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Buy now or in a year?

My wife got in a car accident last week and we just found out our 2010 Prius (< 10K miles) has been declared totaled. It’s insured so we shouldn’t lose much. We are going to buy a new replacement vehicle. Now the question…

When should we buy a new replacement vehicle? We have a paid-for-by-the-insurance-company rental through the end of July. All of August we’ll be in Peru doing research. We’re planning on spending Dec 30, 2011 through Aug 15, 2012 in Africa. So should we buy the replacement car now or in August 2012 when we return? We need a car daily from Sept 1, 2011 through Dec 30, 2011. We have someone (my wife’s parents) who is willing to host a car in their driveway (deep in the country) while we’re gone and occasionally turn it on. To complicate matters further, we’re currently living in Boston (extremely high excise taxes!) but moving next August to Connecticut. As I see it, if we waited to buy the new car we would save a lot (maybe $700?) on insuring the car while we’re away, save over $1000 on excise/title/registration in MA and of course save on depreciation, lost time in the warranty period, etc. Of course, the corollary of that is that 4 months is an awkward amount of time to need a car … it’s too short to get a lease (even to take on someone else’s old lease) but pretty long for a rental.

So, should we buy a car now or in a year? If we wait, what’s the best way to have a car for the 4 months we’d need one this fall?

1: it’s never a good idea to just turn a vehicle on while it’s sitting, it needs to be driven for several miles at a time if you’re gonna start it up. Otherwise, put StaBil in the gas and just let it sit.

You might look into a ZipCar kind of business for your daily car needs between Sept. and Dec.
Personally, I’d wait until I returned from the trip to Africa before I bought anything

If you end up buying something, do not buy a hybrid and then park it at your in-laws. It could easily kill the very expensive battery. But I’d sure try to figure out how to avoid buying.

Wait for a new car if that’s how you want to spend your insurance settlement. If you actually live in Boston, you can use public transportation for 3 months.

Best time to buy is either right when the new models come out and you buy LAST YEARS MODEL…

Or wait until January or February…

Another option to look at - see if you can assume a lease from someone at a swap-a-lease type location. You might be able to find a 1 year lease at a reasonable price considering how few miles you’re likely to put on the car in that time frame. A search at a local shop here shows prices of $230-280 per month easily attainable… If you could find one in that price range, you’d be looking at roughly $1000-1200 in costs to lease, offset by significantly lower insurance, tax, and depreciation costs…

It sounds to me like you’ll have some need of a car for considerable periods of time, and you might just find a good deal through a place like that to save yourself even higher depreciation costs or buying at a rather inopportune time (new cars aren’t exactly on fire sales right now)…

I agree with Tex, don’t buy a hybrid and leave it parked. You want to keep those batteries charged up as much as possible.

I would wait. Between the two of you, you should be able to find a way to share one car for four months. It will involve planning ahead, and making fewer trips on impulse, but couples, and even families, have gotten by for a lot longer than four months with a single car. It might mean going out of your way to drop off and pick one of you up, and will probably involve putting a lot of extra miles on the one car, but the money you save should make up for that.

As a note — it’s our only car, so we currently have 0 cars. We also have a 3 year old. We do live within Boston itself and public transport is relatively available, but hard to work all the time with a 3 year old.

I think you are going to need a car now, but I don’t think you should buy a new car to replace the Prius. Check out long term rental rates from places like “Rent-A-Wreck”. They rent used cars and keep rates low. If you must buy, consider going for a 4 to 6 year old used car. Buy it and sell it before the time away in Africa. When you return to the US use the saved proceeds from the insurance for the Prius to buy another car.

If you feel you have to buy a new car now, don’t get a hybrid. Just a standard Civic would get good mpg and would hold up better in storage while you are away.

I think we’re probably going to go with a very old car or Rent-A-Wreck type place. As a side note, Priuses apparently do hold their value quite well. Even after accounting for the $500 insurance deductible, the insurance company is paying us $832 more than the total purchase price of the vehicle when we bought it a year ago (as in the TOTAL we spent…car, fees, taxes, title, registration, etc). Given that it’s a Prius, I estimated how much we spent on gas and it looks like operating the car for a year cost us a grant total of about $40 (excluding car insurance and parking tickets).

Before you completely abandon public transportation, don’t forget that that includes taxies. I know taxies aren’t cheap, but if you’re not using them very often, it could be the cheapest option.

You need a car for about 120 days. If you can use a bus or MTA for getting to and from work, figure that cost and add a $10-15 taxi ride every other day and the total could be less than what the cheapest car would cost you.

Ryan - it isn’t just the Prius… a lot of cars are now selling for more used than they sold for a year or so ago. I constantly see “nonnegotiable” prices for 2010 Mazda6s like ours for more than we paid…

Ryan, I was thinking about this last night, and I came up with a better recommendation.

Buy yourself a reliable used car. If you can find a Civic, Corolla, Accord, or Camry that’s in good shape with 100,000-150,000 miles on the odometer, that would be a good bet. These cars, if well taken care of, can make it that far and still be in good working order, and they tend to hold their value. They also have already substantially depreciated. Don’t shy away from a potential car because of age. I would be comfortable buying an 8-10 year old car like this if it was well maintained. Also, make sure you have a potential used car thoroughly checked out by YOUR mechanic before you buy, regardless of what the salesperson tells you about the condition of the car.

Take a look at the attached depreciation curve. Your goal should be to buy at point A, and sell at point B, right before you leave. (Both points are approximations, and the curve isn’t drawn to scale, but I think you will get the point.) If necessary, your in-laws can sell the car for you after you leave.

If you end up liking this car, you might decide to store it and keep it. If you do that, don’t ask your in-laws to start it up every once in a while. Buy and use some fuel stabilizer, following the directions on the bottle to the letter, and hook-up a good trickle charger to the battery. You might need to use a double dose of fuel stabilizer, but as long as you do the proper preparation before you store it, it should start right up when you get back.

Thanks Whitey and others for the good advice.

I looked at renting for 3 months from a mainstream rental company. The cost for a compact would be about $15,000. I doubt that Rent-a-Wreck is an order of magnitude less. As bscar suggested, ZipCar might be a good option for you unless you need to get the child to day care daily. A taxi might work then. Check out the cost for a taxi for your expected schedule and see if it is less than buying a car for 3 months. Remember that you will need to sell the car, too. You might have to advertise it as soon as you buy it.

Rent-a-Wreck is $575/mo + tax. Mainstream companies I looked at were about $1,000/mo, give or take $150 depending on the company. Where were you ever quoted $15,000 for three months??? That would come out to a daily rate of more than $150!

He must have been quoted with collision damage waiver.

I’d buy a $1,500 car off Craigslist then sell it next year for $1,500. '92-'95 Honda Civic.

“Rent-a-Wreck is $575/mo + tax. Mainstream companies I looked at were about $1,000/mo, give or take $150 depending on the company. Where were you ever quoted $15,000 for three months??? That would come out to a daily rate of more than $150!”

It was on line at Hertz with pick-up in downtown Boston. Since I’m not renting for 3 months, I didn’t care to do any more than that.