New car or used car? Forum

[astro1819]

OK, here is the dilemma. I have approx. 20k in savings after working 3 years between undergrad and law school. I need to buy a car (currently carless). I can either:

a) Buy a new car cash (looking at the 2011 Ford Fiesta for about $16k) and increase Gradplus loans by 16k.

The new car will carry higher insurance and tax (likely attending school in Virginia, which has a property tax) but lower maintenance and gas costs. Resale value will be higher. I'll get the exact car I want. No previous owners, more dependable.

or

b) Buy a used car cash (looking at honda 3-5 year old honda civic) and increase Gradplus loans by only 7-10k.

The used car will carry lower insurance and tax, but higher/unpredictable maintenance and gas costs. More $$$ available after law school to replace the car when I graduate.

[Z3RO]

drive a used car. your gas and maintenance difference won't be 6-9k difference. Especially honda vs ford.

[acash09]

Buying a new car is a horrible investment. The depreciation in value in the first year is horrifying. Find a good used car and ALWAYS use carfax!
Just my .02

[tadams86]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

[oberlin08]

you could lease a car, pay lower monthly payments, give it up after law school, and readjust your transit situation acccording to your job situation

[Z3RO]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

Did you buy it from a reputable dealer, or some high school kid on Craigslist?

you could lease a car, pay lower monthly payments, give it up after law school, and readjust your transit situation acccording to your job situation

Leases are much harder to come by nowadays. You have to have very good credit and *ahem* income.

[astro1819]

drive a used car. your gas and maintenance difference won't be 6-9k difference. Especially honda vs ford.

In the short-term 3 years of law school, yes. But in the long-term? I would hope to keep the new car well past graduation. My impression is that Ford is turning its cars around (Fiesta is #1 small car in europe).

I'm not convinced one way or the other, just trying to weigh both sides.

[de5igual]

if i were in your shoes, i'd probably just pay 4-5K for a decent, older model honda civic. after 3 years of law school, turn around and sell it for 3-4K.

[astro1819]

Buying a new car is a horrible investment. The depreciation in value in the first year is horrifying. Find a good used car and ALWAYS use carfax!
Just my .02

Yes, you are correct for high mark-up cars. But in the subcompact/entry-level class, I don't see much evidence of rapid depreciation. By looking at used car prices, it seems like these cars depreciate approx $1k/yr. Some might argue that the higher cost is worth the extra $$$ since it will last longer and is not pre-owned.

[oberlin08]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

Did you buy it from a reputable dealer, or some high school kid on Craigslist?

you could lease a car, pay lower monthly payments, give it up after law school, and readjust your transit situation acccording to your job situation

Leases are much harder to come by nowadays. You have to have very good credit and *ahem* income.

Youre assuming OP doesnt currently have a job, or good credit, he could have both - lease a car - quit his job to go to law school, and use his stocked up cash to pay the monthly payments.

but you're right though, leases are hard to come by, but at least check out Honda's deal until the end of this month (I am)

[astro1819]

if i were in your shoes, i'd probably just pay 4-5K for a decent, older model honda civic. after 3 years of law school, turn around and sell it for 3-4K.

Hmmm, definitely an option. But I'm worried that if it croaks on me, I'm SOL with only student loan $$$ available to buy a new car or pay lots of money to repair the dying car.

[astro1819]

Youre assuming OP doesnt currently have a job, or good credit, he could have both - lease a car - quit his job to go to law school, and use his stocked up cash to pay the monthly payments.

but you're right though, leases are hard to come by, but at least check out Honda's deal until the end of this month (I am)

I currently have a job, but personally think leasing a car is money down the drain. By buying a car, at least I'll have an asset at the end of the 3 years (and if it's worth nothing to anyone else, it will at least be a mode of transportation for me while I pay back 150k+ in loans).

[Z3RO]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

Did you buy it from a reputable dealer, or some high school kid on Craigslist?

you could lease a car, pay lower monthly payments, give it up after law school, and readjust your transit situation acccording to your job situation

Leases are much harder to come by nowadays. You have to have very good credit and *ahem* income.

Youre assuming OP doesnt currently have a job, or good credit, he could have both - lease a car - quit his job to go to law school, and use his stocked up cash to pay the monthly payments.

but you're right though, leases are hard to come by, but at least check out Honda's deal until the end of this month (I am)

That's a fair point, and his post seems to agree with you.

