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I am looking to purchase a car to use for one year and to sell again. It'll be used mostly for driving around a suburb, but with a few extended road trips as well. My wife and I have three elementary aged kids.

I've done this once before as was dissatisfied with the result. We bought a 10-year-old minivan for $3,000, put about $800 into it over the course of a year, and then sold it for about $1,800. (Or perhaps I'm just being cheap? Perhaps $167/mo isn't too bad.)

How do I make this decision? Factors I can imagine being important are:

  • Certain models/brands will have different resale values. Are there any to avoid or seek out?
  • The age of the vehicle — newer is more expensive, but older will presumably mean more repair costs
  • Fuel mileage. A minivan is a bit of a gas guzzler. But smaller cars raise the issue of...
  • Comfort. Is it plausible to fit a family with luggage into anything smaller than a minivan?

Recognizing that there are going to be trade-offs to any decision, and that the balance between any of these factors will be a matter of personal preference, I would appreciate any concrete suggestions about how to evaluate these criteria.

(This will be a cash purchase. This is in the United States.)

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    IMO 167$ a month is nothing. I know it varies greatly between countries, and mine is one of the most expensive to drive a car in, but I have expenses for 8-900$ per month for my car, including everything; 500 if taking away the car loan. – ssn Mar 7 '18 at 13:33
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    Depending on the frequency of road trips, it could be that buying a large sedan or small SUV and renting something larger for road trips could be less expensive overall. With enough savings it could be worth the hassle. – Hart CO Mar 7 '18 at 14:35
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    Why are you looking to sell after one year. If you keep the car, the economics will probably work out better. – Pete B. Mar 7 '18 at 17:10
  • The "use for one year and then sell it" is definitely a puzzler for me. Why do that? In general the cheapest option is to get a used-but-not-super-old car and keep it for at least a few years, or even drive it until it falls apart. – BrenBarn Mar 8 '18 at 6:08
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    It's just a constraint of my situation. I don't live in America; we only come back every few years. – adam.baker Mar 8 '18 at 11:55
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Take an overall view:

Expected depreciation in value + Insurance premium + Expected repair cost + Fuel consumption = Total cost of Ownership

Some of these are a little bit hard to guess, but there are hints.

Depreciation in value: For a normal everyday vehicle, this is quite easy - the less it costs, the less it will lose. Beware of vehicle going against a trend (like diesel in Germany nowadays). This may not be true for older sport scars and specialty vehicles, but those mostly dont perform well in the running costs or just aren´t practical. Here you have to weigh the added comfort of a newer/higher class of vehicle vs. your willingness to pay for its value depreciation. Resale value in general does not matter so much, because it´s buy high & sell high vs. buy low & sell low.

Insurance premium: Just get a quote, and you´ll know exactly.

Expected repair cost: There are three thing to this. First, you have to have a good repair shop available, which is proficient with this brand/model - else you pay extra on work. Second, volume models and domestic manufacturers tend to have cheaper parts-prices, but that may also vary. Generally bigger and more expensive (new) a vehicle is, the more expensive the parts are. Third: There are often know weaknesses or expensive services due. Look what applies to your candidate. A good source of information for all that is usually the mechanic who will be making the repairs, but also googling for common problems with a specific car tells you what to look for.

Fuel consumption: You know how to calculate this. Depending on how much you drive, this factor matters a lot or almost not at all. Don´t trust the manufacturer, get real-world numbers to calculate your fuel consumption. We have a site in Germany which gives you user-generated statistics on this: spritmonitor.de - I don´t know if you have something similar in the US, but google should know.

Bonus Things like cosmetical damages may give you a better deal when you buy the car, but won´t hurt as much when you sell it, as the older a car gets, the less those matter over the pure transportation value.

And last: congratulations it is almost always wise to buy used and cash over new and financed, money wise. some of us take years and 1,000s down the drain to get that.

-5

There is

one factor.

Buy the cheapest car you can find.

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    I can find a car that is ready to go to the junk yard for $50, but when there are $1000 worth of repairs just to get it registered, suddenly the cheapest is no longer the cheapest, is it? This answer does not acknowledge any of the trade-off between upfront costs and hidden problems which will require additional cost. I expect that is why the downvotes. This seems like it's a better fit for a comment than an answer. – NL - Apologize to Monica Mar 13 '18 at 21:27
  • Nathan, regardless of how much you pay for a car, the cheapest used car to the most expensive used car, it is completely random what repairs will cost. If you buy a $500 used car or a $20,000 used car - you could have a $1000 repair the next day, or, not have one repair for 12 months. it is totally random. there is literally no difference in repair cost expectation. – Fattie Mar 13 '18 at 22:44
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    I don’t think you understand the term “random” based on that comment. Actuarial science certainly disagrees with your above assertion. – NL - Apologize to Monica Mar 14 '18 at 1:09
  • If you buy a $500 used car or a $20,000 used car - you could have a $1000 repair the next day, or, not have one repair for 12 months. There is no difference in repair cost expectation. – Fattie Mar 14 '18 at 2:13
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    Keep repeating that assertion, I’m sure it becomes more believable with repetition. – NL - Apologize to Monica Mar 14 '18 at 2:22

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