How long do you finance a new vehicle purchase?

[16hypen3sp]

Interested to see the average time frame for Beyonders financing a vehicle purchase.

Financing in this poll means using a Line of Credit or taking out a loan.

Use your most recent vehicle purchase for your respective vote.

[pheoxs]

Depends on the interest rate. If 0% I'll ride it out as long as I can. If it's 2-3% or more, usually 3 years max and try to pay it down asap. I hate monthly bills

[Hallowed_point]

4 years max with 30% down.

[16hypen3sp]

My last vehicle purchase was my truck. $30k after trade-in and I have it paid off in 9 months. But I had a fairly aggressive pay down discipline behind it.

[A2VR6]

Originally posted by pheoxs
Depends on the interest rate.

:werd:

[Team_Mclaren]

Originally posted by 16hypen3sp
My last vehicle purchase was my truck. $30k after trade-in and I have it paid off in 9 months. But I had a fairly aggressive pay down discipline behind it.

Do you have no expenses that allows you to pay 3k a month on a car?

Why not just pay cash then...?!

[16hypen3sp]

Originally posted by Team_Mclaren


Do you have no expenses that allows you to pay 3k a month on a car?

Why not just pay cash then...?!

A lot of my savings are tied up in TFSA and RRSP accounts. I considered cashing out most of my TFSA to pay in cash but then decided against it. That money was invested and I didn't want to mess with it.

[SKR]

No more than 4 years, and less if I can make the payments.

[Darkane]

Historically 3 years have the best dealer rates.

My last big time purchase was 8 years financed, got an additional couple bucks off the car and a free cover. Your haggling has much better punching power if you're 8 years up front - tell them this is the reason you want max loan time.

Immediately move that loan to Heloc much lower interest and power pay.

Never more than 3 years total.

[killramos]

100% depends on the finance rate. more than .5% below par? As long as possible. Any higher than that as short as possible.

High finance rates would make me more likely to Invest in a Heloc.

[nickyh]

I normally do 5yr financing but have it paid off in two or 3 at the longest. I hate car payments but can't bring myself to pay cash outright even if I could. I like having that emergency fund intact.

[03ozwhip]

I've done 7 years in the past but I rarely keep a vehicle more than 2 years, so it depends on the interest rate. When I was at BMW yesterday even used rates are only 1.9 so I was thinking of going 7 years based on that.

[Rocket1k78]

Originally posted by 16hypen3sp
My last vehicle purchase was my truck. $30k after trade-in and I have it paid off in 9 months. But I had a fairly aggressive pay down discipline behind it.

Did you create this thread just to toot your own horn :rofl:

[Sugarphreak]

...

[Twin_Cam_Turbo]

4 years max but I don't think I will ever finance a car again.

[leftwing]

Originally posted by Rocket1k78


Did you create this thread just to toot your own horn :rofl:

Haha exactly what I thought.

[Redlyne_mr2]

Here are some new car industry stats.

Average term on a new car = 84 months
Average time it takes to pay off a $30K balance using a line of credit = 10 years

That's why I loving leasing new, used I buy outright since that's just basically moving money around.

[killramos]

Originally posted by Redlyne_mr2
Here are some new car industry stats.

Average term on a new car = 84 months
Average time it takes to pay off a $30K balance using a line of credit = 10 years

That's why I loving leasing new, used I buy outright since that's just basically moving money around.

Thats fuct, I believe it 100%. But fuct.

Whenever you listen to news reports about consumer debt and shake your heads. This is 100% what causes it.

:nut:

[rx7_turbo2]

Completely dependant on the interest rate. If my money is earning more for me elsewhere why tie the cash up in a depreciating asset?

[03ozwhip]

Under 10-15k I will buy outright but there's no way I'm throwing 40k at a vehicle that is going to depreciate unless it benefits me somehow. I paid my 2013 ram off in a year but that was because I wanted no debt on my record for a higher mortgage.

[corsvette]

I find the makes with the lowest resale value offer the longest financing terms. Biggest offenders being Hyundai, Kia, and Fiatsler. I think its just a ploy to gain sales and market share by forcefeeding not too bright consumers into a huge term with low payments. They don't shop smart, give them the lowest payments on a well equipped car and you'll make sales.