I'm inclined to agree that the lease is better if you really want a new car, because you're only paying on the depreciation of the car. That would be a sunk cost on a new car anyway. I'm not sure why you'd want to own an asset like a car if you could drive it just by paying off a little more than the depreciation. The extra money you spend to own the car rather than lease it is liquid if you lease the thing. If you own the car you have to sell it. Good thing you didn't try to get a good return on your investment by buying an SUV in 2005/6.

[tadams86]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

Did you buy it from a reputable dealer, or some high school kid on Craigslist?

Bought it from a dealer, dunno about reputable, but it was a "fast car".

As for OP, I think the lease option might be your best bet. Put 3-4k down on a lease and pay low monthly payments, might save you a bit of cash.

[astro1819]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

Did you buy it from a reputable dealer, or some high school kid on Craigslist?

Bought it from a dealer, dunno about reputable, but it was a "fast car".

As for OP, I think the lease option might be your best bet. Put 3-4k down on a lease and pay low monthly payments, might save you a bit of cash.

3-4k for a 36month lease??? Thats between $83 and $111 per month. Find me a lease that low and I'll consider it.

[oberlin08]

personally I enjoy driving a car that no one else has driven because I know how the car has been driven. I had a used car before my current one, and I had to end up replacing the clutch within 6 months (it was totally coming apart, and was shooting pieces through the bell housing, which I also had to replace). Granted a new car is expensive and a terrible investment, but then again so is any car.

Did you buy it from a reputable dealer, or some high school kid on Craigslist?

Bought it from a dealer, dunno about reputable, but it was a "fast car".

As for OP, I think the lease option might be your best bet. Put 3-4k down on a lease and pay low monthly payments, might save you a bit of cash.

3-4k for a 36month lease??? Thats between $83 and $111 per month. Find me a lease that low and I'll consider it.

maybe not THAT low, but there are some good deals out there: http://automobiles.honda.com/current-offers.aspx

scroll down to the civic with $1700ish down

[tadams86]

You can actually pay up front for a lease, so if OP is considering purchasing a small, relatively inexpensive car, why not find out how much a 36 month lease would actually cost him, and just pay up front? I dont know where OP is planning on attending school, but if he plans to work in a market afterwards where he may not need a car, this might be the best plan of attack.

[PoliticalJunkie]

Go German. American cars are made on the cheap and still don't last. My 02 Audi has given me no troubles since I got it 5 yrs ago and neither has my dad's 07 A8L.

Get yourself a quality German car - they are made very well, last, and will fit in your budget.

[baboon309]

You can actually pay up front for a lease, so if OP is considering purchasing a small, relatively inexpensive car, why not find out how much a 36 month lease would actually cost him, and just pay up front? I dont know where OP is planning on attending school, but if he plans to work in a market afterwards where he may not need a car, this might be the best plan of attack.

What about the insurance? Aren't you gonna pay more for lease car

[waxloaf]

used honda owns new ford, I bet the ford will die first.

[astro1819]

used honda owns new ford, I bet the ford will die first.

OK, what about new Honda Fit or civic?

[oberlin08]

used honda owns new ford, I bet the ford will die first.

OK, what about new Honda Fit or civic?

Honda Civics have excelllent reputations, and they are often the most popular car in america. Especially among people aged 20-29...

I like the fit though, cheaper good on gas without compromising cargo space

[tadams86]

What about the insurance? Aren't you gonna pay more for lease car

Actually, any car you purchase with aid of a loan has to have the same insurance coverage, I doubt there is much difference between full coverage of your own car, and full coverage of the dealers/banks car. Then again I dont sell insurance.

[shepdawg]

You can always take over somone else's lease who cannot afford to pay the payments anymore. My family is doing the opposite of you as I go into law school. We are selling both vehicles, 09 Accord and 08 Tundra CrewCab, and using bikes to get to school and work to save money.

[waxloaf]

used honda owns new ford, I bet the ford will die first.

OK, what about new Honda Fit or civic?

I like civics, I have owned two, but I'm a big fan of all hondas

My first civic last until 175,000 and then I sold it in perfect working condition, my one now is 12 years old and has 115,000 and runs like a dream