My point is that you're going to be spending a lot of money anyway by doing all the driving you're planning on doing. If this is a long-term setup, your best bet is to jump in the deep end and get a high-mileage car. The skills you pick up along the way will pay some really nice dividends over time.
This makes a lot of sense to me. If you're willing to learn car maintenance of course. I bought my '96 Volvo with 155k on it last summer for $2000. Now it has 165k on it. It's probably worth slightly more now, because of all the maintenance I've done on it recently. As long as I don't do anything stupid, it should get me to 250k-300k.
My girlfriend's sister bought a new Prius last fall. Now it has 9500 miles on it. I don't want to know how much it fell in value.
Her Prius gets double the gas mileage, but is far more expensive from a depreciation and insurance perspective. I did some pretty scary math a few months ago. Assuming my Volvo evaporates into a cloud of dust at 200k, she has to get her Prius to 314k without any major work before the gas savings make up for increased depreciation and insurance. And that's just breaking even. Compared to a 25MPG Volvo wagon. And not counting her financing. She still thinks she is saving money.
Depreciation is the silent cost of driving nobody thinks about. And it tends to be the largest. A $24,000 Prius will cost you $0.12 a mile if you drive it for 200,000. In terms of cost, that's like having a second engine always burning money at about 22MPG (based on current prices by me). A $2,000 Volvo with 155,000 upon purchase will cost $0.04 per mile if you drive it to 200,000. Its "second engine" burns money at 88MPG. So the average efficiency of my Volvo's two engines is 56MPG. The Prius' engines average out to 36MPG.
It gets even more dramatic if you have a more sensible commuter than my 25MPG Volvo. A $900 Geo Metro beater has two very small engines. I think the best value/practicality ratio is right around the one-tier-above-beater range. Well-maintained high-miles car with life left in it. A 2000 Chevy Prizm with 135k can be had for $2100 just going by a gauge of my local craigslist.
The more I think about it, the more I find it harder to ever justify a car that costs more than a few grand.
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When I run the math, the Prius is cheaper over the next 45k
Volvo = .04*45k (2k depreciation)+ 45k/25*4(7200 in fuel) = 9200
Prius = .12*45k (5400)+ 45k/50*4(3600) = 9000
Obviously things like exact price of gas(3.50-5 would be a reasonable guess, I would guess the volvo really wants premium) in your area over the next 4+ years, mpg (I doubt either of these cars is getting 50 or 25), taxes insurance, opportunity cost, and so on factor in and most of them favor the used car.
Personally I always thought the sweet spot of buying cars is getting last years model new. The dealer pays for a good chunk of the depreciation (i.e. you are buying the car well below invoice) and you know the car was well maintained (i.e. you did the work). The key with car ownership is driving it into the ground. Trade that Prius in at 100k, and the value equation of buying new goes way down.