I'm a car salesmen, Go ahead and ask me anything

[TimSJ]

In Ontario when you buy a car you have to have a provincal inspection done.. This is alos reffered to as certified.

E-Tested: In ontario all cars must pass an emission test. so if a car has passed this it is refered to as e-tested.

hope this helps

[OilersBaby]

Originally Posted by TimSJ

There are a few things you have to figure in additionally.. at least with MB which is what my experience is with.. you also have to buy insurance from them which is expensive also the shipping... Basically what you end up saving is the cost of renting a car for the time that you are there. It is a great program though. I would highly reccommend it to anyone

we just called the dealer and they said they pay for shipping for you.....and we dont have to pay for the insurance as long as we dont stay for more than 14 days!!!

[arsenal]

Originally Posted by OilersBaby

we just called the dealer and they said they pay for shipping for you.....and we dont have to pay for the insurance as long as we dont stay for more than 14 days!!!

That's the same as with Porsche's program. When I buy my Porsche, I am so doing this!

[go iggy]

Timsj or anyone eles,

Looking for a very economical 4 door car. Which do you recommend Honda fit, Toyota yaris, honda civic, toyota matrix? I just want something that is great on gas and I can put around the city with.

Thanks

[Reggie Dunlop]

Yaris is a great vehicle. Gets about the same milage as a Smart (just a bit more in real-world situations), is bigger, safer, cheaper and is an actual car as opposed to a go-cart. Can't go wrong with either a Yaris or a Fit if you go that route.

Same deal upsizing to a Matrix or Civic. Can't go wrong with either Toyota or Honda.

[Sample00]

Originally Posted by TimSJ

In Ontario when you buy a car you have to have a provincal inspection done.. This is alos reffered to as certified.

E-Tested: In ontario all cars must pass an emission test. so if a car has passed this it is refered to as e-tested.

hope this helps

in Alberta, the dealership needs to provide you with a Mechanical Fitness report on the vehicle. This report cannot be older than 2 weeks and ensure that you check the odometer and compare it to the report.

secondly, out of province inspections need to be done with any vehicle that was not originally purchased in alberta.

third, safety inspections need to be done with vehicles 10 years of age or older.

[STeeLy]

Originally Posted by go iggy

Timsj or anyone eles,

Looking for a very economical 4 door car. Which do you recommend Honda fit, Toyota yaris, honda civic, toyota matrix? I just want something that is great on gas and I can put around the city with.

Thanks

I don't know if the Matrix is all that fuel efficient, especially compared to the likes of the Yaris. If you are looking at a used car though, I'd give the Toyota Echo a look.

[Machiavelli]

Wow, this thread has been really helpful. I read the whole thing this morning (took a couple of hours)!

Thanks so much TimSJ for all your help. Not many would provide free advice, especially when some of your advice probably isn't good for business. You're a peach!

Anyways, I've got a few more questions (I noticed you posted in the Hottie Draft thread, so I know you're around!). Haha

Sooo, I'm looking to buy a slightly used vehicle this summer and was thinking about a small sedan like a Mazda 3, Honda Accord, or Toyota Corolla. Upgrading to something like an Acura isn't out the question either. So the first question would be ....what do you think of the first three cars I mentioned, and then lesser known cars like the Mitsubishi Lancer or Nissan Versa? How do they compare (you can be very brief)?

Also, why do you think that leasing is a better option than buying if you don't plan to hold onto the car for more than five years? I'm thinking of buying a 2007 or 2008 at around $17,000 or so, and then selling in three years (comparable to a 04/05 now) for about $13,000. I'd only lose about $4000 (plus taxes and whatever that I paid initially), which is much, much less than I would pay leasing for three years.

Also, how much of a recent grad do you have to be to get the $500 discount, and is this Canada-wide?

[DementedReality]

Originally Posted by Machiavelli

....

Also, why do you think that leasing is a better option than buying if you don't plan to hold onto the car for more than five years? I'm thinking of buying a 2007 or 2008 at around $17,000 or so, and then selling in three years (comparable to a 04/05 now) for about $13,000. I'd only lose about $4000 (plus taxes and whatever that I paid initially), which is much, much less than I would pay leasing for three years.

here is why i think leasing is ALWAYS the best option.

