge

$699.00

sub total

15%

HST rate

$104.85

HST

$803.85

TOTAL

Above is the invoice I dreamed up assuming that I rent from, say, a downtown location, or anywhere other than the airport.

Removing the Location charge of %15 reduces the estimate by an extra nightís sleep in a nice motel or several well-cooked steak dinners.

A Savings of $120.

You can do this in your head: Whatís $120 as a percentage of $803? Thatís right, the same old 15%.

Note too that I would have been sales-taxed at HST=15% on the Location Surcharge (think 1.15x1.15=1.32 or 32%). Eliminating the Location Charge of $104 reduces the estimate by $120.

Heh heh!

What does this prove?

Well, I think it proves the advice of my Mathematics teacher Mr. Brian Feld who always made us estimate an answer in our heads before setting down to work it all out with pencil and paper.

Having that estimate of $799 in hand before ordering the car has saved me $124.

Besides which, I can GrabACab from the airport to downtown for less than $124, I am sure. Or I can seize an opportunity to ride the excellent public transit system in St. Johnís.

(later)

So I cancelled the Airport Rental and booked through Kenmount Road. This has dropped the cost from $924 to $760, a savings of $163. For that I can take a cab ride.

Bus fares are $2.50†cash.

And, as I had expected, the figure of $760 is below my estimate of $799.