A few summers back a family member (in law thank goodness) that lives in Ontario bought a Hyundai Genesis on a 96 month term. He argued that he got a luxury car for lower payments than a Ford Fusion. The Fusion was probably on a standard 60-72 month term, yet that mattered none to him. That POS Hyundai had racked up a stack of repairs under warranty already, he'll have three years of payments left after the warranty expires, and I'm pretty sure he'll be upside down till the end. Probably end up trading in before the term is over and rolling the negative equity into the next car loan, just like so many others do today. I'm amazed at the amounts the banks/finance companies will allow to roll over to new cars loans. Some people will never get out from being underwater on their car loans.

[16hypen3sp]

Originally posted by Rocket1k78


Did you create this thread just to toot your own horn :rofl:

Lol yes!!!! Do I get an award?!?!

I was just thinking about it and wondered what the average was on Beyond.


But yah I can see how you can make that conclusion haha.

[FixedGear]

Ive never financed a car and think people shouldn't buy what they can't afford.

[blitz]

I did 72 months on the 15k (after trade in) for my Fiesta. I'd be stupid not too at 0%.

[lasimmon]

I did 5 years cause it was 0%.

[Team_Mclaren]

Originally posted by FixedGear
Ive never financed a car and think people shouldn't buy what they can't afford.

thats as stupid as saying you'll not buy a house because you dont want a mortgage

[rx7_turbo2]

Originally posted by FixedGear
Ive never financed a car and think people shouldn't buy what they can't afford.

So the money you have earning even a modest return in an investment account would be better tied up in a depreciating asset? :nut:

Financing doesn't always makes sense, like everything there's multiple factors to consider, but there are certainly times it makes more sense to take advantage of a low interest rate and keep your money where it is.

[01RedDX]

.

[djmr2]

Originally posted by Team_Mclaren


thats as stupid as saying you'll not buy a house because you dont want a mortgage


Originally posted by rx7_turbo2

So the money you have earning even a modest return in an investment account would be better tied up in a depreciating asset?

Financing doesn't always makes sense, like everything there's multiple factors to consider, but there are certainly times it makes more sense to take advantage of a low interest rate and keep your money where it is.


:thumbsup: :thumbsup: :thumbsup:

or maybe they're beyond millionaires?

[AE92_TreunoSC]

Problem with 5 years or over (0% or not) is the depreciation is so rapid that the loan becomes larger than the equity in the car.

I prefer 5 years or under with at least 20% down. But everyone has different situations.

[Sdeibert]

Originally posted by AE92_TreunoSC
Problem with 5 years or over (0% or not) is the depreciation is so rapid that the loan becomes larger than the equity in the car.

I prefer 5 years or under with at least 20% down. But everyone has different situations.

So you wouldn't buy a Hyundai Genesis ultimate ($60000) at 0% - 96 months? :D

[Sugarphreak]

...

[max_boost]

I thought u guys pay cash for everything except your house lol

[FixedGear]

Originally posted by rx7_turbo2


So the money you have earning even a modest return in an investment account would be better tied up in a depreciating asset? :nut:


you must either be the wolf of wallstreet or investing in a different market than I. "modest return" :rofl: This is a terrible time to be saving. My Roth IRA hasn't made any money since end of 2011 and my 401k (vanguard index fund) isn't making shit either. Actually the US market has been stable if not decreasing for over a year. If I took your advice, I'd have lost even more money than I have.

[ercchry]

Financed 2 cars in my life, both 5yr.... Now I just pay cash, mildly used or really used if its somethings I've wanted for a while. Last vehicle was bought a year old for 30% off new price, with the dollar at par... Pretty sure I could of sent it off to the states when our dollar was super low and broke even after 2 years and 40k kms

[killramos]

If someone is offering 0.9% financing or less I can beat that by leaving the money in my bloody bank account.

Just because you are literally garbage at investing doesn't mean everyone around you is lieing.

I don't invest all that actively and still pulled a 8% return last year (you know you can invest in other sectors than energy and Canadian equity right) rofl. Right now is a good time to be moving US/Global equity to take advantage of FX and potential future rise in CAD.

Debt is a tool, like any tool use it or don't. Big difference between using and abusing.

:dunno:

[ercchry]

People financing new cars like they are some sort of money gurus is pretty fucking comical...

"Free money" ....and 40% loss in span of ownership :rofl:

If you are spending enough money on a car that it would actually make a difference in your investment earnings... Don't do it!

[FixedGear]

Originally posted by killramos
If someone is offering 0.9% financing or less I can beat that by leaving the money in my bloody bank account.

Just because you are literally garbage at investing doesn't mean everyone around you is lieing.

I don't invest all that actively and still pulled a 8% return last year (you know you can invest in other sectors than energy and Canadian equity right) rofl. Right now is a good time to be moving US/Global equity to take advantage of FX and potential future rise in CAD.