Scenario - $25,000 car

Option 1: outright cash purchase
Result: $25,000 capital out of pocket all up front
In 4 years, that 25k is now worth 12k and declining every year. Warrenty is over and your outlay will only increase. that piece of metal in the drive way represents tied up depreciating capital.
Net Value: 25k out - 12k remaining value = -13k loss in 4 years and loss keeps growing as unit depreciates and repairs are made


Option 2: financed purchase
Cost: about $550 per month.
Same result as above, except your capital is out layed in 1/48th segments, but it is resulting in owning a depreciating assett
Net value: 26k out - 12k remaining value = -14k loss and loss keeps growing as unit depreciates and repairs are made


Option 3: lease
Cost about $300 per month
No capital tied up. In 4 years, your asset is worth zero BUT if you saved the $250 difference in payments, you have a liquid cash asset worth $10,000 and growing. Also over the 4 years, your cash flow is much better, as I only have to pay for about 50% of the value of the unit and can do it in 1/48th increments.
Net value: 14k out - 10k in value = -4k loss BUT your cash value grows and is appreciating in value unlike options 1 and 2.


In month 49:
Option 1 & 2: you own an asset that has all your capital tied up and is losing money every day and exposing the owner to risk of more financial outlay (repairs). that car you see in your driveway every day represents an asset and every week its worth less and less until its worthless.

Option 3: you own $10,000 and growing in liquid cash in a bank account and do not own anything depreciating in value nor are you exposed to any risk of paying out further.

Face it, who wants to own a car past 8 years? So yes for months 49- 96 in options 1 and 2 you dont have payments, but your asset continues to decline in value where as in option 3, the asset has grown to over 20k in liquid cash (+interest growth). So in month 97, you hit the street to start again, one scenario you have very little capital and start from zero again with and in the othe scenario (lease) you have spent far less and own more.

just my thoughts, i see no reason to turn 25k into 12k. there is no good reason to own a car, they do not get better with age.

[Ironhorse]

IMO, leasing is for people who wish to have a new car every 3-4 years.

Depreciation depends on the car, not all of them are crapboxes that are dead after 5 years. You only worry about depreciation if you are planning on reselling the car relatively soon; the depreciation curve is the highest, iirc, in year 1-3 of the car (depending on brand/model).

[DementedReality]

Originally Posted by Ironhorse

IMO, leasing is for people who wish to have a new car every 3-4 years.

Depreciation depends on the car, not all of them are crapboxes that are dead after 5 years. You only worry about depreciation if you are planning on reselling the car relatively soon; the depreciation curve is the highest, iirc, in year 1-3 of the car (depending on brand/model).

well by my post, you can see i firmly disagree... even if you want to keep the car for 10 years, leasing makes sense.

i would rather give you the price of the car in little bits and keep the cash to myself then to give it up in one lump sum.

if you lease the car and love it, buy it when the lease is up and consider it a 4 year test drive. in the meantime, you only pay 50% of the car in the first 4 years and at 1/48th at a time. why not keep your money in your bank account?

[Fozzie_DeBear]

Originally Posted by DementedReality

well by my post, you can see i firmly disagree... even if you want to keep the car for 10 years, leasing makes sense.

i would rather give you the price of the car in little bits and keep the cash to myself then to give it up in one lump sum.

if you lease the car and love it, buy it when the lease is up and consider it a 4 year test drive. in the meantime, you only pay 50% of the car in the first 4 years and at 1/48th at a time. why not keep your money in your bank account?

If the finance rate is low why not finance it? Then it is essentially free money...and after 48 months your cash flow improves dramatically.

Not many ways leasing makes sense if you want to keep a car long term...

[DementedReality]

Originally Posted by Fozzie_DeBear

If the finance rate is low why not finance it? Then it is essentially free money...and after 48 months your cash flow improves dramatically.

Not many ways leasing makes sense if you want to keep a car long term...

as i said in my first post its because you are financiing 100% of the car in the first 4 years where as in leasing you are only paying for about 50% of the car.

if you take the difference in payment and invest it, you are far further ahead than buying the car through financing.

do the math.

[Kjesse]

Originally Posted by DementedReality

as i said in my first post its because you are financiing 100% of the car in the first 4 years where as in leasing you are only paying for about 50% of the car.

if you take the difference in payment and invest it, you are far further ahead than buying the car through financing.

do the math.

I've "done the math" many times over. The only way leasing benefits you is if you write the lease payment off on a significant income tax bill, or if you can't afford the down payment without taking away from something where you need the money, like your personal investment plan.

A personal example from last year when I sold my 2002 Xterra --- I put 10K down on a $34K purchase in 2002. Payments were about $525 a month for 4 years with 0.9% financing. I sold it with 40K kilometers last year for $23K.... money that went straight into my pocket. Cash outlay: $35,200. Return: 23,000. Cost over 5 years: $12,200

I could have leased for something like $2000 down with $400 monthly payments, and I'd have had nothing at the end of 4 years. Lease payments would have been $19,200, plus the downpayment of $2000, I've spent $21,200, and after 4 years I still would have needed to get a vehicle for another year.

These are round figures, not exact, but pretty close.

[DementedReality]

Originally Posted by Delgar

I've "done the math" many times over. The only way leasing benefits you is if you write the lease payment off on a significant income tax bill, or if you can't afford the down payment without taking away from something where you need the money, like your personal investment plan.

