[BobM]

My daughter needs a car for the summer and to take back to school (RIT) with her in the fall. We have about $8-9K pooled for this (@ $5K is her savings). She wants good gas mileage (so 4 cyl) and room to haul (so probably small/crossover SUV).

Here are the options - what do you advise?

(1) A used crossover SUV @ 8-10 years old with 100K miles will run about $8-9K. Buyer beware (especially after Sandy) and guaranteed to need maintenance at some point.

(2) I've heard that you can lease 3 year old cars coming off their first lease for about $89/month. Don't know too much about this option - just heard it was possible.

(3) A new car lease would run about $189/month for 3 years woith $2K down, but then she would have spent about $9K with nothing left at the end. But it is under full warantee, brand new and wouldn't tap out all of her savings up front.

Thanks,
Bob

[mav52]

A massive old 54 Caddy should the trick.

Anyway something safe and economical and carry's a good insurance rate.  Before you buy, check with your insurance company on the insurance for the car your choosing.

[macrojack]

Toyota Matrix is basically a Corolla underneath so you get the reliability, economy and resale of Toyota with the versatility of a 4 door hatchback. It's front wheel drive, of course, to get her around in the Rochester winters and it has all the de rigueur AC, iPod, etc, connections. The Pontiac Vibe is the exact same car.

As for Sandy, I would buy privately and have it checked out by the Toyota dealer or buy directly from the Toyota used lot. Mine was a 2004 but they made that identical car up until maybe 2009. Perhaps you can find her a certified used one if you are worried about getting a lemon.

You could also take a vacation this summer to some dry place out west, buy a car for her, and drive it home.

Another thought would be a used Prius. I have one now and it has been utterly trouble free for the last 4 years of ownership. She might be mortified to drive an old people's car but chances are the actual driving experience would win her over.

Here's the Craigslist for my area: http://westslope.craigslist.org/search/cta?query=Toyota+Matrix

This deal looks good to me: http://boulder.craigslist.org/cto/4470802054.html

[ctviggen]

I'd look into hatchbacks, too.  I had a Saab 9-3 (thus my moniker "Viggen"), and it was great.  It held 4-5 people yet I could put the seats down and haul tons of stuff when necessary, and it got way better gas mileage than an SUV.  99% of the time, there's one or two people in the car, and it doesn't make sense to have a gas hog.  For instance, a VW golf might work well.  You should (according to Edmunds) get a 2010 VW golf for about 10k with 50k miles on it.  (Not sure if that's really true -- you'd have to look.)

So, is she using savings to buy this?  That's a tough call, as if she uses up all her savings on a car, she has nothing left.  On the other hand, if she leases, she then has nothing left and she won't be financially sound for at least another year or probably more.  To me, (2) doesn't seem possible, but I've never looked into that option. 

What about the option of buying by financing?  She could put a lot down (say, 10k), but then make payments.  She could use you as a cosigner and build her credit at the same time.  The interest rate is low now.

[roscoeiii]

I'd stay away from VW due to repair cost and reliability. 

How important is snow driving? At RIT, I'd think about a Subaru.

[Big Red Machine]

Lots of used Yukons out there in that range.

Go Tigers!  My alma mater.

[HsvHeelFan]

I've bought cars for kids to go to college in, in the past couple of years.

My overall requirement is:

RELIABILITY!

You don't want your kid broke down on the side of the road, at night, 4 hours away from you.

Be sure to sign them up for AAA roadside assistance.

I bought one of them a Nissan Altima and the other has a Honda Accord.   One was a 2008 model and one a 2009 model.  Both had 60K miles or so on them.

Here's how I buy cars.  Sign up for CarFax and if you're really interested in a car, run the CarFax.  Look for regular maintenance visits to a reputable garage or the dealer.    If the mileage and visits aren't evenly spaced, pass on the car.  If it's had a bunch of owners, keep looking.

If the car has a clean CarFax with no reported damage, find a good local garage that will do a pre-purchase inspection.    Have them go over the car carefully. 

Then, take it to a Body Shop and let them know that you want a pre-purchase inspection as well.  Body shop guys can almost instantly tell if any part of the car has been repainted and even if fenders have been changed off.  My local body shop doesn't charge me for this, but it only takes him 10 minutes or so and I also slip him 20 to 30 dollars for his time.   

One of the cars that I purchased had a clean carfax, but the owner's wife ran into the side of the garage with the front fender and he had one of his buddies fix it.  They effed it up.   That's when I quit trusting CarFax by itself and added the Body Shop stop to the pre-purchase ritual.  I paid to have the body shop re-do that left front corner correctly.  The main problem is that the car was metallic silver and in overcast conditions, the metallic flakes in the silver weren't oriented like the other body panels.   This caused the fender, hood and nose, on that side to appear darker.  Mrs. HsvHeelFan was NOT happy, so we paid to have it redone.

HsvHeelFan

[BobM]

Thanks for the advice guys. Yes, reliability is paramount, which is why a 10 year old used car might not be the right move. According to websites that compare and advise on "lease" vs "buy new" they recommend the following

Buy if:
- you can put down a decent downpayment
- you can afford higher monthly loan payments
- you plan to hold onto a car for more than 5 years
- you drive a lot of miles

Lease if:
- you have a small downpayment
- you want lower monthly payments
- you want hassle free maintenance
- you won't exceed the mileage limits

My daughter fits squarely in the lease camp. My only concern is she won't have any residual car value at the end of the lease, but she is likely to be working full time and making more money than she does as a student, so she could then buy a new car and finance it.