Debt is a tool, like any tool use it or don't. Big difference between using and abusing.

:dunno:

you are a fucking idiot. :rofl: :rofl: :rofl: :nut: :nut: :nut:

[FixedGear]

BTW I keep about $20k in my checking account, I literally made $0.17 in interest last month. :rofl: :rofl: :rofl:

EDIT: here are more numbers:

Interest Earned This Period$0.09
Interest Paid Year-to-Date$0.49

This is Wells Fargo in the US.

[01RedDX]

.

[ercchry]

Originally posted by 01RedDX

Isn't it more like 40% loss in the first two years of ownership? Yeah, it's pretty bad.




That's a long term hold for me :rofl:

[killramos]

Originally posted by FixedGear


you are a fucking idiot. :rofl: :rofl: :rofl: :nut: :nut: :nut:

Call me what you want, at least I'm making money on my investments :nut:

[bjstare]

Originally posted by killramos


Call me what you want, at least I'm making money on my investments :nut:

If you sell your car today, I'd guess you'll take a bath on depreciation since you financed a new car (IIRC). Have you made enough in investments to offset the depreciation + interest paid on debt? I doubt it. If you have, you should quit your day job and I'll pay you to invest my money as well. :rofl:

I believe that's the point he's trying to make.

[dirtsniffer]

Is it really lost if you don't sell it? Does anyone buy a car to keep for 10 years any more?

[bjstare]

Originally posted by dirtsniffer
Is it really lost if you don't sell it? Does anyone buy a car to keep for 10 years any more?

No, as with any investment it's not a loss (or gain?) unless it's sold.

[403ep3]

I did 4 years for my '15 TDI b/c it was 0%. I will likely pay it off before then though

[SkiBum5.0]

A lot of people relating to their car as an investment. I buy a vehicle to enjoy it. If it has a payment, and it fits within my cash flow, then it's A-okay.

A vehicle is an expense, period. If I'm paying for something, I better enjoy it. And if that means spending more for a new car then so be it.

[Hallowed_point]

Originally posted by SkiBum5.0
A lot of people relating to their car as an investment. I buy a vehicle to enjoy it. If it has a payment, and it fits within my cash flow, then it's A-okay.

A vehicle is an expense, period. If I'm paying for something, I better enjoy it. And if that means spending more for a new car then so be it.

EXACTLY :thumbsup: :thumbsup:

[ercchry]

Originally posted by SkiBum5.0
A lot of people relating to their car as an investment. I buy a vehicle to enjoy it. If it has a payment, and it fits within my cash flow, then it's A-okay.

A vehicle is an expense, period. If I'm paying for something, I better enjoy it. And if that means spending more for a new car then so be it.

It's fine to have expenses based on enjoying life.... As long as you don't come off as some sort of superior money management d-bag about it :rofl:

...and can actually afford it, lots of young people finance a car that the bank says they can afford straight out of school... Terrible way to start out at life financially

[Hallowed_point]

Originally posted by cjblair
If you sell your car today, I'd guess you'll take a bath on depreciation since you financed a new car (IIRC). Have you made enough in investments to offset the depreciation + interest paid on debt? I doubt it. If you have, you should quit your day job and I'll pay you to invest my money as well. :rofl:

I believe that's the point he's trying to make.

Unless it's a Ferrari GTO, your car ain't an investment.

[ercchry]

Originally posted by Hallowed_point


Unless it's a Ferrari GTO, your car ain't an investment.

The point is that 0% financing is a trap and depreciation on a brand new car is the real killer financially vs paying cash/heloc* on a used vehicle

For some segments of vehicles there has been an up side in value in cad on purchases made when we were at par, pickups heading south of the border for example... And basically anything that sells on a world market ie. My fil just sold his sls for a pretty decent return this past week





*heloc is basically the only reasonable form of financing a used vehicle since dealers don't subsidize the rates, and banks want too much for unsecured loans

[killramos]

Originally posted by cjblair


If you sell your car today, I'd guess you'll take a bath on depreciation since you financed a new car (IIRC). Have you made enough in investments to offset the depreciation + interest paid on debt? I doubt it. If you have, you should quit your day job and I'll pay you to invest my money as well. :rofl:

I believe that's the point he's trying to make.

