Car repossession question

[Old Yeller]

Originally Posted by Bill Bumface

The biggest thing this did for me is completely change what I thought was an appropriately priced vehicle to drive. Getting a bank draft for tens of thousands of dollars to go buy a car really adds to the gravity of the purchase/decision.

Yup, I agree 100% as I'm currently in that situation. My last car was written off over a year ago and we've been a one car family ever since. That's not going to be feasible in the near future so I'm forced to get off my ass and go car shopping.

I've saved for years and have a reasonable amount built up and it's almost making it harder to buy a car as it just seems like such a larger decision than a monthly car payment.. it's actually driving me nuts trying to pick a car in a price range that provides me peace of mind and/or good value.

That being said, I don't know how people waste such volumes of money when it comes to new cars... I'd have trouble sleeping at night.

[you&me]

Originally Posted by GoinAllTheWay

Here's another question.

If you're the type of person that tends to buy vehicles and hold on to them for a long time, say 8-10 yrs, does that start to blur the lines between the value of buying new or used?

The steepest rate of depreciation will almost always happen in the first 18-24 months. So even if you're looking at an longer ownership cycle, you would be far better off buying a 2 year old car and then keeping it for 8 years, than say buying a new car and keeping it for 10.

[Sliver]

Originally Posted by GoinAllTheWay

Here's another question.

If you're the type of person that tends to buy vehicles and hold on to them for a long time, say 8-10 yrs, does that start to blur the lines between the value of buying new or used?

It probably does a bit, but I think blankall hit it best with this:

Originally Posted by blankall

Spending money on a new car would delay my retirement by 1-2 years, and my car works perfectly now. There are just so many ways that a capitalist society chains people to working so that they can consume things they don't need.

It just comes down to how much money you have (your limited resource) and what you're willing to trade to have a car. Blankall is prioritizing retirement over a new car, which is sensible.

Some people have so much money that they could buy a new Ferrari and it wouldn't materially impact their retirement schedule. If buying a new Kia Teluride puts off your retirement by 1-2 years, then maybe you need to think long and hard about how important it is for you to drive the latest Kia.

Also, maybe holding onto cars for 8-10 years isn't even a good thing. I hear people talk keeping cars for a long time as though it's a responsible financial choice, but I've always found getting a used car for a good deal and then selling it within a couple of years for as much as you can allows you to drive different cars (if that's what you enjoy) while not having to do major maintenance. You can drive for almost free that way.

If you're holding onto cars for a decade, you're eating all the depreciation. If you jump in and out, you're not. I've worked my way up to a pretty cool fleet doing this. Most people would probably think I spend way too much on cars; however, a guy with a new Ford Explorer has more money into his one lame car than I have into my Sienna, Cooper S convertible and CLS550 put together.

Again, though, if you have lots of money there is no harm in enjoying it. Up to date on your RESPs, RRSPs, TSFAs, mortgage is paid off, emergency fund topped up, appropriate insurance (life, disability, etc.) and you still have money? Go buy a fun car.

[bagofpucks]

Yup, they have already been approved and are driving the “new” used vehicle. I can only assume what their interest rate would be and I’m wondering if they got after it so quick so that the repossession didn’t show up on their credit rating? This vehicle is about $15K, which again is an awful lot of money!

[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.

[blankall]

Originally Posted by GoinAllTheWay

Satisfying little project, no? I did the same thing with my car and it really added features I felt were missing in my car. Bluetooth music and hands free cell use. It's been a fantastic addition.

Don't necessarily like the small microphone sticking to my steering wheel column but it's really not that noticeable.

Go a pretty good deal on the whole thing at Visions on Boxing Day. Can't say I was brave enough to do the work myself though. The unit I got installed really is incredible. Android Auto allows me to listen to the entire Google Music (or is this YouTube music) library. The hands free is great. I'm not sure how I lived without the navigation system before. The voice recognition via Android Auto has changed my life.

Changing the speakers from stock also made a huge difference.

Yes, the little microphone is weird, but it's in a space that you can barely see it in my car.

[blankall]

Nm

[CaptainCrunch]

I get a call every couple of years from my dealership, hey you've had you're car for a couple of years, did you want to swap it for something new.



I did it once because I got a way more gas efficient car, that was cheaper and things balanced out. But its a real pressure tactic on their side "Yeah we've got someone that would buy your old car tomorrow so there's a good payoff"

[powderjunkie]

Too many words to read this thread. Can someone just tell me what my monthly payments will be and where to sign?

[bizaro86]

Originally Posted by topfiverecords

Buy a one to two year old used car privately on Kijiji in cash. Guy has already tried to trade it in on next years model and has been offered 50% what he originally paid for it. Give him 52%.

Is this actually possible? I've only bought a new vehicle twice. On both occasions, used models 1-2 years old seemed to be more like 20% less after I haggled down the new car purchase price aggressively. Given the extra kms, lack of warranty, and now half-worn brakes/tires, new seemed to be the better option.

I'm planning to maintain well and keep for a long time, the older is now 12 years old, so I'm not succumbing to the upgrade every year fallacy. I'm starting to think about replacing the 2008, and would love to hear that I'm wrong about this. Writing the huge cheque for a new car always burns me.

I like slivers plan the best, but I think it probably works better for those with car knowledge. I can't see learning enough to effectively buy and sell used cars every year or two, even if it worked out cheaper, because I hate the process. That almost certainly makes me way worse at it than someone like silver.

[Weitz]

Originally Posted by bizaro86

Is this actually possible? I've only bought a new vehicle twice. On both occasions, used models 1-2 years old seemed to be more like 20% less after I haggled down the new car purchase price aggressively. Given the extra kms, lack of warranty, and now half-worn brakes/tires, new seemed to be the better option.

