Going from a no car household to a two car household. What's the most cost-efficient way?

At that kind of mileage, leasing a car probably isn't the way to go. Leases are better when you need to have something, but don't need to make particularly heavy use of it. Most advertised vehicle leases are for 12,000 miles a year, and the extra 5000-8000 miles is probably going to cost you something like $500-800 extra per year, i.e. $40-65 extra a month. I'm currently leasing a vehicle, and though it was still the right choice for me at the time,* the fact that I apparently drive about 20,000 miles a year (who knew?) is going to wind up costing me about $1500 at the end of my lease unless I buy the thing out. I'd recommend sinking ten or so grand into a http://www.kbb.com/used-cars/honda/civic/2005/retail-value/pricing-report?id=880&category=sedan&equipment=36337%7Cfalse%7C36350%7Cfalse&condition=excellent&mileage=83000, as they average about 30 mpg (which is almost as good as you can get without buying a hybrid or a coupe) and are very reasonably priced. You can probably get one with less than 100,000 miles on it in that range, and that should do you for at least five years without too much maintenance. For the second car, sure, something a little bigger. I'll go ahead and recommend the http://www.kbb.com/used-cars/subaru/forester/2005/retail-value/pricing-report?id=1631&category=crossover&condition=excellent&mileage=83000. Like Hondas, Subarus run just about forever, and though they're a little pricier than Hondas, they do seem to fit the bill. A 2005 with about 80,000 miles runs for about $14,000-15,000. Really, if you were going to lease a car, this would be the one you'd want to lease, as it doesn't sound like you'll be driving it all that much. In that case you're looking at new vehicles, but can expect to spend about $200 or so a month for three or so years. Leasing can be a good way to use vehicles (http://ask.metafilter.com/160528/Taking-Over-Automobile-Lease-How-now) but you really need to crunch your numbers. On preview, I see that T.D. Strange and I seem to be of the same mindset. I'd point out that the Civic does tend to get a little better mileage than the Camry, but it is also slightly cheaper. Both are work-horse, bare-bones Japanese sedans with incredible performance history, so you'll do fine with either. *The fact that I leased a Prius and have saved about $1100 in gas helps quite a bit.

Leasing is for suckers.

Car # 2 doesn't need to be very big. You don't need a van or truck to go skiing, camping, haul bikes, etc. A 2nd Toyota Camry/Honda Civic would do fine. I have a Toyota RAV4 because I used to take teenage boys skiing/boarding, and it's now bigger than I need. I haven't yet found the great deal on its replacement, which will be smaller. I used to have a Nissan Sentra, and put a canoe on top, or hauled a small boat with ease. When I have had a chance to buy a used car with nicer options, like the Camry I had a while back, it made a difference in driving enjoyment, for not a lot of money. I miss my sunroof.

Apologies if this gets long! First: depending on where you work, do you have access to a van pool or similar? My town has all of the state agencies as well as a huge university, so many people commute from up to an hour away. I don't think you have to be a state employee, either. Your idea sounds pretty similar to what my former in-laws did. My FIL was trained as an accountant (though he works for the gas company -- seriously, he IS Hank Hill), and he's ridiculously thrifty for pretty much everything. Even though he's a bigger guy and looked silly in a teeny car, he always got whatever car fit his exacting specifications. For the '70s and '80s, that was a VW Super Beetle; I think it then went to a Ford Escort and then a Hyundai Elantra. He bought fairly new if not brand new, though knowing him I'd imagine he'd buy at least a one-year-old car just to avoid the depreciation. They also had a big Chevy pickup with a club cab, suitable for hauling an RV. Currently, one of our apartment manager guys commutes in from about 20 miles away in a Smart Car. I still wouldn't recommend something quite so small in a place with icy winters, especially if you're driving on interstates, but it seems to have worked very well for him over the last several years. I would still recommend buying the BEST tiny car you can. First, the construction and quality will range quite a bit, and if you have a long commute safety will definitely be important. No "rollerskates." Second, if you're spending an hour-plus in the car every day, you don't want to dread it just because you can never find the right stereo adapter. Make your car comfortable and useful for your commute. I agree with everyone else on an older Honda (or Toyota). Hondas run forever and are built solidly, and the insurance will be pretty low. My 2000 Accord is inching up on 200k, but because it was used as a commuting car (like you're considering) it still runs beautifully and feels great inside. A Civic hatchback, if you can find one, might be just the ticket. The weight of Hondas, even the smaller ones, helps them stay stable in the winters, too. (For reference, when the gas prices were super crazy in the height of the economic meltdown a few years ago, old Geo Metros were the hot car for fuel efficiency. Ick.) As for the larger vehicle, Subaru Foresters are indeed great, but they may be hard to come by (because they're great). Stay in the Japanese area, but avoid Nissans; they're designed terribly and have no room in the back seat. While I've been carless by choice in the past, we're currently pondering what we would need to go back down to one car from two, since up until this point my partner has worked irregular hours in what passes for the boonies -- kind of similar to what you have right now. It's a tough equation to manage, but I think you're asking the right questions.

Okay, maybe that's not quite all. The book I linked to is about negotiating the purchase of a car. The reason it's important to do a good job of this is that most used cars sold by dealers are hugely marked up. If you pay the asking price, you are likely to lose a couple thousand dollars or more the moment you sign the purchase agreement. A well-negotiated purchase price can save you more money than years worth of good gas mileage. The gist of the idea is this: selling cars for maximum profit is a shell game. They ask you what you want your monthly payment to be so that they can compensate for the inflated price by setting you up with a loan that takes longer to pay off. Or the ask you what you want to spend, then meet your price but give you a worse car than you could've had if you'd been more careful. If you're not prepared for the games the dealer will play, you will lose.

http://www.amazon.com/exec/obidos/ASIN/0140266704/metafilter-20/ref=nosim/ That is all.

Actually, Madamina, the Smart Car performs excellently in the snow/ice. Most of the weight is over the drive wheels. Additionally, the Smart Car is much roomier inside than most Japanese cars — I actually have plenty of headroom at 6'2" whereas in a Prius I'm hunched over. There have not been any major changes to the engineering of the Smart since the 2008 model, so you should be able to find an affordable one bought for novelty which has now worn off. However, for a commute that long, I would recommend tracking down the Passion model with leather seats, and if you are somewhat handy, install the Area 451 cruise control module.

For your second car I'd buy an old car that has fully depreciated. You have a reliable car to get you to and from work so no sense paying for the reliability in your second car. If you have only once every six months haul a dinette set hauling needs you would be much better off with a small car with a trailer hitch and a utility trailer than a pickup. Mileage would be better the 99/100 you aren't hauling something, loading a trailer is easier, and you can haul more (volume wise) with a utility trailer than with those half assed boxes that come on small four door pickups (eg: the sport trac only has a 36" box, I've got more space behind second row seats of my shorty Caravan).

Tangential but: When you go to insure these cars, be sure to ask about multi-car discounts. A lot of companies have them, not everyone volunteers that information.