Personally, since people think that my personal use of car loans is relevant to the discussion? I did finance my car. With over 50% down after a trade in and a healthy cash deposit, and I made payments on it for about 8 months before i cut a cheque for the remaining loan value. Which was a good decision because the loan for was 5.9% interest. I used the loan as a tool to solve solve a short term liquidity problem ( aka to hold me off until my bonus came I used to pay off the car along with the accretion on a good market call I made ). I am sure my car has depreciated significantly since i purchased it 2 years ago, just like any car would. But doesn't really matter as I don't consider my cars to be an asset.

:dunno:

Whatever point he was trying to make its a stupid one, I have no idea why people think that depreciation is a factor when making the decision between keeping money accruing say 2, 4, 5 or 6% interest ( or accretion in terms of non interest paying investments) vs paying off a loan costing you 0 or 0.9% interest?

Its an argument about making least worst decisions. Obviously purchasing just about anything is a bad financial decision.

But you can't drive your portfolio, and I know for a fact that my car makes me far happier than my investment account does.

I don't invest in cars. I enjoy them. I buy them to make me happy, not to make me money. Just like i don't invest in a cheeseburger for lunch.

Also the new vs used argument is 100% personal preference. If you don't see value in owning a new car then good for you, buy used all you want. But a lot of people do not agree with you on that point, millions of new cars are sold every year. That's their decision just like its yours to buy used cars. Who cares?

[topmade]

Originally posted by dirtsniffer
Is it really lost if you don't sell it? Does anyone buy a car to keep for 10 years any more?
:thumbsup: I do :clap:. We payout all our vehicles and keep them for about 15+ years. I don't care about driving new vehicles with their fancy toys every few years and just want reliability. I love how sales guys try to imply that cars will immediately turn into heaping piles of shit once the warranty is up so you buy new every few years. The most I did on my 94 civic that I bought new was water pump, timing belt and clutch. 07 Sienna still drives like new at almost 10 years old with nothing major done to it other than regular maintenance.

[RealJimmyJames]

If you are buying the same car either way, it can make sense to finance if a) rates are lower than an alternative "safe" investment and b) there is no discount/incentive for cash purchase.

Nobody seriously thinks a brand new car is an "investment".

[mrsingh]

I have typically financed my new cars for 4 years, but have always paid them off within the first two.

Any used cars I have bought, have always done with cash.

[flipstah]

For me, I'd never put down payments on a depreciating asset. It lowers my monthly, yes, but it makes no sense.

I'm financing for 5 years and never again. It feels like an eternity.

I'm counting the days. :hitit:

I don't know how people can do 6 or 7 year loans. Jeezus.

[Aleks]

Lately only leased new cars. Have done anywhere from 24 to 60 month leases. Like the increased flexibility of a lease and lower risk should something go wrong with the car.

[Hallowed_point]

Originally posted by killramos
I don't invest in cars. I enjoy them. I buy them to make me happy, not to make me money. Just like i don't invest in a cheeseburger for lunch. Love that quote!

[Hallowed_point]

Originally posted by ercchry
The point is that 0% financing is a trap and depreciation on a brand new car is the real killer financially vs paying cash/heloc* on a used vehicle

*heloc is basically the only reasonable form of financing a used vehicle since dealers don't subsidize the rates, and banks want too much for unsecured loans

:thumbsup:

[lilmira]

Sometimes I don't have cash with me and I'm really hungry I would finance a cheeseburger.

[Disoblige]

Technically, most of us are financing food. For a month @ 0%.

Credit card, newbs.

[killramos]

Originally posted by Disoblige
Technically, most of us are financing food. For a month @ 0%.

You shouldn't buy food you can't afford!

[RealJimmyJames]

So currently 60% of poll respondents finance for 4 or more years.

[lilmira]

The moment you touch a cheeseburger it depreciates. Buy used cheeseburger instead.

[Xtrema]

Depends on how well does it hold value over time.

Lose 50% over 4 year? Find a cheap lease with high residual.

Price holds over time? Cash.

[mazdavirgin]

:dunno: If you are pulling money from your TFSA to buy a car you are doing it wrong... If you have 30k kicking around not locked up in either RRSP/TFSA I have no clue wtf you are doing financially. Either you are making so much you are above the contribution limit or you seem to have trouble grasping the concept of investment and compound interest.

[Strider]

Definitely depends on interest rates, but quite often you forego a cash discount by taking a 0% or 0.9% finance, so it's really not free in the end.

Speaking of cars as investments - yes, 99.9% of the time they're not, but lately there seems to be more used car appreciation bubbles ranging from air-cooled Porsches and limited edition Porsches "the more letters it has the more it appreciates", to E46m3s, GT-Rs, S2ks


Originally posted by Xtrema
Lose 50% over 4 year? Find a cheap lease with high residual.
These are the ones to buy used.


