Topic: Feature: The most reliable cars that depreciate the least

[wing]

Or instead of being a hard a$$.  Take the loan the extra few hundred off the price and just pay it off instantly.

Sent from my Galaxy Nexus

[HeliDriver]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

[Black Hatch]

<div style="text-align:left">

Which are the most reliable vehicles with the best resale values?  We cross-referenced some recent surveys to find out.

<a href=http://www.autos.ca/auto-articles/feature-the-most-reliable-cars-that-depreciate-the-least>Read More...</a></div>

Being a second hand car owner I'm much more interested in most-reliable-cars-that-depreciate-the-fastest.

+1000
I'd love a 2-3 yr old reliable car that has already lost 40% of its value.

Same here.
I would love to see an article for reliable cars that depreciate quickest so that they may good bargain buys.

I think maybe the 2010ish? Ford Fusion could probably fit in that category.

[PJ]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

Yes true.  I used to sell cars.  It cost money to borrow money either for us or for the dealer.  If you take the zero percent then the dealer makes less on the sale.  Offer cash and if you don't get a better deal then walk.

Kia even show the difference on the web site.  The "cash price" for a 2012 Soul is $3500 less then the financed price with zero percent.

 
http://www.kia.ca/pages/pricing/pricekia-step4.aspx?model=soul

[Danno001]

Being a second hand car owner I'm much more interested in most-reliable-cars-that-depreciate-the-fastest.

+1000
I'd love a 2-3 yr old reliable car that has already lost 40% of its value.

Agreed. Just picked up a 2010 Mazda 3 GS advertised on Kijiji for $13,600+hst, 36,000 kms with b to b warranty still on it. Driven by a school teacher, original owner (no kidding). List was $23,600+tax in 2010. 

[safristi]

"school teacher" prolly means the STRIKES gonna be a long one........... ...Danno did ya BUY it for THE CHILDREN................. ..drive as ya STOLE IT............

[nlm]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

Yes true.  I used to sell cars.  It cost money to borrow money either for us or for the dealer.  If you take the zero percent then the dealer makes less on the sale.  Offer cash and if you don't get a better deal then walk.

Kia even show the difference on the web site.  The "cash price" for a 2012 Soul is $3500 less then the financed price with zero percent.
 
http://www.kia.ca/pages/pricing/pricekia-step4.aspx?model=soul

Yeah the shell game sucks and is misleading for those that don't know. Ever notice how Ford's "Employee Pricing" came with substantially higher finance rates? But, if you are able to secure a better finance rate elsewhere and get the lower cash price you would be further a head.

The thing with buying a car outright is lost opportunity cost on a depreciating asset. If you have the full cash amount rather than dumping the principle into a car that loses 10-15+% per year, you're be better off investing the majority of the cash and making the monthly payments, even if the finance rate (e.g. 8% (god forbid if you took that rate) is higher than your return on investment (e.g. 5%). As long as your investment does not lose more than your car depreciates (e.g.-15%) you will have more money at the end of the finance term than if you bought out-right. This is one of the advantages to leasing; a lot your cash isn't locked into a deprecriating asset.

[safristi]

That's why I only buy SOLID GOLD CARS......................


...N.B NOT SOLD TO MINERS ...

[SaskSpecV]

The thing with buying a car outright is lost opportunity cost on a depreciating asset. If you have the full cash amount rather than dumping the principle into a car that loses 10-15+% per year, you're be better off investing the majority of the cash and making the monthly payments, even if the finance rate (e.g. 8% (god forbid if you took that rate) is higher than your return on investment (e.g. 5%). As long as your investment does not lose more than your car depreciates (e.g.-15%) you will have more money at the end of the finance term than if you bought out-right. This is one of the advantages to leasing; a lot your cash isn't locked into a deprecriating asset.

No question that a car is a depreciating asset, but even if you take the financing option there is still "lost opportunity cost" - the lost opportunity of using your monthly payments for other purposes (such as investing).  And if you invested the entire purchase price of the car, but then use that investment to cover your payments, you are bleeding the investment fund monthly and the returns are likely to be minimal.  Also remember that your investment income is fully taxable (other than TFSA, but only limited room available there), so even assuming 6% returns (which would be fanstastic right now), the real return would only be about 4%.  Some MNFRs have big cash purchase incentives, some don't - but I think it's always worth at least looking into it.

