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Moving to the US for 1-2 years - cars: buy used, or lease new

Moving to the US for 1-2 years - cars: buy used, or lease new

Old Jun 16th 2013, 1:51 am
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Default Moving to the US for 1-2 years - cars: buy used, or lease new

I'm about to move to the US (arriving in early July) and I'll need to have a car while I'm there. I'm OK to rent for the first week or two, but I figure that's not a long term option so I'm looking at either buying a used car (recent model/year to avoid the massive initial depreciation when buying new) or leasing (which seems to restrict me to leasing a new car, since the ex pat leasing companies (International Autosource, etc) only seem to offer leases on new cars).

I've read through the wikis/stickies and now I'm trying to weigh up the pros/cons of both:

Leasing pros:
  • Helps build credit history
  • New car, get to pick options, add ons
  • Easy to hand back and the end of the lease term
  • Relatively small up front payment

Leasing cons:
  • Most leases seem to be a 2 year minimum... if I do only stay for 1 year it will likely end in hefty early termination charges
  • Annual mileage limit (12,000 miles) - I haven't had a car before so find it difficult to quantify the number of miles I would use each year
  • Don't have any equity at the end of the lease

Buying used pros:
  • No need to enter into any fixed term contract
  • No penalties/restrictions on mileage/length of ownership
  • Chance to test drive models before buying/leasing

Buying used cons:
  • Chunky up front payment (which would involve doing a FX from local currency to USD)
  • Increased maintenance costs
  • Less flexibility in choosing make/model/year
  • Potentially difficult to sell after 1-2 years

I'm looking for a mid range "luxury" sedan (something like a BMW 3 series, Audi A4, or a US/Asian equivalent)... but I really don't know which option (or car) to go for.

Any advice?
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Old Jun 16th 2013, 3:41 am
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

The only real pro to a lease is the ease of dumping the car at the end of the term.

Mileage, depends where you'll end up and if you want to actually go anywhere. You'll probably blow through 10-15K miles just going to work and doing the grocery shop kind of stuff and then the overages tend to be pretty pricey.

You still have those maintenance costs in a lease that you do on a buy as well. With the added hassle of returning the car in mint shape, which depending on where you live might be pretty tricky as cars are always getting scuffed in the cities around my neck of the woods at least.

Selling a car isn't really a problem either, if there's a Carmax nearby, just sell it to them.
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Old Jun 16th 2013, 3:42 am
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

I would buy used, the cons for leasing are too high.
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Old Jun 16th 2013, 5:59 am
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Only advice I can give is to not go American. The inefficiency of the engine and the extra fuel costs will offset any reduction in the upfront cost of buying.
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Old Jun 16th 2013, 12:52 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

My addition to this debate is that you may be surprised how expensive a nearly new (say, two year old) used car is, when compared to the new car price. This appears to be the downside of new car prices being relatively low.

Oh, and try not to buy a vehicle near the end of its model life cycle, because the value will take a significant hit when it becomes the "previous model".
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Old Jun 16th 2013, 1:24 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

If you have $25,000 to spend why not just go to CarMax and buy something for cash.
Or is that you want to buy on credit up to $25,000?
How can you move for only a year or two?
Are you sure you'll need a car daily? If you are somewhere like the middle of San Francisco, you could just rent for for the odd weekend as needed.
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Old Jun 16th 2013, 2:25 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Originally Posted by Mummy in the foothills View Post
If you have $25,000 to spend why not just go to CarMax and buy something for cash.
Or is that you want to buy on credit up to $25,000?
How can you move for only a year or two?
Are you sure you'll need a car daily? If you are somewhere like the middle of San Francisco, you could just rent for for the odd weekend as needed.
I could buy in cash if I move the money over to the US using XE or something similar (I'd be moving it out of a savings account, but the interest is ~2% so doesn't really make sense to buy on credit).

I'm doing an internal transfer with my company and the duration isn't fixed... it'll be at least one year, but possibly less than two (although it could end up being up to five).

I think I will definitely need a car daily... I'll be living in a relatively small city and will have a ~6 mile (e/w) commute to work every day.
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Old Jun 16th 2013, 2:31 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

A bike?
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Old Jun 16th 2013, 2:33 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Originally Posted by Boiler View Post
A bike?
I'll definitely be getting a bike, but I might need something a bit more automobile like for the winter (and for the weekends/going to the grocery store, etc). Although I'd really prefer not to have a car (and all the other added expenses), I don't think it'll be practical not to have one.
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Old Jun 16th 2013, 2:36 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Here is a list of midsize sedans

http://www.cars.com/guides/sedan/midsize/
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Old Jun 16th 2013, 2:38 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Originally Posted by bah View Post
I'll definitely be getting a bike, but I might need something a bit more automobile like for the winter (and for the weekends/going to the grocery store, etc). Although I'd really prefer not to have a car (and all the other added expenses), I don't think it'll be practical not to have one.
For a 6 mile commute (I go that far to get a bottle of milk ) I'd buy something cheaper for cash.
http://www.carmax.com/ they buy cars too so when you are ready to move back it's easy to sell it back to them.
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Old Jun 17th 2013, 3:16 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Originally Posted by Mummy in the foothills View Post
For a 6 mile commute (I go that far to get a bottle of milk ) I'd buy something cheaper for cash.
http://www.carmax.com/ they buy cars too so when you are ready to move back it's easy to sell it back to them.
Thanks - I think I'll probably go with buying used for cash.

Any recommendations on insurance?
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Old Jun 17th 2013, 6:48 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Originally Posted by bah View Post
Thanks - I think I'll probably go with buying used for cash.

Any recommendations on insurance?
Call around, we have had Allstate, and AAA in the last 15 years. I liked both.
You get a discount is you have house contents and life with the same company.
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Old Jun 17th 2013, 7:18 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

Originally Posted by bah View Post
I could buy in cash if I move the money over to the US using XE or something similar (I'd be moving it out of a savings account, but the interest is ~2% so doesn't really make sense to buy on credit).

I'm doing an internal transfer with my company and the duration isn't fixed... it'll be at least one year, but possibly less than two (although it could end up being up to five).

I think I will definitely need a car daily... I'll be living in a relatively small city and will have a ~6 mile (e/w) commute to work every day.
We bought our first car here for 'cash' and paid for it in full on our UK credit card, just called and told the credit card company in advance so it wasn't rejected.
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Old Jun 17th 2013, 7:49 pm
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Default Re: Moving to the US for 1-2 years - cars: buy used, or lease new

If you're moving to the Boston area I happen to work for one of the largest dealers in the US. I'd be happy to help you weigh up your options. Feel free to PM me.
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