Why doesn't this exist?

[Aunt Spiker]

You know - when it comes to auto-ownership we're pretty much on a hook for life.

Vehicles are costly.
People seem to go through them before they can pay off their loan and enjoy financed-free ownership for a while. My view of paying it off and running it into the ground seems to expect too much from the average vehicle these days whose life span seems less than that.
So they have to struggle their whole lives to afford buying one after the other.
If they have strong enough credit they can lease - but the average person just doesn't qualify for leasing.

Well what if there was a renter's program aimmed to keep you in a vehicle - without having to buy it? Almost like a lease, but not so difficult to get into?

You could - for example - rent out a vehicle that's fuel efficient for $300.00/month. You and the auto-rent business share the cost for maintenance - and maybe even insurance. The great thing, though - would be that if your income gets crunched for a while you could trade it in without much of a fuss. You could downgrade to an older model or a smaller vehicle that will cost you 1/2 as much. Your credit won't be tanked so long as you just meet some type of payment on time each month (etc).

Or the reverse: you could trade-up to a larger vehicle if you have a child or have company for a while, etc. . . and so on.

Thoughts? Seems like a lease program - but the goal is to keep people mobile in somewhat reliable vehicles rather than keeping people on the auto-industry hook for continually buying new ones every couples of years with the flexibility of change without severely impacting your life in an overtly negative fashion.

 

[Mycroft]

If someone determines that this idea would be a profitable venture, I'm sure you could secure the financing to get it off the ground.

I say...go for it.

 

[Daktoria]

Sounds like a "company car".

 

[ChuckBerry]

From a contractual and liability standpoint I don't think such an arrangement would work, or else it wouldn't work for a mere 300 a month. Capital investments would easily be hundreds of thousands merely to buy vehicles, not to mention maintenance facilities, storage, business officies etc. Plus, who wants to drive your hand me down at the same price you rented it for? Would you want to drive someone elses hand me down?

 

[MaggieD]

Most of today's automobiles easily have a life expectancy of several hundred thousand miles. The trick is to buy a new car, not a used one, and maintain it exactly per manufacturers' specs. Many times, used cars have gone through any number of owners -- haven't been maintained -- have histories you don't know about -- and, all in all, have been somebody else's problems.

Would you let someone else "rent" your new car for $300 a month? If it's economical enough for you to consider that option, it's not going to be profitable to the renter.

PS -- I haven't the slightest idea why someone would choose to lease a car. Seems like a great way to have car payments for freakin' life.

 

[Aunt Spiker]

Hmm - good points. it would be cost intensive for said company.

Per the hand-me-down. No: when we were belly up with the SUV that was too small for hte family and a gas guzzler I wanted more than anything to just trade it in - but couldn't manage it. Had to pay it off first - which I did a year early just to get out from under it.

 

[justabubba]

your business model is not viable
you are attempting to find a way to transfer the costs and risks of car ownership to another entity
what would actually be introduced is another entity which is going to incur operating costs - those we as drivers presently incur, plus the overhead of the new entity's operation, plus that new entity's profit

we see similar business models open from time to time. where, if you have less than 200,000 miles on your motor, they will keep your car maintained at no cost to you other than a monthly fee; that amount will be defined and fixed in advance (thus transferring the unknown risks to the new entity)
their customers will tend to be those who have deferred maintenance on their vehicles. they recognize that it is cheaper to transfer their maintenance liability to this new firm for a fixed amount rather than paying for the delinquent and accruing maintenance themselves, thus likely saving money - which means no profit for the new entity. which is also why they always soon close. it's a weak business model

while i am no fan of leasing, there are times when it makes since. a business may be strapped for capital and gets to write off the leasing/operating costs of the vehicle. someone needs/(wants?) a larger/(better?) vehicle than they can afford to buy, so leasing allows them to drive that larger/nicer car at a lower price point - at least for a while. and while incurring significantly more risk than when buying. the lessor gets to write off the depreciation of the vehicles that the non-business lessee would not otherwise benefit from. that is where much of the (perceived) discount comes from
i am about to purchase my (legally blind - that should scare you) mother in law's toyota as it comes off of the lease. it is just over three years old and has under 10,000 miles on it. it's a steal at $9,000. for her, she was at the end of her driving ability and wanted a reliable car at a time when the dealerships were unable to move any vehicle and were making great leasing deals - at lease for the leasee. it was wise not to purchase but to lease at that time and given her (unusual) circumstance

and is leasing all that different than buying? the buyer incurs higher monthly payments, (the non business buyer) does not get to write off the interest or the depreciation. in return, they may be able to drive for a period without having an installment. but in the end they wind up with a used vehicle with remainderman value. just like the leasee. so, before assuming leases are bad options, put pencil to paper and compare the projected costs both ways - and make sure you use realistic mileage figures. that's where many leasees get hosed at the end of their lease

 

[Mycroft]

Most of today's automobiles easily have a life expectancy of several hundred thousand miles. The trick is to buy a new car, not a used one, and maintain it exactly per manufacturers' specs. Many times, used cars have gone through any number of owners -- haven't been maintained -- have histories you don't know about -- and, all in all, have been somebody else's problems.