Buying a vehicle is not a good financial decision no matter how you slice it - some vehicles are just less of a "bad" financial decision than others.  But it's the same with any depreciating asset (or experiences) - electronics, vacations, restaurant meals, etc - you gotta pay to play.

[nlm]

No question that a car is a depreciating asset, but even if you take the financing option there is still "lost opportunity cost" - the lost opportunity of using your monthly payments for other purposes (such as investing). 

Agreed. The point I was trying to make was that the "loss" can be lessened by taking the financing option and investing the principle than paying outright. Financing less ROI we will say is negative 3-5%. Buying outright is depceciation say negative 10-15%. I'd rather lose 5% than 10%.

Leasing isn't a bad option either compared to buying outright. Although your monthly loss might be more than financing %-wise, because the payment is lower the absolute loss might be lower. It all depends on the lease rate. There is also the advantage of comparing the residual with market value when the lease is up and you can walk away if the valuation is high or take it if it is low.

[Northernridge]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

Yes true.  I used to sell cars.  It cost money to borrow money either for us or for the dealer.  If you take the zero percent then the dealer makes less on the sale.  Offer cash and if you don't get a better deal then walk.

Kia even show the difference on the web site.  The "cash price" for a 2012 Soul is $3500 less then the financed price with zero percent.
 
http://www.kia.ca/pages/pricing/pricekia-step4.aspx?model=soul

Yeah the shell game sucks and is misleading for those that don't know. Ever notice how Ford's "Employee Pricing" came with substantially higher finance rates? But, if you are able to secure a better finance rate elsewhere and get the lower cash price you would be further a head.

The thing with buying a car outright is lost opportunity cost on a depreciating asset. If you have the full cash amount rather than dumping the principle into a car that loses 10-15+% per year, you're be better off investing the majority of the cash and making the monthly payments, even if the finance rate (e.g. 8% (god forbid if you took that rate) is higher than your return on investment (e.g. 5%). As long as your investment does not lose more than your car depreciates (e.g.-15%) you will have more money at the end of the finance term than if you bought out-right. This is one of the advantages to leasing; a lot your cash isn't locked into a deprecriating asset.

Good example.

[HeliDriver]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

Yes true.  I used to sell cars.  It cost money to borrow money either for us or for the dealer.  If you take the zero percent then the dealer makes less on the sale.  Offer cash and if you don't get a better deal then walk.

Kia even show the difference on the web site.  The "cash price" for a 2012 Soul is $3500 less then the financed price with zero percent.

 
http://www.kia.ca/pages/pricing/pricekia-step4.aspx?model=soul

You said always in the quote. That's the part that's not true.

Sure, Kia and many others do it that way (the either/or pricing), but sometimes 0% really is just 0%.

[dkaz]

Toyota posts an effective interest rate in their pricing utility if there's a cash discount available. Say if you get 0.9% but they offer $2000 off on cash purchase, the effective APR may be 4.3% or something.

[pi314]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

Yes true.  I used to sell cars.  It cost money to borrow money either for us or for the dealer.  If you take the zero percent then the dealer makes less on the sale.  Offer cash and if you don't get a better deal then walk.

Kia even show the difference on the web site.  The "cash price" for a 2012 Soul is $3500 less then the financed price with zero percent.

You said always in the quote. That's the part that's not true.

Sure, Kia and many others do it that way (the either/or pricing), but sometimes 0% really is just 0%.

When the Rondo was bought in 2008, the offer was 0% - with no cash incentive to do otherwise. Not financing is losing the interest one could get either through investments or simply locking it in a bank

[dirtyjeffer]

When the Rondo was bought in 2008, the offer was 0% - with no cash incentive to do otherwise. Not financing is losing the interest one could get either through investments or simply locking it in a bank

the same thing happened when our parents bought their 2009 Jetta TDi wagon.

[ArticSteve]

Lets just clear the air here.     Notwithstanding cash incentives from the Distributor, aka the "Company", new car dealers care not if the vehicle hits the curb financed, cash sale or lease, although financed vehicles do up the gross slightly.  To the customer, price/monthly payment is the driver. To the dealer its volume.  These two drivers bring the customer and dealer together. The dealer discounts to reach certain volumes.  There is no special discount for "cash".  Whether the reimbursement comes from the bank, captive, lessor, or the customer's wallet, its all the same to the dealer.  That being one more unit on the board.