I'm seeing Memorial Day lease deals in my area (probably teasers to get you in and they are all gone, but we will see) showing @ $100-150 month with $3K down. Now that fits our budget nicely and she gets a reliable new car.

Like these (all 2014 models) that should fit her need nicely:
- Subaru Forrester $9/month with $3k down 36 months
- Ford Escape $119/month with $3.1k down 24 months
- Honda CRV $109/month with $3k down 39 months

[roscoeiii]

I'd rather have an asset at the end of 4 years, instead of a lease.

Loads of very reliable cars out there that are 10+ years old. If you factor in maintenance and the eventual repair costs you are still coming out ahead buying.

I drive a 1997 Honda Accord wagon (last year they offered a wagon option) and it runs great. You'd never guess it has 180,000 miles on it (!).

Certified pre-owned may be another option.

[Gzerro]

Americans waste more money on cars than just about anything. My Dad had a motto about cars, make due with what you can pay cash for. The amount of interest, finance charges, and depreciation people spend on changing out cars more often than necessary over a lifetime is a huge amount of money. Not to mention the temptation to buy more than is necessary just to keep up with the neighbors.

Old cars are a lot more reliable than they used to be, and with cell phones breaking down is just not that big of a deal on the rare occasion is occurs.

This is a great time to instill a lesson about financial responsibility. Pay cash for something you can afford.  $10k is more than enough for a fantastic used car. In fact I would recommend you spend $5k at most, and save the rest for the down payment on her first house.

Don't teach her how to give away her financial future for a small amount of satisfaction today.

[Gzerro]

According to websites that compare and advise on "lease" vs "buy new" they recommend the following

Buy if:
- you can put down a decent downpayment
- you can afford higher monthly loan payments
- you plan to hold onto a car for more than 5 years
- you drive a lot of miles

Lease if:
- you have a small downpayment
- you want lower monthly payments
- you want hassle free maintenance
- you won't exceed the mileage limits

That is propaganda from the National Auto Dealers association.

A better way to look at it - "Never borrow money to purchase a depreciating asset".

An article that may be more useful:

http://www.daveramsey.com/article/the-truth-about-car-payments/lifeandmoney_automobiles/

[sounddog]

You should check out Consumer Reports on the reliability of the model(s) you are considering. I'd also suggest that you check out the model's crash test results (both NHTSA and Insurance Institute ratings). As a general rule, I would suggest Japanese cars. +1 on Subarus. I also wonder if an older Honda Fit would "fit" your budget (sorry for the lame pun).

[LadyDog]

With I do not necessary disagree with the logic, with used car rates hovering around 2.65%, even borrowing money is not throwing a whole lot out the window.

[Bob in St. Louis]

Find out about the auto repair facility near the college. I work at a Volvo and Saab dealer. That puts me two hours away from a couple large colleges in Missouri.
Imagine how many pissed off Dad's call me when they're out of town and I'm the closest dealer to have their kid's broken down car serviced.

As far as "what kind of car", that's one of those questions like "what kind of speaker cables should I buy". All you'll get are fanboys and haters answering that question.

[BobM]

We are Subaru owners and absolutely love their cars. My wife thinks the Imprezza would be ideal for her. About $18k or thereabouts for a base 2014 model works out to a monthly payment of about $300 with a deposit of $3k for 5 years if purchased and financed. That's still high for a college kid with little savings and no real job yet.

A 3 year lease works out to less than $100/mo with 3K down, and that is do-able. A finance lesson in "buying value" is not appropriate if it can't be afforded at this point. A better lesson is staying within your budget.

[mresseguie]

Gzerro and I must be long lost brothers. My parents instilled in me the same values as his!

Our last four vehicles were paid for with cash. No BMWs or Mercedes here:'96 Nissan, '03 Honda Odyssey, '03 Honda Accord, '07 Toyota Tacoma. The first three were new; the Taco was 2.5 yrs old. The Nissan was devoured by a mudslide, but the others are still with us. In fact, the Odyssey (136k miles) is taking us for a road trip right now.

I can't say enough good things about Honda vehicles or Subaru (my father drives a Forrester).

I recommend (for whatever my opinion is worth) buying a quality used car from an owner for the best deal. Definitely have it inspected before handing cash over. Leasing is a waste of money in my opinion.

Best of luck!

[Gzerro]

With I do not necessary disagree with the logic, with used car rates hovering around 2.65%, even borrowing money is not throwing a whole lot out the window.

You aren't taking into account that taking on debt also usually means people overspend. Then they end up with the bigger expense of depreciation on the value of the car, which on new or late model cars is much more than the interest - 25% day one if you buy from a dealer. Also, just the sales tax in many states is up to 9% of the purchase price thrown out the window before you even drive away.

I am sorry if I come on too strong. As a finance guy, I have had many people come to me over the years with their financial problems and overspending on vehicles and credit cards is usually the source of their problem - regardless of income level.

[Gzerro]

A better lesson is staying within your budget.

Agreed 100%. The OP has $8-$9k saved which is more than enough for a reliable car without taking on debt.

[Doublej]

When you are paying $50k+ year for an education do you really want your daughter to have to deal with the statistically increased probability that the 10 year old used car will break and she will need to have to deal with the repair to save a few bucks and it's a day before a final and 2 degrees outside at midnight?

I'd lease a car model that has a nearby reputable dealer and a warranty. Then there should be no hassles for her in the unlikely event that any problems arise.

[S Clark]

A Honda Fit or the equivalent Toyota or Subaru.  You should find something with under a 100k, have a bit left over, and be reliable for the rest of her college and even a couple of years beyond. 
It's a good time to teach her that a car is transportation, and not part of her self image.