Would you let someone else "rent" your new car for $300 a month? If it's economical enough for you to consider that option, it's not going to be profitable to the renter.

PS -- I haven't the slightest idea why someone would choose to lease a car. Seems like a great way to have car payments for freakin' life.

I agree about the "new car" thing. I bought an Astro back in '95. It was pushing 200k miles a year and a half ago and I would be driving it today if I hadn't wrecked it. Now I have a 2010 Forester and I expect to be driving it 15 years from now...unless I wreck it, of course.

 

[Aunt Spiker]

Good points - it really is a bit impractical, isn't it?

 

[KevinKohler]

My wife bought her current car in 1997, a honda civic, and I bought my first NEW car in 2005, another civic. Both run great. Both HAVE required minor work done, but nothing an average person can't figure out how to do themselves with a basic socket wrench set, if they have the desire to do so. In addition, I have a 1976 Chevy Corvette (HARDLY known for their reliability, lol) that runs strong today, and ran plenty strong even before I overhauled the motor.

The people that end up with car problems, in most cases, simply didn't take thier 15-30K+ investment very seriously, and failed to properly maintain their vehicle. In a lot of ways, I blame the cars themselves...they are too good. Too easy. We've tried to idiot proof them, and in the process, made a bunch of idiots.

 

[DiAnna]

We have for the past 2-3 decades been in a position to purchase our new cars with cash, keep them well-maintained and since we aren't buying someone else's leftover headache, we have routinely driven them for 14-18 years. Every car. At the end of that time, when the poor thing is showing its age, we've squirreled away enough cash to buy another new car with cash, and off we go. No car payments, save a ****load of interest and finance charges, and we get outstanding use from all of our purchases.

 

[specklebang]

I'm glad I'm not the only one who refuses to assume debt. I decided long ago that if I didn't have the money saved up yet I just wouldn't buy it. Now, as an "old guy", I own everything outright and have no trouble living on my SS and some other revenue from rental properties (owned outright).

I have tried to ass along this concept and I get a taker now and thn but most people just go right ahead and buy $200K homes with 10% down and cars on credit. Then they wonde why they are stressed.

Hats off.

 

[KevinKohler]

I'm glad I'm not the only one who refuses to assume debt. I decided long ago that if I didn't have the money saved up yet I just wouldn't buy it. Now, as an "old guy", I own everything outright and have no trouble living on my SS and some other revenue from rental properties (owned outright).

I have tried to ass along this concept and I get a taker now and thn but most people just go right ahead and buy $200K homes with 10% down and cars on credit. Then they wonde why they are stressed.

Hats off.

The problem with this concept, as it applies to cars is that, in the meantime, while you are saving up for a car, how do you get around?

Average car loan is for...what, 5 years? So, let's say that you start saving today, for a honda civic, nothing to crazy...and you hope to buy it, with cash, in 5 years. Base civic, no goodies, is about 17K. 6 years ago, when I got my civic...EX model, which is more hp, etc, and more goodies...it cost me, brand new, 16K. That same model, today, is closer to 20K, brand new. So, someone socking away 350 a month or so, over a period of five years, from tonight on...is NOT gonna have enough to buy that civic.

And is still left with the issue of not having transportation to get to work.

 

[DiAnna]

The problem with this concept, as it applies to cars is that, in the meantime, while you are saving up for a car, how do you get around?

Average car loan is for...what, 5 years? So, let's say that you start saving today, for a honda civic, nothing to crazy...and you hope to buy it, with cash, in 5 years. Base civic, no goodies, is about 17K. 6 years ago, when I got my civic...EX model, which is more hp, etc, and more goodies...it cost me, brand new, 16K. That same model, today, is closer to 20K, brand new. So, someone socking away 350 a month or so, over a period of five years, from tonight on...is NOT gonna have enough to buy that civic.

And is still left with the issue of not having transportation to get to work.

I started out with a used hoopty. I had no choice. Many others don't either. I'm just saying that if people look ahead when they have a regular income and set aside as much as possible in savings, it will eventually be possible to save tens of thousands of dollars in interest and finance charges by purchasing a modest-priced new car for cash, and driving it probably 6 times longer than the average used car will last. By then, you should have saved enough for another new car, cash.

