I’ve got a buddy who lives in downtown Chicago and is in need of a car for 3 years, as his wife is now going back to school, which will require a drive. Prior to this they haven’t had a need for car as both use public transportion.
The thing of it is he needs 20k miles per year. He’s not interested in buying as this car is only needed for the 3 years she’ll be in school. What should he be looking at?
He’s wanting to spend $300 / $350 max with the usuals due at signing (title/doc/tags).
Sedan/Small SUV would be fine, he’s not picky, I just don’t know who to look at seeing as he needs 20k miles to avoid exceeding a standard 15k lease.
Leasing probably isn’t for him then. Chicago double taxes leases, so the effective tax rate is something like 18%. Combined with 20k miles per year, it’s simply cost prohibitive. Look into a Honda Fit. I’ve seen analyses of using them as a commuter car, and it’s by far the best value
He should buy a beater Honda Civic for 7k and then just sell it in 3 years. Depreciation won’t be so bad and if he gets 3k for it (reasonable) then he would have only spent 4K for the 3 years of actual driving which beats any lease deal out there.
20k a year on any car with that high of a tax rate is going to be impossible to find. You’ll be in the most basic of car so may as well get a used basic beater if it’s just for transportation.
I got a Honda Clariy Plugin Hybrid -Touring model here in Maryland @355/month with no downpayment. everything included(taxes etc) for 18000miles/year. I am not sure about taxes and all in Chicago. But it could save you some money on gas as well. It is spacious. I travel almost 100miles per day and 4 days/week. I am sure 18000 wont be enough but i may get another car after 2 years which should reduce some miles on this car.
You should have been more explicit to start with! I assumed you were talking about SALES TAX. Stating that…
“Chicago double taxes leases, so the effective tax rate is something like 18%.”
tells me absolutely nothing. How does it double tax? Next time, provide detailed information. The burden of proof is on you, not me. Did you know that Illinois levies tax on tax? That’s is exactly why the 9% sales tax rate translates to an effective rate of 9.9%.
I would not get a “beater” anything to trust my wife in for 20k/yr to reliably get to school. I would suggest something like a CPO S60 for under $20k with its unlimited miles warranty. Could maybe get pretty close to breaking even in 3 yrs on a 5-yr note.
Another option is to do a 15k/year lease but budget for the 15k mileage overage. Figure at $.25/mile, 15k mileage overage is $3,750. Or even better, prepay the overage and I think some captives will give a discount.
The chicago tax thing would give me pause on a lease though - you’ll already be paying a hefty hefty premium.
Meh. My wife dailies a $2500 05 Odyssey Touring with 235k. 8 months/20k miles since purchase never been stranded. I would trust that over a used Volvo with a warranty which requires actually getting said Volvo to the dealer if/when it breaks and securing alternative transportation. I like Volvo’s but I’ve yet to meet one that I trust.
$300/mo gets you one hell of a nice used car. Hell, $300/mo gets you a brand new small car or base midsize sedan on a 60mo loan. Pretty sure you can get a new Cruze for like $12k.
Leasing just doesn’t make any sense here within the confines of this payment. You can prepay Honda miles at .10 but I still don’t see it working even with a base Civic.
@OP, you might want to look in to decently used civic or corolla either ones would be in the price range, least amount of mechanical issues and will easily last the 60k miles they plan to drive for next 36 months.
I agree, I would even suggest to go a little further and pay cash for something from the late 2000s. Eve.n if it needs any kind of maintenance, it would be cheap and affordable to do.
2 years ago, i purchased a one owner 2008 accord exl v6 with 65k miles for 10k cash, sold it after 18 months for $8500 after putting 15k miles. Cleanest used car which served the purpose for me at the time and cost me a little more than $100 a month, after factoring in the new tires and brakes.
