Car repossession question

[Derek Sutton]

Originally Posted by GGG

Based on your depreciation numbers above the two year old truck should only cost between 26k and 29k. So you jacked up the used price significantly.

You also can’t use purchase price when determining the cost of a vehicle. You need to use depreciated cost in the year you plan to sell minus purchase price. Your cost of ownership is based on the decline in value each year.

The cost of that 50000 truck in year 1 is 15,000. The cost of the two year old truck in its year one is 3000 plus the interest rate differential (about 2k). In year 4 and 5 of new vs 6 and 7 of old you would need to include more maintenance cost in the older vehicle. However despite all that it would need to be an exceptional scenario for the lifecycle cost per km to be higher on a 2 year old car than a brand new one over the next 5 years of ownership.

As I said earlier values vary depending on market. Trucks are currently carrying value very well as the US market has inflated the prices. Also you can’t compare trade in value (depreciated price) to retail price of the Used one. I used theses numbers as they are accurate comparables, it’s what I do every day. Really should you own the truck for 5 or more years the depreciation can be looked at as irrelevant, and to a lot of consumers it is! Other then property, the depreciation in everything we own is sickening, from electronics to clothes to home furnishings, you name it and it’s far worse on those items then it is on a truck. That $3500 sofa set you bought 5 years ago??? $250.

[powderjunkie]

Originally Posted by Scroopy Noopers

If you have the means, get the same car a year or two used. That’s a smart move in my opinion, if you’re buying a vehicle because you want to and can easily afford it. Just do the math to calculate how big of a downpayment you should make so your never upside down on the car.

I'm always a little sketched out by this idea because I can't comprehend the kind of person who would sell a car so quickly. I worry that the most recent oil change, would have been the first/only oil change ever... (obviously I'd want to see maintenance records, but I'd still be worried that it's not the type of person to 'care' for a vehicle)

[bizaro86]

Originally Posted by powderjunkie

I'm always a little sketched out by this idea because I can't comprehend the kind of person who would sell a car so quickly. I worry that the most recent oil change, would have been the first/only oil change ever... (obviously I'd want to see maintenance records, but I'd still be worried that it's not the type of person to 'care' for a vehicle)

Yeah, I can't imagine any sane person buying a new vehicle and then selling it a year later. That always makes me think you must be dealing with an insane person, which doesn't speak well for how they treated it. Maybe if you knew someone who had a life change (job transfer to Europe, parents lost license due to age) but that seems about it.

Buying a 1-2 year old car from a dealer seems like a guaranteed way of getting a rental/fleet vehicle, which has the same, "how was this treated" issue.

I just looked at all the 7 seater 2018/2019 SUVs listed for private sale on kijiji, and they were pretty much all at 80% of MSRP. Doesn't seem worth it to me.

[flamesfan1297]

I'm in the market for a new holiday trailer and I've been looking online a lot lately, as well as at the RV show this past weekend. I've noticed they really want to push the financing, specifically the bi weekly payments. Even though I start out with saying I'm paying cash

The one dealer showed me a trailer for $300 biweekly, over 96 months. then when I said no they changed the price to $150 biweekly over 192 months, while trying to tell me they were losing money now because they cut the price in half. Do people really fall for this?

[DownhillGoat]

@Sliver

Sorry I'm on my phone and the new Tapatalk app completely sucks, but I'd like to respond to this:

"Also, maybe holding onto cars for 8-10 years isn't even a good thing."

You and I generally agree on used vehicles but I feel like there's a HUGE caveat to this. If you're planning on flipping it regularly, or even eventually, sure, I agree. However if it's a DD you only care about going from point A-B with, or something you want to drive into the ground, I completely disagree.

For a sports car you want to sample and get something else to sample later? Absolutely.

However I look at the example of my truck (which I actually think I love more than I loved my 911). I literally bought it expecting to drive it into the ground. Bought it from new, owned it for 7 years and running. I know every dent, bump, and strange noise. For money sunk, I've spent $1000 on a 100k inspection because I wanted it looked at with a second set of eyes I trust. Everything else I've done on my own. My total cost of ownership has been oil changes, batteries, tires, and some rust removal to keep it in pristine shape. Oh and the odd rotor replacement. All said and done I don't think I'm over 5k in over 7 years.

It's been paid off for half it's life and has, realistically, another 15-20 years left in it. It will likely only be curbed when the government legislates out gas pickups.

If you want to sample something else? Yeah. Purchasing and holding is stupid, but in many cases or makes sense.

I have no desire to get rid of my truck. The cost of windshield replacement is $250 vs a 2019 which is $1500 and up with traffic automation.

A new battery is $100. If you have a 2020 you likely have to go to the dealership to replace the battery. .