Originally posted by mazdavirgin
If you have 30k kicking around not locked up in either RRSP/TFSA I have no clue wtf you are doing financially. Either you are making so much you are above the contribution limit or you seem to have trouble grasping the concept of investment and compound interest.
Doesn't take that much to max out RRSP and TFSA, then $30k could be a bonus or other lump sum, or accumulated savings kept liquid for the anticipated car purchase.

[max_boost]

Originally posted by ercchry








*heloc is basically the only reasonable form of financing a used vehicle since dealers don't subsidize the rates, and banks want too much for unsecured loans I thought heloc meant you can't afford it :nut:

[max_boost]

Originally posted by Strider
Definitely depends on interest rates, but quite often you forego a cash discount by taking a 0% or 0.9% finance, so it's really not free in the end.

Speaking of cars as investments - yes, 99.9% of the time they're not, but lately there seems to be more used car appreciation bubbles ranging from air-cooled Porsches and limited edition Porsches "the more letters it has the more it appreciates", to E46m3s, GT-Rs, S2ks


These are the ones to buy used.


Doesn't take that much to max out RRSP and TFSA, then $30k could be a bonus or other lump sum, or accumulated savings kept liquid for the anticipated car purchase. E30M3 :eek: :nut: :dunno:

[mazdavirgin]

Originally posted by Strider
Doesn't take that much to max out RRSP and TFSA, then $30k could be a bonus or other lump sum, or accumulated savings kept liquid for the anticipated car purchase.

Must be pretty ballin because by my math if you're maxing both those out that's ~31,000 after tax contributed to your TFSA/RRSP per person. :dunno:

[Disoblige]

Originally posted by Strider

Doesn't take that much to max out RRSP and TFSA, then $30k could be a bonus or other lump sum, or accumulated savings kept liquid for the anticipated car purchase.
Even then, why not put it in High Interest savings account? You'll be gaining more than $0.17 a month.

[Strider]

Originally posted by max_boost
E30M3 :eek: :nut: :dunno:
:eek: Gotta find out what the next bubble car is gonna be.


Originally posted by mazdavirgin
Must be pretty ballin because by my math if you're maxing both those out that's ~31,000 after tax contributed to your TFSA/RRSP per person. :dunno:
I could swear there was a poll on here where everybody maxes out everything :rofl:

In either case, one common strategy is max-RRSP, tax refund into TFSA.


Originally posted by Disoblige
Even then, why not put it in High Interest savings account? You'll be gaining more than $0.17 a month.
Not even sure how this hypothetical came about, but I don't see why one couldn't/wouldn't do that.

[ercchry]

Originally posted by mazdavirgin


Must be pretty ballin because by my math if you're maxing both those out that's ~31,000 after tax contributed to your TFSA/RRSP per person. :dunno:

You make it sound like it's an annual amount :nut:

[mazdavirgin]

Originally posted by ercchry


You make it sound like it's an annual amount :nut:

That's the annual max(income indexed) for 2015 for RRSP and TFSA... Next year it will be even higher. I'm at a loss as to how people are running out of contribution space... I guess everyone is making 140k per person or something.



Year Contribution limit
2013 $23,820
2014 $24,270
2015 $24,930
2016 $25,370

[heavyD]

Originally posted by Darkane
Historically 3 years have the best dealer rates.

My last big time purchase was 8 years financed, got an additional couple bucks off the car and a free cover. Your haggling has much better punching power if you're 8 years up front - tell them this is the reason you want max loan time.

Immediately move that loan to Heloc much lower interest and power pay.

Never more than 3 years total.

Yeah three years is what I typically go for as I like no interest loans.

[rx7_turbo2]

Originally posted by FixedGear
you must either be the wolf of wallstreet or investing in a different market than I. "modest return" :rofl: This is a terrible time to be saving. My Roth IRA hasn't made any money since end of 2011 and my 401k (vanguard index fund) isn't making shit either. Actually the US market has been stable if not decreasing for over a year. If I took your advice, I'd have lost even more money than I have.

I guess that was a back handed compliment? I'll take it!

Even in markets like this there's areas to make money. Where? Fuck if I know, someone else gets paid to do that ;) For the record, none of my current fleet is financed, all vehicles were purchased outright, my point was that there are absolutely circumstances where financing a vehicle makes more sense than paying cash.

As for cars being investments, I bought a car about 4 years ago now, it's worth well over double what I paid, it was a complete fluke but it can happen.

