Quick Resale - Buy New or Used

I need to buy my first car within the next couple weeks, but will have to resell it in about a year and a half because of work. Is it better to buy a new or used car? I have the cash to buy either, but would prefer a lower financial input. I’m looking at Hondas and Toyotas, which depreciate less than other makes, but I’m still worried that there will be a lot if I buy a new car. Making this more confusing, the prices on new cars are really good right now, and the prices of used cars are fairly high. There isn’t a whole lot of price difference between the two in many cases. Thoughts?

A used car will depreciate less than a new one. Used cars cost less than comparable new ones. I’d buy a used car. Maybe 5 or 6 years old so that much of the depreciation is already gone.

Buy a used car. The first-year depreciation on a new car is terrible. Why lose all that money?

What about a lease? Maybe you could work out a better deal on a short-term lease.

I was in that position once and ended up leasing a car for one year. I got a Pontac which had been reposessed by the dealer from a guy who could not make his lease payments after 2 years. I finished the lease for the dealer. It was less hassle than buying and selling and probably cheaper too. The other alternative, as suggested, is to buy a 5-6 year old car.

I agree with the others - this is the perfect situation to lease a 2-3 year old used car, no worries over selling it.

Get something cheap and used. VERY used. You’re only keeping the car for a year and a half, so if I were you I’d find the cheapest thing I could that will run reliably. Save your money.

The older a car is, the slower it depreciates. Here is a picture of a typical depreciation curve. The slope of the line represents the rate of depreciation. Notice that as the car ages, the slope decreases.

Used, or rent or lease. Don’t buy new.

If you lease, read the lease carefully. My eldest son some years ago leased a car, and he had trouble keeping the miles down to the allowed, and overuse was going to cost him fortune. So, be sure the allowed mileage and/or cost of excess use is right for you.

Also, read any maintenance requirements, and of course the length of the lease has to match your known time, you said around 18 months?

One option might be to look at websites such as swapalease.com where people are trying to get out of their current leases and still have some time left on it.

To reduce the hit you take, buy a car about 4 to 5 years old and the previous owner takes the hit. Just plan for some repair and maintenance costs in the 18 months you own the car; tires, brakes, etc.

Have you considered a 24 month lease? It might work out OK if you drive 12K miles per year or less.

You’re not saying how much you want to spend, but if $10K is in the range, consider a Kia Rio, if a small car will do. Due to incentives and rebates, combined with the expectation of keeping the car, it is hard to find an equivalent car with a decent warranty at that price used.

Otherwise, the advice to consider 3 to 5 yr old used is good. However, always do a quick analysis compared to new, because at times, new can come out ahead, especially if you keep cars a long time. My youngest car at this time is now nearly seven years old, so my habit of not purchasing cars frequently allow me to ignore short term depreciation issues.

Have seen some relatives’ experiences with leases that are not good. First is the issue of too many miles.

At end of lease turn-in, one relative got hit hard on picky inspection issues as well as some other mechanical ones that could have been fixed cheaper by an independent.

I tend to believe outright ownership is best and leases are not for anyone not involved in business use of their vehicle.

The older a car is, the slower it depreciates. Here is a picture of a typical depreciation curve. The slope of the line represents the rate of depreciation. Notice that as the car ages, the slope decreases.

I’d substitute “person” for “car” in my case; and note that the slope increases not decreases over time.

the site i mentioned shows how many miles you can drive per year/how many miles left on the agreement. Maybe there will be picky dealerships that will charge for a tiny nick you got when someone misjudged how far away their car was with their shopping cart, but I don’t think they’ll be too picky if he’s just returning the lease and not buying another vehicle