Topic: Buying used vs. leasing new - trying to minimze costs

[Hedonist]

Hi everyone!

I am seeking some advice in terms of buying used vs. leasing new. That being said, I am new to Canada and will probably work here for one or two years. Coming from Europe, my credit history is pretty much non existent and I don't have the cash right now to just buy the car (preferably an import) I want. My biggest concern is the resale value after those two years. However, buying a used 06/07/08 Honda Civic is not an option right now. A 05/06 Chevrolet Cobalt or Dodge Caliber would be in my price range, but the depreciation of the domestic cars concerns me. Financing a new vehicle on a short term lease (2-3 years) could also be an option. Though I have no prior experience in the whole "leasing thing".

Bottom line: I would like to minimize my costs for having a car for the next 2 years ... well who doesn't!? 

Maybe you guys can give me some input or direct me further as I am pretty torn right now on what to do and what not ... Thanks in advance for any advice!

[airbalancer]

I would look at one for a couple of grand, pay cash, no collision ( Man. insurance is cheaper then most places)
If you buy it cheap then you do not have worry about depreciation

[PMREdmonton]

Are you picky about cars?

Buy a 7-year old Corolla and drive it around and re-sell it two years later - probably cost you $2000 or less in the end.

Why a Corolla - they are cheap, reliable and sell quickly.  For a little bit more scratch you could buy a 7 year old Civic and do the same thing.

[toolatecrew]

If your concern is reslae value then buy the oldest cheapest car that fits your needs (in terms of size reliability etc). Once cars get to be older depreciation slows to a crawel. Remeber depreciation is a % of the purchase price so if you buy a 2K car and it depreciates 10% over 2 years big deal you are out $200. If you buy a 20 K car and it depreciates 5% you are out $1000!

Sounds like you want a "newer" car but to minimize cost of ownership. Don't look for cars that depreciate slowly (becuase they will cost more and its not the depreciation RATE you care about its the actual $ of depreciation). Also factor in maintenence warranty work. The above comment about insurance is also a good one. If you are a new to Canada driver Insurance is going to be very high. If you LEASE a car you need full covererage. That will be VERY expensive. Your insurance bill for full coverage could be much more than your cash outlay for the car itself.

Look for something used that has already suffered heavy depreciation. Look for something that is "disposable" so rather than paying big $ for insurance you pay less and if the car gets written off you just walk away.

Find the best (mechanically) cheap beater you can. Heck buy a series of beaters if you must. That will be by far the cheapest way to go.

[Thinking Out Loud]

Are you picky about cars?

Buy a 7-year old Corolla and drive it around and re-sell it two years later - probably cost you $2000 or less in the end.

Why a Corolla - they are cheap, reliable and sell quickly.  For a little bit more scratch you could buy a 7 year old Civic and do the same thing.

Hee hee - a Hedonist driving a Corolla....where's Arcticsteve?    

Financially though, you make the most sense.  Mazda 3 has a more 'sinful' drive, though!  

[mmorriso]

a few other good choices:

compact:
Mazda Protege
Hyundai Elantra
Toyota Matrix
Pontiac Vibe

midsize:
Ford fusion
Honda accord

as with any used car purchase solid maintenance history and full mechanical inspection are in order.

i wouldn't buy anything too fancy that you are counting on getting a good price for in 2 years since a lot can happen in that time (for example a minor accident may dramatically decrease the value of your asset)

happy shopping!

[kardood69]

Well, you can always get a good deal used....and I've gotten really good value out of used cars in the $8K-10K range, but there's always the unknown... 

If there's a reasonable lease that you can afford at least you know you'll have a fixed cost item.   Warranty and very likely worry free for the 2 years...    regardless of make.   

Just try negotiate the best lease deal as possible like you would when buying.

[vdk]

24 month leases are really expensive.

[Trainman]

24 month leases are really expensive.

Exactly!  Very expensive.

So do as the rest have suggested, the cheapest, oldest car you can live with.  It will be your best bet for 2 years as far as minimizing costs go.

And welcome (even if temporally) to Canada!

[toolatecrew]

Well, you can always get a good deal used....and I've gotten really good value out of used cars in the $8K-10K range, but there's always the unknown... 

If there's a reasonable lease that you can afford at least you know you'll have a fixed cost item.   Warranty and very likely worry free for the 2 years...    regardless of make.   

Just try negotiate the best lease deal as possible like you would when buying.

As I said this ignores the fact that this person has never inssured a car in Canada. They will be considered a new driver and the insurance cost for a new driver for full coverage on a leased car will be huge.

[HeliDriver]

Subaru is currently offering a 2-year lease rate of only 1.9% on the Imprezza. If you really want a new car to drive for two years and then be done with it, that's a great deal and probably the cheapest and most convenient way to do it.

Of course, like others have said, insurance and credit issues for someone with no Canadian history might be a deal-killer.

[Hedonist]

Hey guys!

Thanks for the good advice. I went with a 2003 Honda Civic SI. Got a good deal (private) and the car is in great shape. The cost for insuring the car on the other hand ... holy smokes ... I would call that a crime! It's about 4x the amount I would pay in Germany.

Anyways, thanks again! 

[mmorriso]

well i was about to post that you could buy a Buick if you wanted lower insurance, however, the Si will be way more fun!

happpy motoring!

[blur911]

The cost for insuring the car on the other hand ... holy smokes ... I would call that a crime! It's about 4x the amount I would pay in Germany.

A lot of that is because of the car, you picked the demonized street racer special, a Civic Si.
A four door granddad's car would have been cheaper,  but probably not much fun.

[HeliDriver]

The cost for insuring the car on the other hand ... holy smokes ... I would call that a crime! It's about 4x the amount I would pay in Germany.

A lot of that is because of the car, you picked the demonized street racer special, a Civic Si.
A four door granddad's car would have been cheaper,  but probably not much fun.

I haven't really kept up with the later Civic models, but I believe a 2003 Civic Si is just a regular Civic with a sunroof/trim package. In Canada, the "street racer specials" were the SiR models.

[ricki65]

Found this article that maybe some help to you at prlog.org/10464579-lease-versus-finance-new-vehicle.html

[Careener]

Hey guys!

Thanks for the good advice. I went with a 2003 Honda Civic SI. Got a good deal (private) and the car is in great shape. The cost for insuring the car on the other hand ... holy smokes ... I would call that a crime! It's about 4x the amount I would pay in Germany.

Anyways, thanks again! 

For fun try filling out an insurance quote online for Ontario instead of Manitoba...

Enjoy your new car.

[overtakeyouintheleftlane]

You can also consider cars which are not in production anymore and that depreciated very quickly such as a Pontiac Sunfire/Chevrolet Cavalier from around 2003-2005 model years. Good engine, transmission and excellent A/C and heating. Very basic car though as in rental car grade. If you get one of these, just keep it basic such as A/C, automatic or manual, no power windows, locks and other electronics. Cheap to fix with plenty of parts available. These are good examples of disposable cars as well.