[blitz]

Originally posted by 01RedDX

But the ST has that "fun factor" that makes it more appealing to keep for 6+ years.

Sucks to keep paying for a car you don't like, even at 0%, because you can't even sell until the depreciation is paid off.



Originally posted by AE92_TreunoSC
Problem with 5 years or over (0% or not) is the depreciation is so rapid that the loan becomes larger than the equity in the car.

I prefer 5 years or under with at least 20% down. But everyone has different situations.


There is zero difference between a down payment upfront and putting money on the loan before you sell. That is unless you run out and spend that money on shit you don't need :rofl:

In a 0% @ 72 or 84 month situation, you can even start factoring inflation into the math. If it's "0% or cash discount" than it's a different situation.

At the end of the day each situation is a math problem and you just need to workout what provides the lowest cost for your circumstance.

[Team_Mclaren]

Originally posted by ercchry


The point is that 0% financing is a trap and depreciation on a brand new car is the real killer financially vs paying cash/heloc* on a used vehicle


Read the title again, it's new vehicle purchase. I take that it means "NEW" vehicles only?!

All things equal (final price), why would one not take a sub-par rate of finance?

[ercchry]

Originally posted by Team_Mclaren


Read the title again, it's new vehicle purchase. I take that it means "NEW" vehicles only?!

All things equal (final price), why would one not take a sub-par rate of finance?

This was more in response to the "omg I r leet investorz, cash is lulz!!!"

Seriously... Beyond... Off topic... Etc, etc

[RY213]

I wonder how many of the people in this thread talking about cars being depreciating assets go out and drop $100's every weekend on drinking and eating out?

[HiTempguy1]

Originally posted by blitz
I did 72 months on the 15k (after trade in) for my Fiesta. I'd be stupid not too at 0%.

Wait... why would you put a downpayment on a car if it was financed at 0%? This is a perfect example of where that cash could earn you more money doing anything besides going towards the purchase price...

[Team_Mclaren]

Originally posted by HiTempguy1


Wait... why would you put a downpayment on a car if it was financed at 0%? This is a perfect example of where that cash could earn you more money doing anything besides going towards the purchase price...

because by trading in a car, he gets the GST credit which is 5%? If the dealer is giving you good money on a trade, why the fuck not?

sorry ercchry, i guess that wasn't supposed to be directed against you. You are right some posts are not even relevant to this thread.

[blitz]

Originally posted by HiTempguy1


Wait... why would you put a downpayment on a car if it was financed at 0%? This is a perfect example of where that cash could earn you more money doing anything besides going towards the purchase price...

15k was what was left after trade in, I had no urge to sell my old daily driver myself.

Now that I realize it, I've actually never put a downpayment on a vehicle. It's either cash or 100% finance; if you're not first, you're last!

[HiTempguy1]

Originally posted by Team_Mclaren


because by trading in a car, he gets the GST credit which is 5%? If the dealer is giving you good money on a trade, why the fuck not?


Because dealers do not give you "good money on a trade" ever :rofl: So lets go with a hypothetical that his car was $25k new, he traded in a car that he got $10k for, and financed the remaining $15k.

So that "saved him" $500 on gst, whoopdee doo. If he had sold the car privately (and if you sell a car privately for the price the dealer says they'll give you on trade, you don't have to worry about selling the car, buyers will be lining up), he could have invested the $10k @ 5% for the 5 year term and earned $2700. I guess you can remove the lost $500 gst "credit", so $2200.

Additionally, he would have got more money selling privately.


Originally posted by blitz


15k was what was left after trade in, I had no urge to sell my old daily driver myself.


I always forget how baller everyone on Beyond is "oh yea, fuck keeping a couple extra grand in my pocket, trading it in for thousands less is just so much more convenient" :rofl:

And then there is the electricity contract/scheming thread that entails poring over stats to maybe save $50 per month :rofl:

[flipstah]

Originally posted by RY213
I wonder how many of the people in this thread talking about cars being depreciating assets go out and drop $100's every weekend on drinking and eating out?

Thank God for asian genes. Cheap drunk ftw. Helps pay for them mods.

Sorry, bank.

[blitz]

Originally posted by HiTempguy1
I always forget how baller everyone on Beyond is "oh yea, fuck keeping a couple extra grand in my pocket, trading it in for thousands less is just so much more convenient" :rofl:

That's exactly how it went. I fucking hate selling cars. :poosie:

[killramos]

Yea its always a riot to spend months with a car gathering dust on kijiji and autotrader wasting your time getting a new lowball every day with a 16 year old test pilot every other just to eek out an extra 10% on a sale compared to what the dealer offered. Don't even get me started on the actual serious buyers and sending the car to every other shop in the city for "inspections".

