Is it better to buy this used car from Craigslist or from a dealership?
"I do not think you are missing much.  One thing you have right is low cost cars depreciate almost nothing.  One thing you are missing is your satisfaction index.  Driving a 200K car for 4 years requires a bit of motivation when your friends are driving new cars.  Typically you need a larger goal to keep you focused.  That might be saving money, getting out of debt, or obtaining an education. Buying a car from a private party, Craigslist is only one source, can save both parties money as the ""middle man"" is cut out. If you have the ability to do so, one can save a lot of money by doing your own brakes.  The info is up on youtube, and I typically ""earn"" between 100-300/hour doing this work myself. Most of the time warranties do not pay off.  At the core, they are insurance and insurance companies are in the business to make money.  If your car is likely to need repairs a policy may be unattainable or very high in price." The 200K vehicle is likely the better deal.  Get your own mechanic to check it out.  If it doesn't have major issues, it will likely cost you less. Why?  Because you've wisely included $6000 in expected maintenance.  Yet it has the possibility of not needing more than $500 of maintenance during the 4 years you plan on owning it.  It's a gamble, but you have the chance to save $5500 of that estimated cost with that vehicle. Note that you will also need to factor in tires for either vehicle, unless that is included in your maintenance estimate. I agree with the previous comments one thing that got brought up a while back when I was looking into purchasing a Prius was the battery replacement, someone once told me it was very expensive in the event it failed and needed to be changed, I'm not talking about the 12 volt but the big nickel metal hydride one. Another thing to factor is the gas that you will save, normally the Prius get double the gas milage of that of civic or a corolla but unless you drive a bunch of miles per day you really don't see the pay off.  Also if you can pull a CarFax on the car, the 20 dollar investment is worth it because you can find out if it was in an accident or if it's a lemon! I once bought a bmw and didn't do a CarFax and later ended up finding out that the car had more owners than a taxi had customers.  Also just like said above 200k car vs 100k doest always mean the 100k is better off, especially if the previous owner never services it well. Get the car checkout before you make the deal to buy. "You seem to be on the right track.  I feel, though, that it's worth addressing your maintenance budget.  Even if both cars described in your question are from the same model year, one has been in service 2x more; one car has been on the road, in weather, twice as much as the other.  I'm not sure what's being represented in the $6k of maintenance, but a whole host of systems can require maintenance or replacement at 200k+ miles.  A/C compressor, all sorts of rubber parts (seals, hoses, belts, bushings), computer systems, stereo, window regulators, the list goes on.  I don't know at what point the battery on a hybrid needs to be replaced, or what that replacement entails, but likely the battery or the hybrid recharge system will require something after 200k miles of service.  I would learn more about what actual maintenance a high mileage prius can experience. To answer your question though, at this level of ""used"" I don't think the dealership adds anything to the equation.  When you're buying certified pre-owned, the dealership/manufacturer relationship and warranty can be meaningful.  When you're buying a 100k+ miles car from a random small used car lot it might as well be a stranger on craigslist..."
