Help me with a car question

[Anonymous]

I am soon to be separated from my husband. We will be selling our one car and each buying our own vehicles. It's not an option to keep the current car - it has high payments and neither of us want to keep paying on it for the next three years. I have about $5,000 that I could put towards a car. I was originally planning on looking for the most reliable car that I could just pay cash for, but have been seeing some lease deals that are incredibly affordable (Honda Civic for $2,000 down, $159/month). On one hand, I could avoid having a car payment, but even with a somewhat reliable used car, I'd probably still be putting about $100/month aside for unexpected repairs and maintenance. On the other hand, I could have a car pretty much guaranteed to give me zero problems for three years, and could use the extra $3,000 to put in savings. I have two young children, so having a reliable car is pretty important. The mileage restrictions on a lease are not a problem - we've averaged 10,000 miles/year on our current car due to short commutes and working half-time from home.

I have a fairly decent amount of savings (could scrap by for three months), and only debt is $120/month of school loan at less than 2% interest that I am not aggressively paying down.

[Anonymous]

It might not be a bad idea to lease for a few years until you are more settled financially, assuming you are sure you will be able to make the payments.

[Anonymous]

If you're going to lease make sure to do a lot of reading so you know exactly what you're paying. Leasing is complicated as it's not based on an APR but rather points over value that need to be converted to an APR. Do not take a "monthly payments" approach to getting a car, focus on total cost and work out the monthly payments from there.

[Anonymous]

There are also great financing deals right now. I think you'd be better off buying a new car with what you can put down, and financing the balance. THat gets you the reliable car, warranty, and you don't have to give it back.

[Anonymous]

Leases are bad deals. If you can, buy a used car for cash.

[Anonymous]

If you want the best bang for your buck, you should look at used cars that are about 12-18 months old with less than 12K miles on them. In general, the value of the car drops the most in the first year, so you will get the best price (waiting for after that first year) and still maximize reliability (under 12K miles). Also, make sure to get the car from a reputable dealer or do some homework (if you are buying independently at a minimum run a carfax report). Carmax is a good source for 12-18 month old cars that have been processed in their shop to ensure that you have decent reliability. They also run carfax reports so that you know that the car has not been in any accidents, etc.

[Anonymous]

I wouldn't lease. At the end of the term, you have no car at all and you have no idea what the lease terms/car prices/interest rates/etc will be at that time. I would either buy a certified used car or something with a good warranty - like a Hyundai.

If you are buying new, make sure to get quotes from multiple dealerships, if not on the same car, on comparable cars, because they will negotiate if they think you are going somewhere else.

[Anonymous]

I wouldn't lease, would purchase something like the Civic you mentioned, maybe a 2012 with low mileage. Or a similar brand like Hyundai if the Hondas are more $$ than you want to pay. Get multiple quotes. Check out Carmax for used models and no haggling. I bought a small 2012 SUV from Carmax ,maybe 10K miles, for about $12000. Warranty for 75K or 100K miles, don't recall which. Very low mileage. The new models are nearly $20K so $12K was a great deal for me

[Anonymous]

You can't buy many cars with low miles for under 10,000, much less a Civic.