Tuesday, June 21, 2005
Carless in California
I'm going to San Jose, California from August to December this year, and I need to get a car to commute to work and dances and such. In recent days, I've been trying to work out exactly how to solve this problem. I figure that one day, somebody may be in a similar position, and this will be able to save them some time and effort.
If you need a car for 5 months, the everybody in the automobile market hates you. I can't figure out why. As far as I can tell, you have no good solutions. You have several options --- You can buy, you can finance, or you can rent.
Buying. One option is to go to California, and buy a car. If you want to keep the car, this is a great option, although you will have to drive or transport it back to your own state when you're finished with your internship. If you want to sell it at the end of your internship, you run two risks: (1) You need to sell it privately, in which case you might not find a buyer before you have to go home, or (2) You need to sell it to a dealer, and take a several-thousand dollar loss (according to Kelly Blue Book rates). Another option is to buy a clunker. If you can find a decent enough car for 3000-4000$, you may be in better financial shape than if you, say, rented a car...But you may lose if the car ceases to function immediately after you buy it.
Financing. No dealer will loan or lease a car to you for 5 months, apparently, so you have to finance for the traditional 24, 36, or 60 months. If you want to keep the car, you need to choose a term that will keep the payments reasonable for you. Otherwise, your best bet is to do a "lease transfer," essentially selling the car/financing-agreement to somebody else. There are websites that provide online lease transfer markets, but none of them is very large. The odds of not finding a buyer for your lease seems fairly high.
Another option is to look for somebody trying to transfer their lease, that has only a few months left on their lease. This would be a really good idea if you can find such a deal, but there are two drawbacks. The first is the small size of the transfer markets. The second is the fact that there's little incentive for somebody with a few months remaining on their lease to go through the hassle to transfer the lease.
Renting. Apparently, all major car rental agencies have long-term rental programs. The rates are much more reasonable than their normal daily rental charges, which is a good sign. You can go with the standard rental agencies (Hertz, Budget, Avis), which will be about 600$ per month for an economy car. Alternatively, you can go with a company like Rent-a-Wreck, which will be about 350$ per month.
The major complication with renting is insurance. If you get the rental company's collision or liability insurance, it will surely cost you a huge amount of money, at least 9$ per day, or about 300$ per month. If you have your own insurance, you have to make sure that it covers a rental car for such a long time period. My carrier (geico) only provides liability for rental cars, and no collision protection. Making matters worse, insurance agencies will typically refuse to insure a car that you do not explicitly own, so you cannot simply add the rental car to your insurance for a few months. This fills me with deep hatred and loathing for insurance companies.
The only insurance option that I found that seems reasonable is to rent the car with a credit card that provides collision insurance. My Chase VISA card provides such insurance, but will only cover rentals for up to 15 days. My Discover card, however, will cover rentals for up to 31 days. The solution, apparently, is to return to the rental agency every month, and re-rent a car.
I pray to the greater dieties that perhaps, one day, this story will become defunct, because short-term car rentals or financing will become doable. Until then, hopefully, this will save somebody the pain and suffering I had to deal with.
If you need a car for 5 months, the everybody in the automobile market hates you. I can't figure out why. As far as I can tell, you have no good solutions. You have several options --- You can buy, you can finance, or you can rent.
Buying. One option is to go to California, and buy a car. If you want to keep the car, this is a great option, although you will have to drive or transport it back to your own state when you're finished with your internship. If you want to sell it at the end of your internship, you run two risks: (1) You need to sell it privately, in which case you might not find a buyer before you have to go home, or (2) You need to sell it to a dealer, and take a several-thousand dollar loss (according to Kelly Blue Book rates). Another option is to buy a clunker. If you can find a decent enough car for 3000-4000$, you may be in better financial shape than if you, say, rented a car...But you may lose if the car ceases to function immediately after you buy it.
Financing. No dealer will loan or lease a car to you for 5 months, apparently, so you have to finance for the traditional 24, 36, or 60 months. If you want to keep the car, you need to choose a term that will keep the payments reasonable for you. Otherwise, your best bet is to do a "lease transfer," essentially selling the car/financing-agreement to somebody else. There are websites that provide online lease transfer markets, but none of them is very large. The odds of not finding a buyer for your lease seems fairly high.
Another option is to look for somebody trying to transfer their lease, that has only a few months left on their lease. This would be a really good idea if you can find such a deal, but there are two drawbacks. The first is the small size of the transfer markets. The second is the fact that there's little incentive for somebody with a few months remaining on their lease to go through the hassle to transfer the lease.
Renting. Apparently, all major car rental agencies have long-term rental programs. The rates are much more reasonable than their normal daily rental charges, which is a good sign. You can go with the standard rental agencies (Hertz, Budget, Avis), which will be about 600$ per month for an economy car. Alternatively, you can go with a company like Rent-a-Wreck, which will be about 350$ per month.
The major complication with renting is insurance. If you get the rental company's collision or liability insurance, it will surely cost you a huge amount of money, at least 9$ per day, or about 300$ per month. If you have your own insurance, you have to make sure that it covers a rental car for such a long time period. My carrier (geico) only provides liability for rental cars, and no collision protection. Making matters worse, insurance agencies will typically refuse to insure a car that you do not explicitly own, so you cannot simply add the rental car to your insurance for a few months. This fills me with deep hatred and loathing for insurance companies.
The only insurance option that I found that seems reasonable is to rent the car with a credit card that provides collision insurance. My Chase VISA card provides such insurance, but will only cover rentals for up to 15 days. My Discover card, however, will cover rentals for up to 31 days. The solution, apparently, is to return to the rental agency every month, and re-rent a car.
I pray to the greater dieties that perhaps, one day, this story will become defunct, because short-term car rentals or financing will become doable. Until then, hopefully, this will save somebody the pain and suffering I had to deal with.
// posted by David McWherter @ 6:28 PM 