So long story short, I don't think holding a vehicle for 10 years is anywhere close to stupid.

Sent from my Pixel 3 using Tapatalk

[DownhillGoat]

@Table 5 holy #### dude you deserve it just buy a new car

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[Snuffleupagus]

Originally Posted by bagofpucks

Coming to the CP hive mind...

Friends of ours made an absolute horrible decision and bought a very expensive SUV and also received $8K cash back as part of the loan. 4 months later the vehicle has been repossessed. They believe they are in the free and clear since Alberta is a “sue or seize” province, but I can’t imagine they are off the hook for the cash back loan, right?

Anyways, anyone have more info on this?

It's too late to go through this thread for any info but i'll chime in and say it takes at a minimum 3 months after missing a car payments to have it legally repossessed, If true,your friends didn't make a absolute horrible decision they scammed a dealership and didn't pay a dime for that SUV.

But for me I would really love to know what dealership allows you to drive an expensive SUV off their lot with an $8k check in the dash, cash backs are usually just a term, they go towards the price of the vehicle or sometimes just in the form of options.

[Snuffleupagus]

Originally Posted by flamesfan1297

I'm in the market for a new holiday trailer and I've been looking online a lot lately, as well as at the RV show this past weekend. I've noticed they really want to push the financing, specifically the bi weekly payments. Even though I start out with saying I'm paying cash

The one dealer showed me a trailer for $300 biweekly, over 96 months. then when I said no they changed the price to $150 biweekly over 192 months, while trying to tell me they were losing money now because they cut the price in half. Do people really fall for this?

yes, they do!I have to say bud and no offence but if you buy an RV from a dealer in today's economy you need a brain scan! If you look around you can literally get a trailer for 30 cents on the dollar, my sister bought a 16 month old $32k trailer for $10k last year, I know another fellow that bought a 3 year old $40k 5th wheel for $17k.

In my next life I want to be a new RV salesman, 50% of people just keep buying them,storing them and eventually selling them. the other 50% keep buying new ones...amazing!

[jayswin]

Originally Posted by Snuffleupagus

But for me I would really love to know what dealership allows you to drive an expensive SUV off their lot with an $8k check in the dash, cash backs are usually just a term, they go towards the price of the vehicle or sometimes just in the form of options.

Not these days. It's newest the gimmick to suck in desperate buyers already in debt, rather than to roll into your down payment or options on the vehicle.

Like someone else mentioned earlier, it's why you hear radio ads for dealerships saying "treat yourself with that vacation you deserve or catch up on Christmas bills" in regards to their cash back incentive.

[GGG]

Originally Posted by Derek Sutton

As I said earlier values vary depending on market. Trucks are currently carrying value very well as the US market has inflated the prices. Also you can’t compare trade in value (depreciated price) to retail price of the Used one. I used theses numbers as they are accurate comparables, it’s what I do every day. Really should you own the truck for 5 or more years the depreciation can be looked at as irrelevant, and to a lot of consumers it is! Other then property, the depreciation in everything we own is sickening, from electronics to clothes to home furnishings, you name it and it’s far worse on those items then it is on a truck. That $3500 sofa set you bought 5 years ago??? $250.

How is depreciation irrelevant? It is roughly 50% of the cost of ownership. I agree with you that depreciation is ridiculous therefore most things should be bought used.

Fair enough on the numbers I was basing it on your depreciation included in your post missing that trucks are a lower depreciation category. The first year cost of ownership for depreciation then is about 10k vs 6k

[speede5]

Originally Posted by Table 5

I'm almost 40 now and was just this weekend considering maybe buying a new car for the very first time. I knew it all along in the back of my head, but this thread knocked some sense back in me. Oh well, it was fun to dream a little.

I'm turning 50 this year and have yet to own a new car. Closest I've been was assuming a lease on a 2 yr old car for the remaining 2 years of the lease. It came available right when I was seriously looking at buying new and the guy paid all the fees so I walked right into it.

It was at a time in our lives when I didn't have a garage and was doing a massive home reno so I wanted care free driving for a period. Was a great decision at the time.

I know people who know nothing about cars and lease continually, new car every 3 yrs or so, always on warranty, the payment is just another bill/cost of living.

Every situation is different, what is stupid to one person makes sense to another. I still can't wrap my head around accepting depreciation in a new car buy, yet when I get in a new car I wonder if I'm missing out a bit driving beaters all the time.

I just bought a slightly hail damaged Magnum from insurance, and ran it through a safety, had to replace pretty much the whole front end but now I've got a really nice DD and it cost me half of what they cost used even after all the new parts. It's not as fun as it used to be but until my body refuses I think I'll keep putzing around in the shop and driving used.

[Fuzz]

Oh man, I had a rental Magnum and hated that thing. The little postbox size rear window and general pitiful visibility.