I'm planning to maintain well and keep for a long time, the older is now 12 years old, so I'm not succumbing to the upgrade every year fallacy. I'm starting to think about replacing the 2008, and would love to hear that I'm wrong about this. Writing the huge cheque for a new car always burns me.

I like slivers plan the best, but I think it probably works better for those with car knowledge. I can't see learning enough to effectively buy and sell used cars every year or two, even if it worked out cheaper, because I hate the process. That almost certainly makes me way worse at it than someone like silver.

The 1-2 year old car for 50% less is a myth these days IMO. While on the balance of TCO you may still be better off on a 1-2 year old car but you are right you are paying 70-80% of new value and I would guess its a lease return or rental.

[you&me]

Originally Posted by Weitz

The 1-2 year old car for 50% less is a myth these days IMO. While on the balance of TCO you may still be better off on a 1-2 year old car but you are right you are paying 70-80% of new value and I would guess its a lease return or rental.

This varies wildly from vehicle to vehicle and perfectly highlights my point earlier that anyone buying a new(er) car would be well served to spend just a little bit of time researching the resale values of same-for-same vehicles that are 2-3 years older than the one(s) they're looking at.

There are plenty of cars that will depreciate nearly 50% in 2 years and there are plenty that will only drop 30% or less... That should all factor into the decision to buy, beyond the interest rates and payments.

[Red Potato Standing By]

Isn’t it counterproductive to call it stupid to buy new and to only buy used? Cause if everyone got smart and only bought used then the used cars would eventually be pretty crappy and with no influx of new ones. Only about an eighth or less serious.

[Looch City]

What if I bought a Tesla instead?

[calumniate]

Originally Posted by GoinAllTheWay

This thread is what scares the eff out of me over buying a new car. I've been driving the same 05 Mazda 3 for 10 yrs, it's been paid off for 9. Still a hell of a car but it's starting to show it age. I'd love a new vehicle but don't know anywhere near enough about not getting screwed over when buying a new(er) one.

Are there any "buying a new car for dummies" kinda books out there I should be reading?

I'd suggest goin' all the way!

I bought my car off of darknight a couple of years ago (2004 alero), and recently sold it. Was great! I lost $200 on the overall use of the car.

[Scroopy Noopers]

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.

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.

[Tacopuck]

When I financed my new truck, the person selling it to me seemed flabbergasted that I was actually reading the financing agreement before I signed it, saying they've never seen anybody read it.

Same thing when I signed my mortgage, the lawyer thought it was odd I was reading the whole agreement before I signed.

Also who drops $80k on a KIA, am I missing something? Are they cool now?

[Derek Sutton]

Too much misinformation to address each one individually.... I've sold in the neighbourhood of 500 vehicles over the last 4 years and getting advice from people who buy a vehicle every 10 years is not the best way to go. Feel free to PM me with any questions you might have.

Depreciation averages 30% year one, 17% year 2 and 8% year 3. This varies by vehicle and market but it is a good rule to follow. So 55% in 3 years. There will be some variances based on km's and vehicle (a Dodge Journey for instance is much more then that and a Jeep Wrangler hold its value much better).

Resale value really only makes a differenc if you plan on re selling it in a short period of time. If you plan on driving it for ten years and miling it out, the resale is only going to be a fraction of the original price no matter what you buy.

Those advocating for a year or two old vehicle vs a new vehicle need to consider all the factors, beyond depreciation. Cost of ownership, payment, perks of buyIng new etc... What makes more sense of theses two scenarios?

One: Buying a $37000 two year old truck at a 6.49% interest rate for a payment of $760 a month over 5 years
Or?
Two: Buying a new $50,000 truck at 0% over 6 years for a monthly payment of $730????
That's why people buy new.

There also the leasing way of ownership which makes sense for so many people but the refuse to listen. If you are in the 3-4 year of ownership cycle, I strongly recommend exploring the pros and cons of leasing. Remember you don't truly own your vehicle untill the last payment is made and most people are trading it in long before the 6 or 7 years is up.

[Husky]

Just got a 2020 GLE - screw used ha!

[GGG]

Originally Posted by Derek Sutton

Too much misinformation to address each one individually.... I've sold in the neighbourhood of 500 vehicles over the last 4 years and getting advice from people who buy a vehicle every 10 years is not the best way to go. Feel free to PM me with any questions you might have.

Depreciation averages 30% year one, 17% year 2 and 8% year 3. This varies by vehicle and market but it is a good rule to follow. So 55% in 3 years. There will be some variances based on km's and vehicle (a Dodge Journey for instance is much more then that and a Jeep Wrangler hold its value much better).

Resale value really only makes a differenc if you plan on re selling it in a short period of time. If you plan on driving it for ten years and miling it out, the resale is only going to be a fraction of the original price no matter what you buy.

Those advocating for a year or two old vehicle vs a new vehicle need to consider all the factors, beyond depreciation. Cost of ownership, payment, perks of buyIng new etc... What makes more sense of theses two scenarios?

One: Buying a $37000 two year old truck at a 6.49% interest rate for a payment of $760 a month over 5 years
Or?
Two: Buying a new $50,000 truck at 0% over 6 years for a monthly payment of $730????
That's why people buy new.

There also the leasing way of ownership which makes sense for so many people but the refuse to listen. If you are in the 3-4 year of ownership cycle, I strongly recommend exploring the pros and cons of leasing. Remember you don't truly own your vehicle untill the last payment is made and most people are trading it in long before the 6 or 7 years is up.

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.