Still Nuts to Buy New Car for 10 Months?

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William Million
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Still Nuts to Buy New Car for 10 Months?

Post by William Million »

I'll be in an area for 10 months related to work and will need a car. It'll be a stressful time work-wise and I don't want to deal with mechanics, if possible. I know it sounds nuts but as best I can tell, it might not be a bad idea idea to buy a new Toyota Corolla or Nissan Sentra. If I get a low price and significant rebate, the depreciation seems to maybe $2,000 when I sell the 1-year old car with about $10,000 miles. That seems a pretty good deal for a new, problem-free car that will not need new parts.

I know convention wisdom was to buy a 2-3 year old car, but that doesn't seem to work as well as it did in the past. Depreciation is no longer as steep for the more reliable cars.

Does anyone think that's a bad idea? (I won't be able to keep the car - going abroad after that.)
sambb
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Re: Still Nuts to Buy New Car for 10 Months?

Post by sambb »

at least buy something 1 year old or so. New is not fiscally prudent. But sometimes easier.
inbox788
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Re: Still Nuts to Buy New Car for 10 Months?

Post by inbox788 »

What state? Sales tax or property could make it not worthwhile. Sometimes leasing is less costly for this reason.

Alternatively, look to take over a short remaining lease at leasetrader.com or swapalease.com
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William Million
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Re: Still Nuts to Buy New Car for 10 Months?

Post by William Million »

Good idea to look at the end of someone else's lease, thanks.

As far as buying 1-year old, I'm seeing new Corollas under $15,000. Very hard to get a late-model, low mileage Corolla at much lower.
HIinvestor
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Re: Still Nuts to Buy New Car for 10 Months?

Post by HIinvestor »

The rental car companies often offer newer cars for purchase that are quite reasonable and trouble free. Have had several relatives acquire their vehicles in this manner. Hertz has a pretty good no-haggle program and you can buy (or decline) the extended warranty as well.
Jack FFR1846
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Re: Still Nuts to Buy New Car for 10 Months?

Post by Jack FFR1846 »

Your idea is not at all bad, depending on how well you negotiate your new car purchase, how "stripped" you can get it and of course, what the used market really is like.

Look at used car prices very carefully. I have found that there are some that are more expensive than new at 1 or 2 years old. A stripped Corolla might fall into this. When someone is looking for a used car, they tend to do price shopping and if your car sold for $2000 less than average, you can price it lower and still lose very little.

As for getting a slightly used car with a warantee........if the car breaks down, it's a hassle, period. I've owned a couple Audis. Great dealer. Great loaner cars. The car was in for service every 3 weeks and it was certainly more of a hassle than if I just stuck with a Honda that sees the dealership twice ever....when I buy it and again when I trade it in.
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sunnyday
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Re: Still Nuts to Buy New Car for 10 Months?

Post by sunnyday »

It doesn't seem like a bad idea, but it may cost closer to $3,000 or more once you factor in sales tax, other dealer fees and financing/opportunity cost.

Also, you may have trouble selling a used corolla for only $2k under what someone can get a brand new one for with a full warranty and 0 miles. Selling a used car is a pain, so I would factor in more of a depreciation hit.

A certified pre-owned would save you a portion of that but it probably isn't worth it to you.
sport
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Re: Still Nuts to Buy New Car for 10 Months?

Post by sport »

Perhaps you can negotiate a 10 month lease. That would simplify everything.
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Watty
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Re: Still Nuts to Buy New Car for 10 Months?

Post by Watty »

Another problem is timing the selling of the car when you are ready to leave. Most likely you will be busy wrapping up your work so you may not be able to spend a lot of time selling it to get a good price, and then you may need to get a rental car for the last week or two.

Depending on your situation it might be easier to deduct the cost of long term rental or lease as a business expense than the purchase of a car.
inbox788
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Re: Still Nuts to Buy New Car for 10 Months?

Post by inbox788 »

William Million wrote:Good idea to look at the end of someone else's lease, thanks.

As far as buying 1-year old, I'm seeing new Corollas under $15,000. Very hard to get a late-model, low mileage Corolla at much lower.
That's a good price. Are you sure they're real, and not stripped down manual transmissions with the military college graduate loyalty discount? If they're really that low, I know someone who might be in the market. She was looking at used car, or postponing purchase, but that might be a deal too good to pass up.
killjoy2012
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Re: Still Nuts to Buy New Car for 10 Months?