We were never rich. We both worked, raised 5 kids, saved every penny we could, were fortunate enough not to have any financial disasters and now have no mortgage and no automobile debt. :shrug:

 

[Helix]

for the most part, maintenance for a paid off (and well cared for) vehicle is less than a $300 monthly car payment. i just put $1,250 or so into my 1998 Jeep last year to fix the transmission, and i replaced the tires. but considering how long it has been paid off, that's far less than $300 a month.

another problem is that a lower monthly payment wouldn't cover the depreciation of a new car. and those who would most need the program might not meet the credit requirements.

 

[specklebang]

If you want to start out with a $20K car, you might be taking the better known path of debt.

My neighbor just bought a nearly pristine 1988 Cadillac for $1500.00. This will get her to work until she saves up enough to buy a newer car. Then, in the future she can buy a Scion Xb (my car of choice) for $19K.

The problem with this concept, as it applies to cars is that, in the meantime, while you are saving up for a car, how do you get around?

Average car loan is for...what, 5 years? So, let's say that you start saving today, for a honda civic, nothing to crazy...and you hope to buy it, with cash, in 5 years. Base civic, no goodies, is about 17K. 6 years ago, when I got my civic...EX model, which is more hp, etc, and more goodies...it cost me, brand new, 16K. That same model, today, is closer to 20K, brand new. So, someone socking away 350 a month or so, over a period of five years, from tonight on...is NOT gonna have enough to buy that civic.

And is still left with the issue of not having transportation to get to work.

 

[Thrilla]

I found this business model to be a bit intriguing.. this is local here in Austin, tx.

car2go Austin: Austin Car Sharing | Car Rental

 

[KevinKohler]

If you want to start out with a $20K car, you might be taking the better known path of debt.

My neighbor just bought a nearly pristine 1988 Cadillac for $1500.00. This will get her to work until she saves up enough to buy a newer car. Then, in the future she can buy a Scion Xb (my car of choice) for $19K.

Let me know how that 88 caddy works out for her, lol. Make sure she keeps an eye on the type of fuel she uses, and the oil...the Northstars are known for valve clog issues...and I also hope she doesn't live where this is a chance of snow. High torque V8 + FWD + snow = not going anywhere.


My point isn't to say that people shouldn't save their money, lol. My point is, telling people not to go into debt is just impractical. Not saying that debt is great, that you should pay for everything with money you don't have, either. All I'm saying is, in many situations, it's CHEAPER to go into debt for a new car, than it is to try to buy a used one with, say, 4K cash, and then save up, and try to trade that in after years of saving, etc. 4K cash is going to get you something from the mid 90s. And there is a 1 in 3 chance that the car was NOT well maintained.

 

[KevinKohler]

Not to thread hijack...and maybe this should be it's own thread...


What was everyone's car history?

My first car, bought in 1996 for 900 bucks, was an 88 Chevy Corsica auto with a V6. Car had NO BALLS at all, but, four doors, ran...OK...for 4 years, and wasn't hard to drive. Then, it developed a short, somewhere in the 3 or so miles of wiring that exists in post 70s cars, and killed the battery on a reg basis. Sold it for 900 bucks, lol. It's OK, I sold it to a used car dealer, who are all scum, so don't feel bad. Bought a 95 Oldsmobile Achieva, 5 speed, with the DOHC inline 4. It was also fairly slow, but it was a 5 speed, so a LOT more fun to drive, lol. I drove that from about 1999 till the tail end of 2005. That car made road trips from SC to FL, from FL to CT, it went all over the place. Broke down a lot. Everything I know about cars, I learned from that one, lol.

 

[beerftw]

i have never financed aa vehicle in my life,so ives never had a problem.ive always paid cash,from my 1970 340 duster to my 73 dodge my 78 dodge,my 60 dodge truck i got for free,i traded my 78 for a 87 mercedes 420 sel after i needes better mpg and my 60 finally blew an engine.after i joned the army i bought a 73 buick electra 225 with a 455 bigblock because it was the cheapest thing i could find,5 mpg but that was a nice car and fast for 7k pounds!!!!!i sold the buick before deployment and after i got back i bought i 95 lincoln for 1900,then a 99 suburban for 5500 in mint condition,then a 73 dodge charger which i had to sell cuz i had no where to put it ~~~


i guess the point is if you need a car and you dont have alot of money pay cash!ive seen alot of military guys buy a brand new challenger to impress the ladies,but id always laugh at the cuz the ladies want to do something other than look at a car they cant ride in cuz the owner spent all money on payments insurance and gas and is flat ass broke!!!.