Last time I traded in a car the dealer offered me 500 less than I thought was fair market on the private market. No brainer to sign one piece of paper and never see it or it's problems again :rofl:

Meanwhile the fit I sold privately for my parents was on and off the market for 4 months with people coming and going all the time just to end up with exactly the same offer as the dealer made for trade in.

Private sales only make sense when there is a big enough gap between what you think the car is worth and what the dealer offers you is big enough to justify the waste of time. Pretty simple.

[Sugarphreak]

..

[HiTempguy1]

Man, I really should be in sales apparently. If you guys ever think of trading in your current vehicles, please contact me. I'll pay a bit over trade-in value, and that'll be that. (I know this will never happen, because I've never met someone who will give exact values for the dealer trade-in value, because they are getting hosed lol).

[blitz]

Originally posted by HiTempguy1


Because dealers do not give you "good money on a trade" ever :rofl: So lets go with a hypothetical that his car was $25k new, he traded in a car that he got $10k for, and financed the remaining $15k.

So that "saved him" $500 on gst, whoopdee doo. If he had sold the car privately (and if you sell a car privately for the price the dealer says they'll give you on trade, you don't have to worry about selling the car, buyers will be lining up), he could have invested the $10k @ 5% for the 5 year term and earned $2700. I guess you can remove the lost $500 gst "credit", so $2200.



Oh, and this isn't how loans and investments work in this case.

That extra 10k doesn't sit in a bank account or GIC for 5 years and then get taken out all at one time. At 0% for 60 months, 1/60 of the amount gets taken out every month. If you could magically find a 5% annual return GIC, you'd have to stagger that 10k into multiple batches so it would still be available for ongoing payments.

[blitz]

I worked out the math, your $2700 in "profit" is actually $1350 at 5% annual interest. At a more realistic 2% its $520.

That $500 in GST savings doesn't look so bad now, does it :rofl:

[killramos]

Originally posted by HiTempguy1
Man, I really should be in sales apparently. If you guys ever think of trading in your current vehicles, please contact me. I'll pay a bit over trade-in value, and that'll be that. (I know this will never happen, because I've never met someone who will give exact values for the dealer trade-in value, because they are getting hosed lol).

I'll admit what I got on my last trade in:

Dealer gave me 13k trade in for my stripper 07 GTI with about 110k on the clock

5k overall depreciation for me after buying it CPO for 18k all in from a dealer 3 years previously and putting 40,000km on the clock.

No way I was getting much more than 500 bucks to 1k more than that private sale. Again , 5 minutes of paperwork and a signature to never see it again.

A 5 second kijiji search ( admittedly about 2 years later) seems to support my claim that it was a good deal

http://www.kijiji.ca/b-cars-trucks/calgary/2007-gti/convertible__coupe__hatchback__other+body+type__sedan__wagon/k0c174l1700199a138

Bloody thing had like 5-6k of warranty repairs while i owned it so i was glad to be rid of it. Fun car, but not very reliable and expensive to fix.

Perhaps I will take your offer next time around and let you hold my time bombs for a small cash uptick if you are going to beat the dealers offer by 500 bucks for an all cash 5 minute business deal? Oh yea and i get to keep driving the car until my new one is ready for pickup. :rofl:

Things just aren't black and white and you need to take every situation at face value. Sometimes it makes sense to buy used, sometime new. Sometimes it makes sense to finance, sometimes it doesn't. Sometimes it makes sense to trade in, some times it doesn't.

I didn't participate in the poll because i don't agree with any of the options, because it 100% depends on a million other factors rather than just slotting myself into a "36month" box or whatever.

[Aleks]

Originally posted by killramos


I'll admit what I got on my last trade in:

Dealer gave me 13k trade in for my stripper 07 GTI with about 110k on the clock

5k overall depreciation for me after buying it CPO for 18k all in from a dealer 3 years previously and putting 40,000km on the clock.

No way I was getting much more than 500 bucks to 1k more than that private sale. Again , 5 minutes of paperwork and a signature to never see it again.

A 5 second kijiji search ( admittedly about 2 years later) seems to support my claim that it was a good deal

http://www.kijiji.ca/b-cars-trucks/calgary/2007-gti/convertible__coupe__hatchback__other+body+type__sedan__wagon/k0c174l1700199a138

Bloody thing had like 5-6k of warranty repairs while i owned it so i was glad to be rid of it. Fun car, but not very reliable and expensive to fix.

