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Best of the Lot: Should I get a new car or buy out my lease?

2014 Ford Focus

Ford

I have a 2010 Honda Civic Sport that is coming to the end of its lease in March. I'm debating my options between buying out the lease (residual is several thousand less than comparables on AutoTrader) and replacing it with something new.

If I go the new route, I'd want to stay with a manual; have something relatively small but will fit skis inside; have good gas mileage (I commute from Toronto to Newmarket for work); buy rather than lease (given the kilometres I rack up); and, maybe look at hatchbacks.

What options do you think are best? I have looked at everything from a used Audi A3 to a new Subaru Impreza hatch to a 2014 Mazda3 hatch, but can't narrow down my options. – Catherine in Toronto

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Cato: Catherine, buy out the lease and move on. With the number of kilometres you put on your car, you want something under warranty. Your three-year Honda warranty is done. And, by the way, shouldn't Honda offer five-year coverage like Hyundai does on the rival Elantra? I digress.

What Honda has, that Hyundai doesn't, is big-time residuals. Canadian Black Book says a typical Honda should be worth 45 per cent of its sticker after four years; ALG says Honda is best among mainstream brands at 42.8 per cent after four. In both studies, Honda tops Hyundai on residuals by five points.

Catherine, you'll likely get $10,000 for that used Civic sedan, perhaps more. Your buyout should be around $8,000. Pocket the $2,000 and use it as a down payment on something new with a warranty.

Vaughan: Wait a minute, Cato. You may be a car salesman, but I doubt Kathy is. It is an enormous pain to sell a used car. You'll recall a friend of ours who knows everything about cars, tried to do just that and was tormented by tire-kickers. He became so fed up with people trying to beat the price down to next to nothing, he wholesaled the car.

So, no. I do not recommend a curbside sale. Cathy, you're a high mileage driver. Buy out the lease and drive that Honda into the ground. It will last for years.

Cato: Selling a used junker is tough, but not a Honda. They're in demand. AutoTrader tells me that so far this year, curious Civic shoppers have authored a staggering 157,885,652 searches. The Civic is No. 2 for searches, second only to the Ford F-Series pickup with 200,594,817. Katie won't have trouble moving the Civic. There's plenty of hungry buyers out there.

On the other hand, why buy a used A3? Not when you have so much to choose from in new cars. Start with the Impreza. Excellent car. Reliable, outstanding all-wheel drive, a Top Safety Pick and all starting for $20,895. Too bad about that three-year Subaru warranty.

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2014 Subaru Impreza Subaru Subaru  

Vaughan: If Kathy really wants all-wheel drive for that trip to Newmarket, then the Impreza is a great way to go. This one actually gets decent fuel economy, not something Subies were known for in the past. The interior looks cheap, but it is comfortable.

As for the Mazda3 Kathy mentioned, it is even more comfortable than the Subie, has a better interior and, with all that SkyActiv stuff, delivers terrific fuel economy. A hatchback version is available, although you'll pay more for it.

Cato: A thousand more, compared to the Mazda3 sedan – $16,995 for the hatch, $15,995 for the sedan. Mazda has a great-looking hatchback here. Sharp. Entertaining from behind the wheel and roomy inside, too. And safe.

But Cathy, don't stop your shopping there. Visit a Ford dealer to test drive a Focus hatchback. This is the best-driving small car on the market today. Just excellent. But you pay for it. The cheapest Focus hatch starts at $19,699 and a loaded Focus Titanium Focus is nearly $26,000.

Vaughan: Why not look at the Hyundai Elantra GT? That's the hatchback version of the second best-selling car in Canada – only trailing Cathy's Civic.

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The GT is also the body style Honda should offer on the Civic – hatchback. I liked the one I drove last year, but didn't like the old-fashioned engine. For 2014, it gets the gas direct-injection engine, which is a gem. Hatchbacks are incredibly functional, and that's what would steer me to the GT.

2014 Mazda3 Mazda Mazda  

Cato: Except that 2014 GT is not yet in dealerships. If it's AWD, the Impreza is it. The Mazda is stylish, entertaining and fuel efficient, and the Focus is the best driver with fantastic seats.

Vaughan: A penny saved is a penny earned. Keep the Civic for another year or two, Cathy. It's the best bargain for the moment.

Jeremy Cato and Michael Vaughan are co-hosts of Car/Business, which airs Thursdays at 8:30 p.m. on Business News Network and Saturdays at 11:30 a.m. on CTV.

HOW THEY COMPARE

 

2014 Ford Focus SE hatchback

2014 Mazda3 Sport GX-SKY

2014 Subaru Impreza 2.0i

Wheelbase (mm):

2649

2700

2645

Length (mm):

4359

4460

4415

Width (mm):

1842

1796

1740

Height (mm)

1466

1455

1465

Engine:

2.0-litre four-cylinder

2.0-litre four-cylinder

2.0-litre four-cylinder

Output (horsepower/torque)

160/146 lb-ft

155/150 lb-ft

148/145 lb-ft

Drive system:

Front-wheel drive

Front-wheel drive

All-wheel drive

Transmission

Five-speed manual

Six-speed manual

Five-speed manual

Curb weight (kg)

1337

1274

1320

Fuel economy (litres/100 km)

7.8 city/5.5 highway

7.0 city/4.9 highway

8.3 city/5.9 highway

Base price

$19,699

$16,995

$20,895

Source: car manufacturers

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More

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