Can You Drive A Brand New Car For Free? It Depends On “You”
By September 4, 2017on
$265 a month on a three year lease. No gas. No maintenance. No repair costs. Not even a limit on the amount of miles you can drive.
This 2017 Hyundai Ioniq is the rolling version of an accountant’s wet dream. When you drive it, Hyundai will actually cut you a monthly check for the energy you need to take this electric car from Point A to Point B. Everything else from tires and wipers, to fluids and filters of the non-oil variety, are all included right up to the point it hits 50,000 miles. The range according to Hyundai is 127 miles which covers well over 97% of the driving most folks do on a daily basis. Other than insurance, you’re pretty much looking at a $2500 down payment and $265 a month for 36 months. That’s it. Of course, you always need to be aware of the difference in safety features, if you were unlucky enough to be caught in a car accident you’d have to consult a lawyer that could help you with understanding how to proceed legally which could mess with the numbers a bit. But I digress.
There’s only one small problem with all those big numbers.
A beater is cheaper. If I drove, say, a 10 year old Nissan Sentra for 15,000 miles a year, I would likely average just under $3500 a year. As a former financial analyst, I love crunching the numbers and finding a crafty way to get money back into my savings account. But there’s a brutal reality to comparing new cars to well-used ones. The new car is always at a dizzying disadvantage.
Except in this case. A 10 year old Japanese compact is cheaper, but the difference only amounts to around $400; just over a dollar a day. $400 more to drive a brand new car over a beater is tempting. Even for a tightwad like me. A dollar and change a day isn’t going to destroy my wealth. Or would it?
There is an age old saying of how small leaks can sink big ships. I’m not sure if a dollar bill can really plug up a leak on the S.S. Lang Family, but when you’re middle-class everything helps. So I decided to take a deeper dive and figure out if I could, somehow, some way, drive this brand new car for free. When I say free I mean nothing. Not even a plug nickel. It turns out it can be done, but you have to jump through enough hoops to become a borderline circus animal.
So ask yourself these questions if you want to make this type of deal pay off.
Do I Like People Enough To Tolerate Them On My Commute?
Carpools were a thing in my family. My father called his carpool ‘The Freedom Train!’ since it would free him and his immigrant friends from the clutches of kids and nagging spouses. They would talk and make jokes on their daily drive but in today’s world, we give these arrangements a more fashionable name, “rideshares”.
Most folks spend their non-driving time playing on their phones. So ask yourself if you’re okay sharing your commute with that modern quieter commuter? That will be the easy part. The hard part is not just getting someone, but several someones to go along for the ride.
Am I Good At Marketing? I Mean Really, Really Good?
I created several Facebook posts and Craigslist ads to gauge interest. and thought that at $99 a month, or $25 a week, I would fill up my empty seats in no time.
No! Nein! Nyet! Even though I live in metro-Atlanta which has nearly six million people, I didn’t get a single response. But let’s say you already know three folks who don’t want to drive and they are willing to pay $99 a month to help you with expenses.
That’ s $297 a month. Just enough to cover your $265 monthly payment with $32 a month left over. That’s one hell of a chunk, but you still still have a deficit of $3,652 overall, give or take a few dimes. So what else can you do?
Do I Have My Own Business? Am I Willing To Start One?
I won’t sugarcoat this. A side income can take years to bare fruit and in the case of car ownership, you have to show that you need it for your business before you can take a tax deduction. Casual incomes are almost always low and unfortunately, you can’t use this vehicle for Uber, Lyft, or any other minimal income taxi-esque activity.
However that doesn’t mean a casual income can’t put a four-figure dent on that $3,652 deficit. My wife and I have been tutors, mystery shoppers, extras on movie sets, and eager $100 to $300 participants at market research companies. All that travel to-and-fro is tax deductible. That means if you decide to become a mystery shopper for fast food, you can deduct the mileage you drive from your home to that restaurant. Even if it’s on your way to your regular work. The IRS offers 53.5 cents a mile which means if you decide to, say, become a professional tutor, you can make that part-time work worth your time.
Do I Live In A State That Has Cheap Weed, Mudslides, And Facebook
Residents of the state of California get $2500 back in the form of a state tax credit. Residents of Colorado get an even larger $5000 back, while those few folks who still live in Delaware can get a healthy $3500 tax credit on a light-duty electric vehicle. Overall 17 states offer incentives, but only these three put you anywhere near the drive-it-for-free range.
So Who Out There Should Buy An Electric Car That Almost No One Else Has Bought
If you’re willing to:
- Lease it on the cheap
- Consider ridesharing or
- Are self-employed and will use the EV for your business.
- You may also be a fan of electric vehicles, and finally
- Hating the Arab dictatorships and Russian Mafia would certainly help.
Every electric vehicle that isn’t a rolling status symbol has their sales numbers crater once the state tax incentives expire. The Hyundai Ioniq EV may be the exception though because they’re offering an unusually dirt cheap lease combined with unlimited mileage on an all-inclusive deal that covers all the running costs on the vehicle up to 50,000 miles; except insurance. And if for whatever reason I want to give up my lovely Hyundai I can always talk to the folks at SwapaLease (https://www.swapalease.com/lease101/guide/chapters/how-to-exit-your-lease-early/) to help me get out of it. That makes it cheaper to own than a Smart car, which is no easy feat given that Mercedes is practically giving those away too, It’s also a far better deal than a typical 10-year-old beater if you go beyond the numbers.
So should you do it?
If you’re a tightwad, cheapskate, or penny-pincher, this lease deal will likely be light years better than a Chevy Volt or even a Toyota Prius Prime based on the numbers alone. It’s doubtful that Tesla will be able to come anywhere near this lease amount with the Model 3 because, to be frank, that model already has over 400,000 customers on their waiting list. Not a single one of whom is going to lease what will primarily be a $40,000+ vehicle that is either paid in cash or financed. The Ioniq amounts to an $11 a day new car before tax credits as a three year lease deal. It’s a loss leader to the extreme. If you have an ecological bent and hate beaters, it’s hard to do any better if you plan on driving a lot and don’t mind the limited range.
That’s a lot of ifs so why not throw one more. IF you are ready to buy an EV and all of the above describes you, the Ioniq will likely be the perfect opportunity to hit ’em where they ain’t and get yourself a daily driver that cost less than half the operating cost of the average used car. In today’s world where a new car now cost over $33,000 before you pay taxes and bogus dealer fees, that’s an amazing feat.