A personal example from last year when I sold my 2002 Xterra --- I put 10K down on a $34K purchase in 2002. Payments were about $525 a month for 4 years with 0.9% financing. I sold it with 40K kilometers last year for $23K.... money that went straight into my pocket. Cash outlay: $35,200. Return: 23,000. Cost over 5 years: $12,200

I could have leased for something like $2000 down with $400 monthly payments, and I'd have had nothing at the end of 4 years. Lease payments would have been $19,200, plus the downpayment of $2000, I've spent $21,200, and after 4 years I still would have needed to get a vehicle for another year.

These are round figures, not exact, but pretty close.

so when you made this decision, you must have been completly free of all debt? otherwise, why would you invest 10k upfront to save .9%? why not use that 10k on more expensive debt?

did that 34k include the 7% GST?

so how much interest did you pay out on other debt while you invested 10k and 525/month into your car?

if you had leased, you would be ahead.

you spent 35, you sold for 23, your cost is 12k (as you said)
lease, you would have spent only 19k and you would have saved 16k!

i would rather be the guy at year 4 with 16 extra cash and no car, then the guy who spent 35 and now has to sell a declining value asset to get my cash. not only that it was an ineffecient use of your capital to pay down a 35k loan at .9% (unless you had no other debt).

not only that, what if your car had an accident over 4k but not written off? your asset is seriously devalued as you must declare this. what if its a lemon and everyone knows it?

i dont see how you were ahead. thats me.

why carry the risk and the extra expense?

[Machiavelli]

Originally Posted by DementedReality

you spent 35, you sold for 23, your cost is 12k (as you said)
lease, you would have spent only 19k and you would have saved 16k!

i would rather be the guy at year 4 with 16 extra cash and no car, then the guy who spent 35 and now has to sell a declining value asset to get my cash. not only that it was an ineffecient use of your capital to pay down a 35k loan at .9% (unless you had no other debt).

This is the part of the leasing argument that I don't understand. Maybe it's just your leasing argument.

How is spending 19K saving anything? You spent 19K. End of story.

As for the buying option, you spent 12 K and if you use the same argument as you seem to be using for leasing, saved 23 K.

I'm just not getting it....

[DementedReality]

Originally Posted by Machiavelli

This is the part of the leasing argument that I don't understand. Maybe it's just your leasing argument.

How is spending 19K saving anything? You spent 19K. End of story.

As for the buying option, you spent 12 K and if you use the same argument as you seem to be using for leasing, saved 23 K.

I'm just not getting it....

fair enough, poor use of verbage on my part.

when you take on a car, you are going to spend money, not make money. true.

but in that scenario, one of us spent 35k (financed or outright) the other spent 19k. to drive the same car for 4 years.

at the end of that 4 years:
person 1: spent 35k (plus opportunity cost of having the capital tied up AND not paying down more expensive debt). sold for 23k, has a total cost of 12k - no asset remaining

person 2: spent 19k and has 16k in cash.

so while person 2 may have spent more, they preserved 16k in cash that will keep growing. person 1 has nothing but is 12k poorer for the effort.

[DementedReality]

Originally Posted by Machiavelli

As for the buying option, you spent 12 K and if you use the same argument as you seem to be using for leasing, saved 23 K.

I'm just not getting it....

how did the person save 23k by buying?

[DementedReality]

i guess another way to look at this is picture you have a pile of cash. every day, the pile gets a little bit smaller and smaller.

thats buying a car. go look outside at your car. it represents a pile of cash. every day that pile gets less and less. not only that, its not liquid.

leasing a car. the pile of cash is in your bank account and every month, you take a little bit of that pile and give it to the car company (at a far lower value than buying it). you still have all your cash, liquid too.

id rather look at a depreciating asset and think to mysef, i only have to give up a little bit of money 1/48th at a time rather than hope my investment in it holds.

[TimSJ]

Hey all was away for the weekend. Great discussion here about leasing vs. buying.. The reason why I recommend leasing in todays car market is that you are getting a guarenteed downside. You know going in that your car is worth $x at the end of the term of the lease. This is especially important in todays market. since October used car wholesale prices are off 30%.

Here is an example of a customer of mine that i am dealing with right now.

He leased a 2006 E350 MB. his lease is up next month and the residual on the car is $48,000. In todays market i can buy that car in the wholesale market for $38-39k. in september i was paying $50k for the same car... so by turning the car in at the end of the lease the leasing co is only going to get the $38k for the car and is taking the $10,000 hit. If he owned the car it would be his $10,000

Now with a lease you have first option to buy at the residual amount so if the market was the other way and the car was worth more than the $48k he could excercise his option to buy and get his equity out.