What’s the cheapest way for me to get a new car, and keep it for only nine months or a year? For the purposes of discussion used cars are out. I know it does not make financial sense, but please ignore that for now. Assume I have enough cash to pay cash for the car. To make it simple, let’s say the car costs 50 grand.
I can:
[ol]
[li]Buy the car with cash and sell it in a year[/li][li]Finance the car and sell it in a year[/li][li]Lease the car and break the lease after a year[/li][/ol]
Which of these would make me lose the least possible money?
Is there anything else? I don’t think there is such a thing as a one year car lease, is there? I left out trade ins becuase I think a trade in will always bring less money than a private sale, but is that true even with a barely used car?
The only real difference between 1 and 2 is the interest you pay through the one year minus the interest you would get if you invested the cash. Many new cars come with REALLY low interest rates (like 0.9% or 0%). You would do better to finance the vehicle, invest the cash and sell the car in a year than you would buying the vehicle outright. You are going to lose some money in depreciation either way, but you’d be able to recoup some of that loss by investing the cash in a higher yield investment vehicle (heh).
Leasing would be an option, although breaking the lease is going to cost you pretty big. From here: “Breaking a car lease usually means paying the difference between the leased vehicle’s current wholesale auction value and the amount still owed on the lease. This can be a substantial amount and usually surprises leasing consumers who attempt to get out of a car lease early.” You could potentially transfer the lease to someone else if that is allowed in your contract.
No question that the cheapest way to do what the OP asks about is to find a naive person willing to take ownership, or financial responsibility for a lease, at a price well above the market.
I believe there are web sites devoted to finidng matches between people who want cars and people who want to lease a car and are willing to take over a lease.
The catch as usual is whether you can legally transfer, or if you are on the hook if your sub-leasor fails to make payments.
OTOH, 1 and 2 depends how urgent your schedule is and how much of a reduced return you are willing to take to sell outright. You can turn in a car any time; many places, to sell a car you also have to have it safetied, put out ads, show to multiple prospective buyers and wait for a decision. Like anything else in commerce, the faster you want to unload it, the less you’ll usually settle for.
They have weekly rates that are more reasonable than the daily ones and you get better rates if you rent from a location that isn’t at an airport. They may even have monthly or annual rates - I’m sure people who do sabbaticals and long vacations must have that kind of need.
I’m not sure exactly how the cost would line up, but you’d be avoiding the depreciation/resale losses you’d have with options 1 and 2 and you wouldn’t be breaking any contracts as you would with a lease.
I don’t have much insight on the main question–seems fairly complicated to me and involves much guesswork.
However, if you did a 12-month lease, you would at least know how much you were paying up front. And at the end of the 12 months you just hand them the car back and walk away (no hassle with trying to sell it). And you wouldn’t have any cash tied up in the car.
ETA: Erp, I assumed you could do a 12-month lease.
This is perhaps stating the obvious, but the best way to do this would be to not buy a new car at all. Just buy a one or two year old used car and then sell it when you’re done. If the 9 months happen to all be in one model year, there won’t be any depreciation at all, but even one years’ extra depreciation is nothing compared to the hit going from new to used.
ETA: oh, missed that used were out of the question, but certified used is just as easy and just as nice.