[speede5]

Originally Posted by Fuzz

Oh man, I had a rental Magnum and hated that thing. The little postbox size rear window and general pitiful visibility.

It is taking me some getting used to for sure. I find turning corners I have a hard time seeing curbs and medians, not sure if I need to raise the seat or move back a bit. The pillars and mirrors block a lot.

Rearward is pretty bad, but I don't mind that much.

[Derek Sutton]

Originally Posted by GGG

How is depreciation irrelevant? It is roughly 50% of the cost of ownership. I agree with you that depreciation is ridiculous therefore most things should be bought used.

Fair enough on the numbers I was basing it on your depreciation included in your post missing that trucks are a lower depreciation category. The first year cost of ownership for depreciation then is about 10k vs 6k

Yes true, however when comparing financing new vs used, the truck that you bought new is going to have a higher value 5 years later than that now 7 year old truck that you bought as a 2 year old used truck. Once year 4 rolls around trucks we use $3500/ year of depreciation, so the 7 year old truck value is about $7000 less. And yet you've paid equal payments over that time, so what it boils down to is "would you rather pay that money in interest to the banks, it put it towards yourself driving a brand new vehicle which is going to be covered under full warranty?"

I know that for a lot of people, given nearly everyone finances, it does make sense to go this way. Many customers lean towards a year or two old used vehicle thinking they are saving money, but unless they are paying cash, they really need to do the math. This also assumes there is $0 depreciation on used vehicles which is not the case either, you are still going to lose $4000 when you drive that used $37000 truck off of the lot.

[Table 5]

Originally Posted by DownhillGoat

@Table 5 holy #### dude you deserve it just buy a new car

Thanks for the encouragement, but the cars I was looking at (4Runner and/or Gladiator) are in the 50-60K range...which is more than double (almost triple) the absolute maximum of what I've spent on a car before. I've also gotten too used to buying/cars at the bottom of their depreciation curve, so the cheap-ass in me finds it hard to justify.

At least both of them have great value retention. But I think I'm better off buying used again, and putting any extra money towards travel, camping gear, etc.

[blankall]

Originally Posted by bizaro86

Yeah, I can't imagine any sane person buying a new vehicle and then selling it a year later. That always makes me think you must be dealing with an insane person, which doesn't speak well for how they treated it. Maybe if you knew someone who had a life change (job transfer to Europe, parents lost license due to age) but that seems about it.

Buying a 1-2 year old car from a dealer seems like a guaranteed way of getting a rental/fleet vehicle, which has the same, "how was this treated" issue.

I just looked at all the 7 seater 2018/2019 SUVs listed for private sale on kijiji, and they were pretty much all at 80% of MSRP. Doesn't seem worth it to me.

I think it's a bit of a myth that people treat lease return vehicles worse than vehicles they own. If you return a leased vehicle with any kind of issues, the dealership will absolutely gauge you. There are also km limits on most leases. Many dealerships also provide the first few services free of charge. It's a question of finding an honest dealership that won't knowingly sell you a car they know has issues.

The 1-2 year vehicle thing is an issue for sure, but for my next vehicle I definitely plan to look about 3 years old. Specifically, I'll be looking for a car with excellent reliability ratings, still under manufactures warranty, and preferably factory re-certified.

[Sliver]

Originally Posted by Table 5

Thanks for the encouragement, but the cars I was looking at (4Runner and/or Gladiator) are in the 50-60K range...which is more than double (almost triple) the absolute maximum of what I've spent on a car before. I've also gotten too used to buying/cars at the bottom of their depreciation curve, so the cheap-ass in me finds it hard to justify.

At least both of them have great value retention. But I think I'm better off buying used again, and putting any extra money towards travel, camping gear, etc.

A Gladiator, eh? That surprises me about you in the same way you were surprised when Troutman bought the Challenger.

I wonder how the Gladiator sales are doing. I sure don't see many on the road. I thought they'd be everywhere. It would be so hard to buy one over a Tacoma IMO, but if I were in my 20s or early 30s I could see it (just not at that price).

Two good choices for resale for sure, though. I'd be hard pressed to buy a 4Runner used, TBH. Like if you had your heart set on one, new is a good bet. They don't depreciate fast, and when they finally come down to an attractive price they have a kajillion kms.

[burn_this_city]

Gladiator is way overpriced for a midsize truck. The Ruby version is over $70k, ####ing insane.

[Sliver]

Originally Posted by burn_this_city

Gladiator is way overpriced for a midsize truck. The Ruby version is over $70k, ####ing insane.

And the Rubicon is the only version that looks really good. The lower trims look wimpier than you'd think they would.

[burn_this_city]

I think Jeep overestimated how many people would pay real truck money for something that is mostly for show.