"Any one of your three options is viable and has its advantages and disadvantages. Personally, I would go for the used option, but I am can-do kind of person. If you don't like micro-managing a car, you may prefer leasing. A new car is sort of the middle of the road option. Leasing will be most expensive and most liability. If you have an accident, the leasing arrangements are designed to extract money from you... heavily. Even a minor accident can require you to pay for expensive repairs, usually much more expensive than if you had your own car fixed. So, not only will you pay more per month, but your accident liability will be a lot higher. With your own car, you will need to sell it (or bring it back to the UK) obviously. A used car will be the cheapest option. A non-descript used car from the local area can also make you ""blend in"" and be less like to be targeted by a criminal as an outsider. As long as you stay away from dealers and buy the car from a private person of good reputation, you have an odds-on chance of getting a decent car. Make sure you check out the person and make sure they are ""real"". Some dealers, called ""curbstoners"", try to pretend to be original owners. You can always spot such frauds because the title will be new. Make sure the same owner has had the car for at least 3-4 years and that it says that on the title. Also, try to buy from somebody who is financially well off--they have less reason to try to screw you. Students, people under 30 and working class are bad people to buy from. Married professionals over age 35 are the right kind of person to buy from." I have had it two way now: I got pre-approval from my credit union which just so happened to be one of the bigger vehicle lenders in the metro area.  What I found out was that the dealership (which was one of the bigger ones in the metro area) had a computer system that looked up my deal with the credit union. Basically, I signed some contracts and the CU and the dealership did whatever paperwork they needed to without me. I bought a used car and drove it off of the lot that night, and I didn't ever go back (for anything financial) Both my wife and her sister received blank checks that were valid up to a certain amount.  In the case of my sister in law, she signed the check, the dealership called to confirm funds and she drove off. In the case of my wife, she ended up negotiating a better deal with dealer finance, but I was assured she only had to sign the check, get it verified and drive the car home. Option 2. Selling the car yourself will give you the best value, especially if you can get its full value. This will cost you time, but will return much better return for your money. Also, I would strongly recommend buying a used car from a private owner (not a dealer), rather than buying a new car. For $14,000 in cash you can probably get a car like a 2013 Ford Fusion that has excellent all-wheel drive and winter handling. A new Fusion, loaded, will cost at least $25,000 from a dealer. If you buy a 2013 car outright from a private owner, you will have NO PAYMENTS and can spend that money on investments and build your wealth. "He sounds like a very bad salesman and I should know, because I was a sales manager at a bike shop which sold bikes from $200 to $10k. Now I had a clear goal, which is to sell as many bikes at the highest price possible, but I didn't do that by making customers uncomfortable. Each customer received different treatment depending on what they were looking for.  For example, the $200 beach cruiser buyer was going to be told ""You look great on that bike... can I ring you up?"", whereas the racer interested in saving grams will receive a detailed discussion about his bike options.  The $200 bike customer won't have very sophisticated questions (although I could give a lecture on cruisers), so giving out too much info complicates a likely quick impulse buy.  On the other hand, we are building a relationship with the racer which will include detailed fitting sessions and time-consuming mechanical service.  While I also want to close a high priced sale, it will take several visits to prove both I have the right bike and this is the best shop. But no matter what you were buying, I was always pleasant and unhurried, and my customers left happy.   Specifically with this situation of high pressure tactics, the problem is the competition with internet sales.  Often customers will have only 2 criteria, the model and the price, and if a shop does not meet both, the customer walks right out.   Possibly this sales guy is a bit cynical with his tactics, but the reality is that if you have no relationship with that shop, you fall into the category of internet buyer.  One thing the sales guy could have done was not tell you we wasn't going to honor this price if you came back.  Occasionally there would be an internet buyer, and I showed no unpleasantness even though internet sellers could crush our brick and mortar shop.  I would mention a competitive price and if he bought it, great, and if not, that's just business.   As for the buyer, I would treat these tactics with a certain detachment.  I would personally chuckle at his treatment and ask if I could kick the tires, an user car saying.   I suppose the bottom line is if you are ready to buy this specific model, and if the price is right (and the shop is ethical so you won't get ripped off with garbage), then you have to be ready to buy on the spot. I will point out one horrible experience I had at a car dealership.  