I'm moving from San Francisco to Palo Alto this fall and will be needing a car to get around. This will be my first car purchase ever. I had originally planned on buying (outright with my savings) a 2006 Prius in September, but after reading all the articles and posts about the much-anticipated 100+ MPG 2008 or 2009 model, I am now strongly consider waiting until then to buy a Prius.

I know there's always going to be a new and improved model right around the corner whenever you make a car purchase, but I feel that this level of innovation is enough to actually make the wait worthwhile.

As far as I see it, my options are as follows:

(1) Buy a used car and re-sell it in 1-2 years. I'd probably opt for a non-hybrid that I think is unlikely to lose a lot of value over the course of the two years. I am guessing that the resale value of hybrids will drop more (in % terms) than a non-hybrid car with the launch of a 100+ MPG Prius.

(2) Lease a Prius or another car for 2 years. However, considering that I have enough cash in savings to buy a car (used or new) outright, this seems like a financially unsound move.

(3) Suck it up and buy a new Prius now. Who knows-- the 100+ MPG may not even materialize for another 3-4 years...

Would love to get others perspectives and opinions on which option is best. As I mentioned, I've never purchased a car before-- I have lived in a city and not needed one for the past seven years. Would really appreciate hearing the thoughts of all of you with a bit more car-buying experience and saavy.

Thanks!