Post by killjoy2012 »

You might want to check out what it would cost to rent from some place like Enterprise for the 10 months vs. buying/selling. As other have pointed out, you need to factor in taxes, selling costs, selling headaches and lead time, etc. It's been a few years, but I think I rented a car for a month for ~$250-300/month. Alternatively, I would also look at swapalease.com... just be aware of any lease disposition fees and make sure you thoroughly inspect the vehicle before completing the deal (damage, etc.).
inbox788
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Re: Still Nuts to Buy New Car for 10 Months?

Post by inbox788 »

Here's another thought. Usually leases are 36 months (and I've seen some some 39 and 42). On the short end, I've seen some 24 month leases (I saw a newspaper ad for Civic LX, $2500 down, $59/ month for 24 months.) that weren't too much more than 36 month, average out to total per month costs. That might be comparable to 1 year leases or rental costs. Even if you're on the hook for a little more, you may get some back by leasing out or selling the car at the end of 10 months.
PowDay
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Re: Still Nuts to Buy New Car for 10 Months?

Post by PowDay »

Research Mini- Leases with the car rental companies. If you return and re-rent every 15 days you can even use your credit card insurance.

Once you factor in sales tax / property tax / registration / depreciation / maintenance, $500-600 a month to Hertz/Enterprise may be the best way to go. Even if its more expensive, its less risky, and less of a hassle.
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thirdman
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Re: Still Nuts to Buy New Car for 10 Months?

Post by thirdman »

I have rented long term from Enterprise, Avis and Hertz, for up to one year. They have long term rental departments. I carry a rider on my auto insurance policy for rentals. You get a new car, no problems or hassles. I even had a flat one time when i went to get my car in the office parking lot. Hertz sent two guys with a fresh car. They transferred all of my stuff out of the car with the flat, and i was on my way.

Another time i had a problem with an Enterprise car. I called them up and they told me to drive to a regional lot. When there they told me to pick any car i wanted.

When i rented, i was given a business card of the regional manager for long term rentals.

Good luck.
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William Million
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Re: Still Nuts to Buy New Car for 10 Months?

Post by William Million »

Thanks to everyone for replying.

Problem with long-term renting is I'm not finding anything under $650/month. For 10 months, I'm looking at about $8,000. For that reason, I thought buying a new car for $15,000, then reselling for $11,000-12,000 might be best. However, the hassle of selling is unpleasant.

I agree that picking up the last year of a lease has many advantages, if possible.
johnubc
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Re: Still Nuts to Buy New Car for 10 Months?

Post by johnubc »

You can look to re-lease a car - i.e., there are people that have a leased car that want to get out of it and you pick up the remainder of the lease. One web site like leasetrader dot com advertises these cars. Of course, you need to go through the leasing company to change the liability, but they are ok with that. You could also use CarMax as your rental company - buy a good used car the day you arrive and sell it back the day you are leaving - but you take on the risk of the difference in the buy-sell price.
dphilipps
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Re: Still Nuts to Buy New Car for 10 Months?

Post by dphilipps »

Is there a CarMax in your area? Not sure if this is still the case today, but as of a few years ago, CarMax would buy used cars for at least dealer blue book (and sometimes quite a bit more if the car is in great shape -- which should be the case for 10month/10K miles), with minimum hassle. You might even call them ahead of time and get a quote for a hypothetical trade-in.
Chadnudj
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Re: Still Nuts to Buy New Car for 10 Months?

Post by Chadnudj »

Have you considered Carmax? They guarantee their cars for 1 year, and do a thorough pre-sale inspection to make sure everything's great. I bought a used car from CarMax, and never had any problems -- I'm still driving the 1999 Ford Explorer I bought in 2003 today.

I'd go used, and I'd go to Carmax.
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thirdman
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Re: Still Nuts to Buy New Car for 10 Months?

Post by thirdman »

You could look into shipping your car, if you have one.

I used to write off the cost of car rental as a business expense.
cmr86
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Re: Still Nuts to Buy New Car for 10 Months?

Post by cmr86 »

William Million wrote:That seems a pretty good deal for a new, problem-free car that will not need new parts.
Not necessarily true. My 2013 Ford Focus is in the shop getting a new clutch - under warranty, thankfully.
tgotch
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Re: Still Nuts to Buy New Car for 10 Months?

Post by tgotch »

Don't know anything about either of these, but have you looked into:

Swapalease.com
leasetrader.com
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