I came in 15 minutes before closing and a sales person gave me a price almost a third cheaper than list.  I wasn't ready to buy on my first visit ever to a dealership and of course, buying a car has all kinds of hidden fees.  I asked will this be the price tomorrow, and he said absolutely not.  I told him, ""so if I come in tomorrow morning, your dealer clock has only gone 15 minutes"" but that logic did not register with him.   Maybe he thought I was going to spend 15k on the spot and pressure tactics would work on me.  I never came back, but I did go another dealership and bought a car after a reasonable negotiation." I'd suggest buying a used car for cash, car loans are a bad idea. I bought my last car a few years ago for $8k off of craigslist, and it is still running great. Make sure you get a car checked out by a mechanic before buying (usually they'll drop it off at a mechanic you want to have take a look, or perhaps just go with you). My general rule is to not take out loans for anything which decreases in value. So a home mortgage would be fine, a car loan is not a great plan. Buy cash, and save for the next purchase. If you buy a decent used Corolla (or other small import car), you can get it for $8k, it will likely last a few years at least. That could end up costing you less than $200 per month total, or less. Much better deal in the long run. I respectfully disagree with @JohnFX's comment regarding new vs used.  (John knows what is talking about though; he gave an awesome answer on buying a car:  What are some tips for getting the upper hand in car price negotiations?) The answer to your question is based on whether or you not you can stand to have a small, loud, cheap but reliable car for the next 10 or 15 years. If you plan to keep your new car until it dies 20 years from now, then a new car can be a fine choice.  I just bought a car and the difference between my 2013 Hyundai and a comparable 2012 Hyundai wasn't much.  Furthermore, it was hard to even find a 2012 (which justifies the higher price from dealerships and the private market).  Doing math in my head told me the reduced usage I will get out of the car wasn't offset by the slightly lower price. Depending on the specific age, insurance on newer cars can be cheaper than insurance on older cars. (But you have to have carry more insurance, so consider that as well.)  There might not be a different between a 2010 and a 2012, but there will likely be for a 2005 and the 2013. New cars can be cheaper to operate.  Lower fuel costs, better safety and possibly pollution costs.  They are tuned up and you know everything about their history. Repairs and factory warranties might not be available on a used car, so if you car turns out to be a problem, your out of pocket is limited. These programs don't mean anything.  Get an independent certified mechanic to check out any used car you buy.  If the dealer won't let you get the car checked out, then they aren't worth your business.  Certified cars don't justify their cost according to consumer reports, they are more for marketing than reliability. Don't waste money on a third party warranty.  Either the car is good and doesn't need it, or it needs a warranty and you shouldn't buy it.  If you new car comes with a factory warranty, that is fine.  Radio host Clark Howard is indifferent if you want to purchase a factory warranty separately, but never a third party. Just out of college, you probably will be better off spending the least amount of money you can for a good used car. If for no other reason, this likely isn't going to be your car in the near future.  (Only you can answer that) If you have a feeling you won't keep your tiny car well into your 30s, then definitely don't buy a new car.   Also, my experience only applies to my make and model.  Certain models of cars keep their value and the difference between new and used isn't much for the most recent model years. But there are many more makes and models that don't pan out that way. Cash is very effective at getting a discount when buying from individuals (craigslist, garage sales, estate sales, flea markets, etc.).   I'll make an offer, then thumb through the cash while they consider it.   There eyes will dart back and forth between my eyes and the cash as they decide whether to take my offer. Car dealers do seem to be very unique.   The dealer I bought at recently said that 70% of their deals were cash purchases, JoeTaxpayer's dealer said 1% were cash purchases.   I've had good luck negotiating with cash for well-loved cars (under $10K) from both individuals or used dealers. I'm also looking for carpet for my house and the first vendor I went to offered at 5% discount if I paid up front (no financing). Check with local mechanics which cars they drive and dealers the buy from. Tell them your budget and needs and you'll find they're pretty consistent in their recommendations. Also, don't overlook dealers in favour of buying direct from owners, both have pros and cons.  Dealers have to allow you to return the vehicle within a certain time frame, their name is also on the line. Some offer warranties to fix anything that goes wrong in the first x years. Do your research, but for old cars this can be a valuable saving. Also, some dealers offer to provide you with parts at cost for the life of the vehicle, also potential savings. Don't go in on a Saturday, do go in near the end of the month. Go back several times, compare, negotiate.