Car Market Crash Deal MEGATHREAD

[SJW]

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I'll raise you a 2016 Highlander Limited for very special price of $48,500

Dammit.

[DonJuan]

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What did you think the endgame of our centrally managed economy was going to be?

Liberté, égalité, fraternité and CL wheels for all.

[Twin_Cam_Turbo]

My dad managed to order a car at MSRP. I’m honestly surprised I haven’t heard him griping about this being the only new car he’s had to pay MSRP for.

[ercchry]

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Cmhc is anokaybdeal. For the borrower. Not sure it's a good deal for the taxpayer.

Well, so far they’re pretty good at not losing money… also the more buyers you can bring into the market, the more transactions, the more taxes collected on those transactions. So net win

And if it does all go south: recourse for the losses (where as in this province there would otherwise be no recourse) and those losses are now also split with the lenders

[Buster]

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losses are now also split with the lenders

Can you elaborate on this?

[msommers]

We had a mortgage broker try to convince us it was better to go with CMHC to pay a lower interest rate. When I mentioned we would be paying less interest overall by providing 20% down, their response was "well I was just suggesting it as an option, it's lower monthly payments."

I suspect that trick worked on a lot of people.

[DonJuan]

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We had a mortgage broker try to convince us it was better to go with CMHC to pay a lower interest rate. When I mentioned we would be paying less interest overall by providing 20% down, their response was "well I was just suggesting it as an option, it's lower monthly payments."

I suspect that trick worked on a lot of people.

"With the lower monthly payments we can afford that 60 month loan on a new Ram!"

[brucebanner]

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My dad managed to order a car at MSRP. I’m honestly surprised I haven’t heard him griping about this being the only new car he’s had to pay MSRP for.

What did he order?

[bjstare]

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We had a mortgage broker try to convince us it was better to go with CMHC to pay a lower interest rate. When I mentioned we would be paying less interest overall by providing 20% down, their response was "well I was just suggesting it as an option, it's lower monthly payments."

I suspect that trick worked on a lot of people.

Most mortgage brokers are a (tiny) step above used car salesmen. Change my mind.

[Xtrema]

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We had a mortgage broker try to convince us it was better to go with CMHC to pay a lower interest rate. When I mentioned we would be paying less interest overall by providing 20% down, their response was "well I was just suggesting it as an option, it's lower monthly payments."

I suspect that trick worked on a lot of people.

Saw a sample calculation on that 40 years mortgage. Monthly payment is down $100/mth but overall interest cost is up $175K.

Also the south continues to fuck US up in more way than just shitty politics. While overall employment stats looks good, job losses are accelerating in southern states with debt to income raising rapidly with household debt exceed 2008 crisis. Sounds like another powder keg is about the blow.

Back on topic,



Lenders pulling out of auto loans, will this cause a crash we are looking for?


Also
https://www.bnnbloomberg.ca/us-bank-...arch-1.1905585

Commercial bank lending dropped nearly $105 billion in the two weeks ended March 29, the most in Federal Reserve data back to 1973. The more than $45 billion decrease in the latest week was primarily due to a a drop in loans by small banks.

[Buster]

There is too much spare capacity in the auto manufacturing sector to have the demand and supply imbalance remain perpetually. Once the slack is taken out of the system, it will get back to normal.

[94boosted]

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My dad managed to order a car at MSRP. I’m honestly surprised I haven’t heard him griping about this being the only new car he’s had to pay MSRP for.

If it's the car I think it is, they were selling it at MSRP but they were inflating the Freight & PDI from $3K to $3.5K and they wouldn't budge on their $500 Anti Theft 3yr program, so it's basically MSRP + $1K.

[Twin_Cam_Turbo]

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If it's the car I think it is, they were selling it at MSRP but they were inflating the Freight & PDI from $3K to $3.5K and they wouldn't budge on their $500 Anti Theft 3yr program, so it's basically MSRP + $1K.

Yes that car, it was MSRP plus the $595 dealer fee BMW Canada “suggests” as far as I know. Originally they wanted $2500 over msrp with a bunch of forced bullshit back in October when he put the deposit down.

[ercchry]

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Can you elaborate on this?

Not really my space… it was proposed back when the b20 stuff came down, last I heard it was finally happening. Here is the proposal; not sure how many times it was revised since 2017:

https://www.canada.ca/content/dam/fi...rs-prp-eng.pdf

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We had a mortgage broker try to convince us it was better to go with CMHC to pay a lower interest rate. When I mentioned we would be paying less interest overall by providing 20% down, their response was "well I was just suggesting it as an option, it's lower monthly payments."

I suspect that trick worked on a lot of people.

It’s not really a trick, but it does sound like someone smarter than him just told him that. There is a few variables you need to factor in but the basics are:

Capital cost of your additional down payment
Delta between insured rates and conventional at time of contract start
Expected delta at renewal of term, and which bracket your expected LTV will be in (you’re not on par with high ratio rates till you’re under 65% LTV)
Expectation of retaining insurance (ie. not refinancing the loan)
Use of prepayment privileges
Additional monthly cashflow, if added to investments

[msommers]

Valid points but also present a lot of 'what if's' that only Misterman (the Nostradamus himself) can predict.

[ercchry]

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Valid points but also present a lot of 'what if's' that only Misterman (the Nostradamus himself) can predict.

Well there is some constants… high ratio rates will always be the lowest as that insurance is customer paid, conventional (insurable aka bulk insured and securitized loans) will not have even rates till equity in the property is substantial. There will be a cost to capital as long as we have functioning markets.

I’ve ran a few scenarios back with we first started seeing tiered rates and for the most part the break even point was at the first 5yr renewal. Insurance follows your loan for the entire life of it, if you stay with your lender or not as long as you don’t refinance

Also the whole thing doesn’t even need that much of a look if you put down a huge down payment then turn around and finance a car at a way higher rate cause you spent all your savings

Nor the opposite… where you actually shrink up your amortization to be inline with the additional down payment (ie. 20% down with 15yr am vs 5% at 25yr is no contest in total interest paid even with a wide delta)

[pheoxs]

CMHC isn't that bad of deal over the lifetime because you save ~0.25% or so for the lifetime of your mortgage. If you're going to full 25 years it may actually come out cheaper (interest wise) to do 15% down CMHC rather than 20% down.

But it's rather negligible so not worth arguing to go one way or another. If you do intend to do accelerated payments then the small savings on the rate diminishes each pre-payment so you'd still be further ahead to snowball a large downpayment and then just hammer down the principal anyways.

[FraserB]

Anyone have an idea what’s going on with trucks right now?

Seeing a ton of 2500HD and 3500HD GMCs and Fords being advertised. All under 75,000km or so, 2020/2021 MY and they look like fleet spec (no bedliner and SLE/XLT trim) but no damage from field use. Did someone big go out of business or are these just leases coming back for 2023s?

The prices aren’t super terrible I think compared to new

[vengie]

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Anyone have an idea what’s going on with trucks right now?

Seeing a ton of 2500HD and 3500HD GMCs and Fords being advertised. All under 75,000km or so, 2020/2021 MY and they look like fleet spec (no bedliner and SLE/XLT trim) but no damage from field use. Did someone big go out of business or are these just leases coming back for 2023s?

The prices aren’t super terrible I think compared to new

Link by chance?
In the market for a couple

[FraserB]

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Link by chance?
In the market for a couple

Everyone seems to have them. Shaw/CMP have a ton of both makes, same with Universal. Ballpark is like $60k, cheaper than new by a good margin