Topic: 0% 36 months -- why not??

[Cudworthhab]

Vehicles are a very poor investment, if you have real cash & can get 0% great if not the investment gets even worse .Most of the people will never keep the car long enough to pay for it. I don't feel using a line of credit is paying cash. The people who who use a line of credit &  think it is their cash they are part of todays problems

[articsteve]

Due to the technical complexities of todays cars and service rates (tax in) averaging $100. per hour, financing over 5 years for CERTAIN type of vehicles, for long term owners, who have credit, is a much better "business" decision than buying used with cash.

For example     2009 Corolla, AC, auto, p locks,  depending on bargaining skill, about $340 per month/5 years tax in (ON).  List is $353.

Trick is to keep to the base model with AC.  Auto optional of course.

For women, who are usually victimized the most by the auto repair world, this is the way forward.  Screw the used.








 

[johngenx]

I agree that buying a new $20K car is often a better choice than buying a $20K used car.  However, if you are stuck on a certain model, it can much less expensive to buy used, regardless of used car operating costs.  This is NOT true of entry level cars unless you're willing to go really old, but for upper-scale models, it makes a ton of sense.  We bought our 09 Corolla new because a three year old Corolla is just not a good buy.  You have to go to 5-7 year old versions to see any significant price drop, and we didn't want one that old.  Personal preference, and it cost us some dough.  But...

To purchase our Forester new would have been about $35K, and we bought a three year old one for $16K.  That savings of $19,000 will NEVER be eaten up by additional repair/service costs.  Never.  Even at "Alberta Advantage" labour rates of $140/hr and buying expensive Subaru OE parts (makes our past Mercedes and BMW parts prices seem downright cheap), that cost of initial depreciation is so high, it could only be eclipsed if you rebuilt the entire drive-line several times.

But, when you buy a $15-20K used car, you have to have the cash flow to be able to spend a bit more on service and repairs.  If your MAX budget is $18K and that would leave you super-tight for repairs, then look for an inexpensive new car.  There are awesome, reliable, choices now for $15K or less.  The local Mazda dealer is advertising a 2009 Mazda3 with AT/AC for $16K including PDI/etc plus GST.  That's CHEAP for a new car!  We paid $18K for a 1990 Acura Integra in the fall of 1989, and wasn't close to the car that the 3 is.  Wow.  20 years later and you spend FAR LESS in real dollars for WAY MORE car.

So, it depends on what you want.  If you have your heart set on a Subaru Legacy, they don't hold their resale value very well (overpriced to start?) and you'll save $20K by hitting the used market for a 3-4 year old lease return.  I see 06 GT models for well under $20K now, way off the nearly $40K tax-in prices from just three years ago.  The warranty will run out soon, but they're well made cars and you can expect years and years of reliable service.  Yes, it will cost more to operate than a new Civic/Corolla/Elantra/Fiesta/Sentra, but it's a different kind of car.

As for buying an entry level car, if you go for a Corolla and you think you might sell it someday, opt for an automatic.  An AC/AT equipped car is 100X easier to sell.  You can gripe all you like about fun-to-drive, but the reality is that a Corolla is a commuter car that spends a lot of time in heavy traffic, and an AT is preferable for the majority of people looking for that sort of car.

[airbalancer]

 "Alberta Advantage" labour rates of $140/hr    Really
My BMW Indy dealer is 85, and guy I take my truck to is 65

When I buy a car/truck I never consider re sale value. If I get anything when I sell it is bonus
You never can tell what the value will be in future years
Up until the past couple of years pick up trucks had great resale value now they used one are a good deal

[mar1990]

That was us. First family car lasted 14 years...sold it for $50; 2nd was in service for 13 years....so lots of time to save for the next one. But this current family car will be gone after only 9 years as we can no longer justify repairing it over and over.

You are not alone.  We are in the same boat. Except the 1st family car was 14 years old when we got it.  Get the occasional complaint from the Mrs.  but for the most part she's alright with it.

[initial_D]

I know a number of people who pay cash for new Corollas, my dad was one of them. Having debt (espcially a $600+ montly payment) doen't sit well with some people, regardless of the interest points.

I rather pay cash than make payments at 0% interest, if I actually have cash to play with.

[toolatecrew]

I know a number of people who pay cash for new Corollas, my dad was one of them. Having debt (espcially a $600+ montly payment) doen't sit well with some people, regardless of the interest points.

I rather pay cash than make payments at 0% interest, if I actually have cash to play with.

I know some people who pay cash to. My father did. BUT just becuase we know SOME people doesn't mean the majority or even many are capable of writing a check for 30,000 from their cash reserves for a car. By far the majority of people don't have 20 or 30 K in cash just sitting around.

[tpl]

I know a number of people who pay cash for new Corollas, my dad was one of them. Having debt (especially a $600+ monthly payment) doen't sit well with some people, regardless of the interest points.

I rather pay cash than make payments at 0% interest, if I actually have cash to play with.

I know some people who pay cash to. My father did. BUT just because we know SOME people doesn't mean the majority or even many are capable of writing a check for 30,000 from their cash reserves for a car. By far the majority of people don't have 20 or 30 K in cash just sitting around.

