I just signed up. I am comparing buying used 2010 vs leasing new 2017. I can buy a 2010 Prius Technology package with 168,000 km for CAN $8,600 (US $7,000). It drives great and was maintained by Toyota meticulously with one original owner who traded it in for a new Prius. I love the leather seats, sunroof and technology features like collision avoidance and dynamic cruise control (unreal to be found in a 2010 ?!). I can pay cash for it. The warranties have all expired. At another dealership I was offered a demo 2017 Prius V base model for all-in lease payment of CAN $170 biweekly which is insanely cheap. I drove it and the smoothness of the suspension and ride blew me away. But the acceleration and braking pretty well matched that of the 2010 car above. I was surprised to see it consuming 10 l/100 km going up hills. I could return it in 4 years scotch free, they told me, and then upgrade. While in theory I love the large cargo space, in practice I don't expect I will often need that high back and would prefer this not to impact the fuel economy. I do mainly highway driving. The biggest decider might be that I want to buy a house soon, and don't want the bank to see the $360/mo as a limit to my mortgage. Any words of wisdom, cautions or experiences would be very appreciated. Thanks so much, Matt
If you're buying a home soon, do neither. A lease would be most detrimental as it reduces your debt to income ratio which is used to determine how much house you can afford. You won't be denied for as loan but it could decrease your loan amount significantly. $360/month may decrease your loan maximum by $100,000 depending on interest rate. $8600 goes a long way towards the down payment for a home. Spending it all now will again decrease your buying power. That amount could be $100,000 as well depending on what percentage down payment you are planning. The beauty of it is once you do have the home loan, you can do whatever you want with your credit. If you must purchase something because you don't have a working vehicle then the lesser of two evils is the used 2010.
@mmmodem advice pretty much sums it up. One thing: don't think hiding a possible $360 monthly obligation from the bankers makes it go away. I would try to think like them, a bit. And a house can incur a lot of unanticipated expenses. Me too, I like the 2010 marginally better than the v, but: The kilometers on the 2010 are getting up a bit. There are a few items on the car that unfortunately have "half-lifes", food for thought if you're saddled with a big mortgage: 1. Hybrid battery. Replacement through dealership you're at least looking at 4 grand, best case scenario. 2. Oil consumption. FWIW, our 2010 Touring with 72K km's has zero oil consumption, but there have been a fair number reporting moderate and increasing consumption. Maybe depends on the kind of driving, and infrequent level checks? 3. EGR system clogging. This is more of a PITA than a financial menace, IF you're prepared to DIY clean it. There's a video here on the subject, lots of how-to info. 4. Intake Manifold oil fouling, by the PCV system. Similar to above, and can be remedied by cleaning and Oil Catch Can Install. Number 1 is the most significant big ticket item, and so far the batteries have been pretty bullet-proof I think. There's a few other big ticket items: the inverter can go, and the brake master cylinder also has an unbelievable high replacement cost, there's been a few failures I think. It might never have had a transaxle fluid change, something worth addressing ASAP.
The cash is good for a car that's paid off but a new car will be pretty worry-free as you focus on your house for the first year or so. If you're not maxing out your mortgage (hopefully not), then the monthly payment shouldn't be too big of a deal but I would definitely run it by a financial advisor first. The ideal case is if you're not maxing out your mortgage and you actually do have the funds to comfortably pay for the vehicle (and you have sufficient savings), then I would wait until the mortgage is settled before leasing the new car. If you go with the 2010 route, like any used car, just set aside some cash (at least $5k) for any unexpected repairs. I have a 2010 Tech pack with 141,000km and it's running fine but I do have $4k in my back pocket in case of a battery failure. (Not expecting one any time soon since our 2005 Prius lasted 11.5 years and 245,000km before the battery gave out). If the rest of the car is in good condition (the leather, the electronics, the suspension/brake/steering), then I'd go with a 2010 and save some money for repairs. The way I see it is, if the battery goes and you go with a new replacement, then you're getting a "new" car for an additional $4,000. (Again, assume the interior is in top condition. e.g. I can still see the leather grain on my steering wheel. It's not slick shiny like other cars with leather-wrapped steering wheels)
