This looks sensible and will probably save you money compared to buying a car, as long as neither of you use the car very often. One option to consider is to have them keep full ownership of the car and you pay a per-mile rate. Employers pay a standard rate of $0.56 per mile when an employee uses a private car for work. This is probably a bit higher than true cost, but they are taking the risks of unexpected repairs and such. That arrangement would be easier to get out of if needed: You just stop driving it.
Second this. The lawyer part of my brain says to draw up a written contract to make sure you get your share of the cars value back at the end, which just adds to the complexity and tension of the situation. But not drawing up that contract is placing a lot of trust in the housemate. A simple per-mile rate seems much simpler and easy to get out of, and the IRS provides a standard rate for that.
Yep, and the problem with these ‘small deals’ is $3000 is enough that an acrimonious housemate might not give you your money back. But it’s small enough to not give you meaningful satisfaction were you to pursue this in court. (Because of overheads)
Paying 56 cents which is an overpayment vs the true cost which is about 20 cents is paying to avoid this risk. If you drove 5000 miles a year then you’d be paying $1800 extra.
Depends on mileage driven then. But the housemate should rationally accept 56 cents.
This looks sensible and will probably save you money compared to buying a car, as long as neither of you use the car very often. One option to consider is to have them keep full ownership of the car and you pay a per-mile rate. Employers pay a standard rate of $0.56 per mile when an employee uses a private car for work. This is probably a bit higher than true cost, but they are taking the risks of unexpected repairs and such. That arrangement would be easier to get out of if needed: You just stop driving it.
Second this. The lawyer part of my brain says to draw up a written contract to make sure you get your share of the cars value back at the end, which just adds to the complexity and tension of the situation. But not drawing up that contract is placing a lot of trust in the housemate. A simple per-mile rate seems much simpler and easy to get out of, and the IRS provides a standard rate for that.
I think placing this trust in our housemate is justified, given how well we know them and our level of community overlap.
Yep, and the problem with these ‘small deals’ is $3000 is enough that an acrimonious housemate might not give you your money back. But it’s small enough to not give you meaningful satisfaction were you to pursue this in court. (Because of overheads)
Paying 56 cents which is an overpayment vs the true cost which is about 20 cents is paying to avoid this risk. If you drove 5000 miles a year then you’d be paying $1800 extra.
Depends on mileage driven then. But the housemate should rationally accept 56 cents.