I had never paid cash while I had a salary, only when I retired, had no "income" and did not want to pay interest.  My only argument was with the length of car loans.

[airbalancer]

Nissan has 0% for 60 month, and Honda has 0.9 for 60 month
Local dealer sales are pretty good
They have had about 35 Civic come in the past week and have not time to get them PDI

[johngenx]

I think it's a very small percentage of people that pay cash in full for a new car.

[WpgMonty]

On average we've kept our last 5 vehicles longer than 10 years (our 96 Voyager was the shortest term at 11 years) and paid for them all in 3 1/2 years or less.

It makes sense to me to buy a less expensive vehicle (the Voyager was a year old and had taken a huge hit on depreciation) and pay it off quickly. If you pay off a car in three years but keep it for a minmum of ten years, you're not only ahead in the car payments you're NOT making, but you're also earning interest on the money that you have saved.

When we purchased the Focus, we could have actually paid for it in cash, as we have been setting aside a "car payment" each month since we stopped making actual car payments. But I got such a good deal on the car, and on the financing terms, that we borrowed the money. We'll keep the car for at least another four or five years, and when it's time to replace one of our vehicles, be it the truck or the car, we'll have saved enough to purchase a much more upscale car. And even though I would relish the opportunity to walk into a MB or BMW dealer and purchase something  with cash, I'm afraid that I'm now too cheap to do so, and we will end up purchasing something small and inexpensive, because it's all we're going to need at the time.

I think far too many people bought large expensive cars and SUVs that they didn't really need, with money they didn't really have, to "keep up" with friends and neighbours. Thrift is a trait that has sadly become passe in the last few decades. Personally, I enjoy my virtually debt free existence; it allows us some measure of freedom and a position of strength when negotiating for a car.

[airbalancer]

And even though I would relish the opportunity to walk into a MB or BMW dealer and purchase something  with cash, I'm afraid that I'm now too cheap to do so, and we will end up purchasing something small and inexpensive, because it's all we're going to need at the time.

With a statement like that you should change" just this side of grumpy old man" to you are a grumpy old man 

[Winklovic]

Thrift is a trait that has sadly become passe in the last few decades.

Certainly not in Winnipeg.   

[initial_D]

I know a number of people who pay cash for new Corollas, my dad was one of them. Having debt (espcially a $600+ montly payment) doen't sit well with some people, regardless of the interest points.

I rather pay cash than make payments at 0% interest, if I actually have cash to play with.

I know some people who pay cash to. My father did. BUT just because we know SOME people doesn't mean the majority or even many are capable of writing a check for 30,000 from their cash reserves for a car. By far the majority of people don't have 20 or 30 K in cash just sitting around.

Think that is what I said. I only know a number (low number, between 10~20) of people paid cash for their vehicle purchase. The main point on my previous post was related to the topic, a reason for some people who have the actual cash to buy a car outright, and they would do so, for the purpose of not having a debt, a couple of interest points on $20K doesn't matter to them.

I had my Mazda Millenia and BMW 325ix for almost seven years now, bought then both used, with a detailed maintenance and repair record, private sale, no GST (in AB), total original purchase was under $25,000 for both of them. The Mazda was trouble free, only did the brakes, 2 timing belts changes, and a radiator hose. I spend some money on modding the 325ix, it is relative trouble free otherwise. Got my money out of those two cars for sure.

[dr_spock]

I'm in that minority group that pays cold hard cash for new and used car just to avoid debt.  There's nothing wrong with borrowing if you're comfortable with that and the costs associated with it.

[safristi]

...always use OPP........ ..... Other Peoples Paychecks..................err "Money" or whateffer THEY are calling IT these DAZE...........

[RunsinLight]

I prefer to use cash as well. One benefit of staying at home longer and not going away to college. I never got caught up in mounds of debt.

I'm in that minority group that pays cold hard cash for new and used car just to avoid debt.  There's nothing wrong with borrowing if you're comfortable with that and the costs associated with it.

[toolatecrew]

I prefer to use cash as well. One benefit of staying at home longer and not going away to college. I never got caught up in mounds of debt.

I'm in that minority group that pays cold hard cash for new and used car just to avoid debt.  There's nothing wrong with borrowing if you're comfortable with that and the costs associated with it.

I prefer to use cash too. Its just with a mortgage  2 kids and a single income the ability to save up 10 or 20 K to pay cash for even a used car is nigh impossible

[dr_spock]

I prefer to use cash too. Its just with a mortgage  2 kids and a single income the ability to save up 10 or 20 K to pay cash for even a used car is nigh impossible

I know what you mean.  I'm in the same boat--2 kids, mortgage, trying to manage on a single income.  Hopefully we won't have to buy another car in the next little while.  Or at least until the mortgage is paid off in a few more years.  I can almost see that debt freedom day soon.   

[Cudworthhab]

We had  van payments on our 2001 Venture when we were in our 30's now 44 . when we payed off the van in 4 years we kept putting the  $757 payment away. It takes alot of disipline to do this as my wife keeps wanting to take this money to travel with. I figure if I can keep putting this payment away I should be able to pay for a car with cash the next time as long as I can keep this 2001 Venture for 3 more years . I just hate the Venture that is the problem & every time I go to this site I want a different car.