Perhaps I will take your offer next time around and let you hold my time bombs for a small cash uptick if you are going to beat the dealers offer by 500 bucks for an all cash 5 minute business deal? Oh yea and i get to keep driving the car until my new one is ready for pickup. :rofl:

Things just aren't black and white and you need to take every situation at face value. Sometimes it makes sense to buy used, sometime new. Sometimes it makes sense to finance, sometimes it doesn't. Sometimes it makes sense to trade in, some times it doesn't.

I didn't participate in the poll because i don't agree with any of the options, because it 100% depends on a million other factors rather than just slotting myself into a "36month" box or whatever.

We have a few guys that work at dealerships there, so maybe they can chime in, but would a dealer/wholesaler ever take a trade in and only plan to make 500-1000 on it? I was under the impression they need at least a few thousand to make it worth while.

[Strider]

Originally posted by mazdavirgin
That's the annual max(income indexed) for 2015 for RRSP and TFSA... Next year it will be even higher. I'm at a loss as to how people are running out of contribution space... I guess everyone is making 140k per person or something.

You're also forgetting that the RRSP contribution limit is 18% of earned income up to a maximum of the #s you posted.

So a very simple calc for a basic Beyond 6 figure baller who's barely scraping by at exactly $100,000:

18% max contribution = $18k into RRSP, corresponding tax refund is $6,184 of which you roll $5,500 into TFSA and spend the remaining $684 on lunch for the week.

[ercchry]

Ah trade ins.... Let's see... First trade in I couldn't in good conscience sell it to any individual... It was a lemon from day one... Used a quart of oil for every tank of gas... Being a jeep instead of fixing it they put it on a "oil consumption test" for over 6 months, couldn't drive it out of town since every ounce of oil had to be documented at the same dealer... Traded it in for 20% less than what I paid for it new after two years of ownership... It ended up going to auction and being offered at the dealer I bought it from for $4k or so less than I got for it with no warranty.... My gst savings on my next car were much greater than $500 too

Next car... Tried selling it for a solid 8 months off and on, not a single bite... Traded it in for what I was willing to take for it privately and was a great bargaining chip for the next vehicle... Which I paid less for than my buddy who bought the same truck a year later with less options did

[Strider]

Question for all who got great value on their trade-ins - Did you manage to negotiate a price you were happy with on the new car before any mention of having a trade? or did you disclose the trade before getting to a bottom line on the new car?

[Team_Mclaren]

Originally posted by HiTempguy1


Because dealers do not give you "good money on a trade" ever :rofl: So lets go with a hypothetical that his car was $25k new, he traded in a car that he got $10k for, and financed the remaining $15k.


Additionally, he would have got more money selling privately.

:

You must suck at negotiating your trade then. Its not hard to put a dealer together to pay fair value on a trade.

[HiTempguy1]

Originally posted by killramos


Things just aren't black and white and you need to take every situation at face value. Sometimes it makes sense to buy used, sometime new. Sometimes it makes sense to finance, sometimes it doesn't. Sometimes it makes sense to trade in, some times it doesn't.

I didn't participate in the poll because i don't agree with any of the options, because it 100% depends on a million other factors rather than just slotting myself into a "36month" box or whatever.

I understand that, but what Blitz did makes zero sense. I'm not talking about other situations (the point of you are losing money if trading in is valid though, there is no getting around it). Putting your car up on autotrader and calling it a day isn't "selling" a car lol.

I would imagine a trend that could be seen with a lot of beyonders are "oddball" cars that are niche. Your GTI being a perfect example, they sold 15k Golfs in 2007, versus 1500 GTI's in Canada. Arguably, you are selling car with a 10th of the possible purchasers, so you will have to work that much harder to sell it.

Anyways, the point still stands that you guys lose typically thousands trading in. You can't argue around that, dealers aren't going to lose money on a trade-in, that is an awful business model :dunno:

[rx7_turbo2]

Originally posted by HiTempguy1
Because dealers do not give you "good money on a trade" ever :rofl:
Not true. Not even remotely true.


Originally posted by killramos
Things just aren't black and white and you need to take every situation at face value. Sometimes it makes sense to buy used, sometime new. Sometimes it makes sense to finance, sometimes it doesn't. Sometimes it makes sense to trade in, some times it doesn't.

This :clap:

[flipstah]

Whatever 'loss' in trading it in is offset by not having to deal with fuckbois lowballing you to kingdom come.

Just depends on how you value your time and effort.

Every action has a reaction.