Thinking of waiting for the 2008 Prius -- lease or buy another car in the meantime?

[kyto]

I'm moving from San Francisco to Palo Alto this fall and will be needing a car to get around. This will be my first car purchase ever. I had originally planned on buying (outright with my savings) a 2006 Prius in September, but after reading all the articles and posts about the much-anticipated 100+ MPG 2008 or 2009 model, I am now strongly consider waiting until then to buy a Prius.

I know there's always going to be a new and improved model right around the corner whenever you make a car purchase, but I feel that this level of innovation is enough to actually make the wait worthwhile.

As far as I see it, my options are as follows:

(1) Buy a used car and re-sell it in 1-2 years. I'd probably opt for a non-hybrid that I think is unlikely to lose a lot of value over the course of the two years. I am guessing that the resale value of hybrids will drop more (in % terms) than a non-hybrid car with the launch of a 100+ MPG Prius.

(2) Lease a Prius or another car for 2 years. However, considering that I have enough cash in savings to buy a car (used or new) outright, this seems like a financially unsound move.

(3) Suck it up and buy a new Prius now. Who knows-- the 100+ MPG may not even materialize for another 3-4 years...

Would love to get others perspectives and opinions on which option is best. As I mentioned, I've never purchased a car before-- I have lived in a city and not needed one for the past seven years. Would really appreciate hearing the thoughts of all of you with a bit more car-buying experience and saavy.

Thanks!

P.S. I posted this on another message board (not sure if there if it'd be a faux pas to reference it by name) -- so my apologies to all those reading this twice. I've been a follower of both Priuschat and the other board and wanted to get opinions of the members of both.

[Toyota1]

Hi Kyto, you should buy now!!!

[Tideland Prius]

Lease a Prius then. Learn how to drive the Prius efficiently and you can be the first person to prove that the new Prius gets 60 or 70mpg US (100+ is in imperial gallons).

If not, I'll suggest getting the most basic car you're willing to live with (may that be a Yaris/Echo/Tercel or Corolla or Camry etc); used that is and sell it when the new one comes out.

[cwerdna]

The rumored 100+ mpg hybrid is based on Imperial gallons, which is means 94 mpg. But, we have no idea what kind of driving cycle they're quoting. http://priuschat.com/index.php?s=&showtopi...ndpost&p=237709 says "Don't forget, the current Prius gets 75mpg US according to the Japanese 10-15 cycle so 94 mpg isn't far fetched. That probably just means that more of us can reach 60mpg."

The EPA rating for the current Prius is 60/51 and Consumer Reports got 44 mpg... It seems that people are typically getting ~42 to low to mid 50s on here in real driving (not hypermiling).

So, you should weigh whether you think waiting till say 2007 or 2008 is worth it given that the $3150 tax credit will be most likely gone by then unless Congress passes something to extend it. Is spending $3150 more later worth the gas savings and whatever new features/tech that the next gen Prius has?

Also, since you're in the Bay Area, do you care about the HOV stickers? We'll be hitting the 75K cap on those stickers real soon but they expire on 1/2008 unless the the expiration is extended by some bill/law.

[tumbleweed]

Go ahead and buy a Prius, they hold their value rather well and if you decide you can't live without a 2008 or 2009 model sell yours and buy one. I may do that myself.

Be very careful of leases, a lot of people get ripped off buying new cars (and used ones); but even more people get ripped off with leases. My personal rule has always been "never lease a car" and after talking to some who have I think it's a good rule.

[EricGo]

Cwerdna's post is spot on. The next gen Prius spec is still rumor. I tend to believe a 15% improvement in fuel economy based on the ~ 83 mpg the current Prius obtains in the Japanese test cycle, and hope for a plug-in option even if limited to 10 mile range.

The tax credit will likely cover any depreciation should you decide to switch.

There is also something to be said for not being on the bleeding edge, which would push you out to 2010 or so.

[Godiva]

Why do you think hybrids will depreciate more than non-hybrids? There aren't enough used ones to go around. When the new models come out there still won't be enough used ones for people that want one but can't afford a new one. The technology will be "proven". People will want them. Especially if they're still getting 48 mpg and the other used cars are getting half of that.

With the tax credit, you could probably buy a new 2006 now and then sell it in fall 2008 for a new model 2009 and do just as well as if you'd bought some small, cheap beater.

[B Rad]

<div class='quotetop'>QUOTE(kyto @ Jun 28 2006, 11:31 PM) [snapback]278448[/snapback]</div>

(2) Lease a Prius or another car for 2 years. However, considering that I have enough cash in savings to buy a car (used or new) outright, this seems like a financially unsound move..
[/b]

You have ? two right for sure !!!!!!
If you can get by with a real beater then maybe you can wait. But take away the tax refund and the depreciation on a nice car and you may as well buy now and if (thats a big if) the "NEW" Prius is a big improvement, buy one............
Another way to go would be to buy an old well restored classic, tool around in it for a couple years and maybe sell at a profit
And last of all if you would like a real good, one owner 2000 Jetta VR6. LET ME KNOW!!!!!

[clintd555]

I think you have two good choices. Either buy a cheap used car that will somewhat hold it's value, or buy the Prius now.

Keep in mind that when the '09 Prius comes out in 2008, there will be a HUGE demand. In other words, don't count on getting one in 2008 unless you're willing to pay several thousand over MSRP. And you probably wouldn't get the color or package you want either.

Leasing a car really doesn't make much financial sense to me, but I'm sure there are some conditions that warrants it.

[DaveinOlyWA]

well hard to say as it sounds as if you may not have a pressing need for a car since you have gone 7 years now without one so this makes it a pretty tough call.

if you did need a car right now, i would not wait. the Prius is simply too much better than the 2nd best option imho.

also, the increase in mileage is only really incremental. the possibility of a plug in is WAAAY more exciting to me.

but Toyota has a great track record of worthwhile improvements on the Prius and i see nothing that would change my mind on that.

plus, its the hurry up and wait syndrome. hopefully you dont feel the same way about computers or cellphones. in 2008 there will no doubt be rumours of something bigger and better in two years. that is Toyota's job. keep the excitement up.

as i said... tough call