As far as ppl that pay with cash not originating from HELOCs; well they simply have money regardless how they acquired it; worked/saved it, got it from grandma, fell from the sky, it just usually means that they have more liquidity than the payment customer.  PPl who claim that it's better to take low financing and then "invest" the principal are kidding themselves.  I think it's more the case that ppl like to see $25K in their "savings account" and owe on the vehicle rather than not have that $25K "there" but own the vehicle outright.  I refer you to Freud on that. 

Why walk around for 5 years saving money to pay cash for a car?  That's gonna add up to some serious shoe $$$.  For those that qualify for captive financing, 5 year new car loans @ 2.9 and lower are the way to go providing you buy a Corolla.   

   

[PJ]

Even zero percent financing is not zero.  There are always fees and you can normally get a better price if you don't take the zero financing.

Not true.

Yes true.  I used to sell cars.  It cost money to borrow money either for us or for the dealer.  If you take the zero percent then the dealer makes less on the sale.  Offer cash and if you don't get a better deal then walk.

Kia even show the difference on the web site.  The "cash price" for a 2012 Soul is $3500 less then the financed price with zero percent.

 
http://www.kia.ca/pages/pricing/pricekia-step4.aspx?model=soul

You said always in the quote. That's the part that's not true.

Sure, Kia and many others do it that way (the either/or pricing), but sometimes 0% really is just 0%.

I said there are always FEES and you can NORMALLY get a better price.  You even quoted my quote and still miss read it.

[Vanstar]

Being a second hand car owner I'm much more interested in most-reliable-cars-that-depreciate-the-fastest.

+1000
I'd love a 2-3 yr old reliable car that has already lost 40% of its value.

Agreed. Just picked up a 2010 Mazda 3 GS advertised on Kijiji for $13,600+hst, 36,000 kms with b to b warranty still on it. Driven by a school teacher, original owner (no kidding). List was $23,600+tax in 2010.

You are a very intelligent man; I have been buying low km, two year old cars for most of my life. You saved yourself $10,000, which would have taken at least $13,000 to replace. You can take that $10,000 and put it on your RRSP. This saving, with compound interest, means you will be able to retire at least a year earlier.

Or you can pay down your mortgage. The choice as yours as you now have financial freedom!

[dirtyjeffer]

You are a very intelligent man; I have been buying low km, two year old cars for most of my life. You saved yourself $10,000, which would have taken at least $13,000 to replace. You can take that $10,000 and put it on your RRSP. This saving, with compound interest, means you will be able to retire at least a year earlier.

Or you can pay down your mortgage. The choice as yours as you now have financial freedom!

it isn't so cut and dry.

he didn't say how he paid his $13k to buy the car...was it a car loan, was it money saved up over the last 5 years??...there are many variables that could come into play which could change things quite a bit...i contemplated a used car before getting my Rio5, but in the end, i bought new with an extended warranty so i have a fixed budget payment and warranty to carry me until it is time to buy another car (likely 10 years).

[Danno001]

Being a second hand car owner I'm much more interested in most-reliable-cars-that-depreciate-the-fastest.

+1000
I'd love a 2-3 yr old reliable car that has already lost 40% of its value.

Agreed. Just picked up a 2010 Mazda 3 GS advertised on Kijiji for $13,600+hst, 36,000 kms with b to b warranty still on it. Driven by a school teacher, original owner (no kidding). List was $23,600+tax in 2010.

You are a very intelligent man; I have been buying low km, two year old cars for most of my life. You saved yourself $10,000, which would have taken at least $13,000 to replace. You can take that $10,000 and put it on your RRSP. This saving, with compound interest, means you will be able to retire at least a year earlier.

Mortgage has been paid for decades ago. RRSP is maxed every year. This car is being driven by my 17 year old son. He paid for most of it with his WM job, helped him out with some cash. Tried to find the best deal possible for him and get an awesome car at the same time. I offered him my 2013 Sonata as a driver but he refused. Smart lad.