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[Deleted member 1083629]

Guys
Will be landing in just before new years. Dreading the cold but trying to stay strong about it.
Need some advice/discussion about getting a car.

As you all must know, getting a good used car is stuff of dreams nowadays, exorbitant prices all around, hence have decided to go with a new car. I am completely new to the world of loans and EMIs and all that, so need a few pointers.

Whats the best(cheapest) way to get a new car on loan for a newcomer? Or are there better options than this? I am all ears.

I am talking basic transportation like a corolla or something.

I wouldn’t think about buying a car until you build some credit history. You would be hit with really high APR if you would be actually approved for the loan

 

[Deleted member 1006777]

"Used cars are expensive, so I will buy an even more expensive new car that will depreciate in value even quicker"
Huh..

 

[ilikesnow]

"Used cars are expensive, so I will buy an even more expensive new car that will depreciate in value even quicker"
Huh..

1-2 year old cars are seling for showroom price roughly, since waiting on most models is 6-12 months....

 

[Deleted member 1006777]

1-2 year old cars are seling for showroom price roughly, since waiting on most models is 6-12 months....

Must be a Canada specific thing then? US used car prices have plummeted, haven't they? Peaked much earlier in the year.

 

[AndyUK]

Must be a Canada specific thing then? US used car prices have plummeted, haven't they? Peaked much earlier in the year.

Not just Canada, it's similar in the UK - used cars are holding value much better than before. I'm pretty sure it's the same in the US but maybe just for some brands (imported cars are more affected from what I heard).

 

[Deleted member 1006777]

Not just Canada, it's similar in the UK - used cars are holding value much better than before. I'm pretty sure it's the same in the US but maybe just for some brands (imported cars are more affected from what I heard).

For now. For the next year or so while manufacturing and supply chains are in disarray. But sooner or later, that will end. A car is an awful investment. They are literally designed to keep you poor, and it really is unfortunate that countries like the US and Canada build their entire urban infrastructure based on a dependence on cars. No matter what happens to the economy, cars will always be a depreciating asset. And the value depreciation is always higher the newer the car is. There is literally no reason to buy a new vehicle because used ones are holding value *right now*. That's pretty short sighted imo.

Used car prices shot up during covid yes, but are down 15-20% since January. I think this is US data, but I'd wager Canada and UK are similar. Buying a used vehicle and driving it to the ground is the best you can hope for in terms of getting value out of it.

The rise in car prices was mostly driven by a shortage in inventory, in part becasue of the chip shortage. All of that stuff, while not fully reversed, has stabilized substantially. Buying a new vehicle is naive at best and reckless at worst, unless you're already loaded and don't know what to do with all that extra money you have lying around.

Edit 2: The guy wants to buy a new car, that's absolutely his choice. I'm not trying to start another forum war lol.

Edit:
Some quotes:
"Younger used vehicles (2020 - 2022) reported the most significant price declines, with 2021 models declining over 14%. Older used vehicles (2010 - 2018) held their value, declining 5% to 9% since July 2022. "

"The full-year Manheim Used Vehicle Value Index forecast is now expected to finish the year down nearly 14% year over year. This change from the second quarter’s revised forecast of a 6% decline was made in recognition of the third quarter’s seeing the largest declines of 2022 and further decreases are forecast for November and December. "



Sources:
https://joinyaa.com/guides/used-car-price-trends-for-2022/
https://www.axios.com/2022/11/08/used-car-prices-dropping
https://www.thedetroitbureau.com/2022/10/used-car-prices-dropping-expect-it-to-continue/
https://investors.cargurus.com/news-releases/news-release-details/cargurus-november-2022-intelligence-report-finds-used-cars

More detailed sources in these articles.

 

[AndyUK]

Oh, I totally agree. Buying a car is not an investment at all, because the value will always depreciate quite fast (not counting very rare exceptions).
Just saying that recently buying a second-hand car is not as a good deal as it used to be... which has its benefits as I'm preparing to sell my car and it looks like I will get 20-30% more than I thought I would

 

[Deleted member 1006777]

Oh, I totally agree. Buying a car is not an investment at all, because the value will always depreciate quite fast (not counting very rare exceptions).
Just saying that recently buying a second-hand car is not as a good deal as it used to be... which has its benefits as I'm preparing to sell my car and it looks like I will get 20-30% more than I thought I would

You might want to hurry. Used car prices will revert to the mean sooner than you think. Meaning that spike in prices you say post 2020 won't last much longer.

 

[cansha]

"Used cars are expensive, so I will buy an even more expensive new car that will depreciate in value even quicker"
Huh..

Used cars in some cases are selling at par with new cars and they are 3-4 years old. The wait time for new cars is just too long. I'm not sure why people have panic booked so many cars. May be it will settle down once people start cancelling their bookings. Car companies are gouging their customers right now.

 

[cansha]

ey are literally designed to keep you poor, and it really is unfortunate that countries like the US and Canada build their entire urban infrastructure based on a dependence on cars.

Couldn't agree more. Again, corporate interests were involved. The car manufacturers in USA wanted more communities dependent on cars. The actively lobbied politicians to discourage public infrastructure projects of mass transit. Then add to it the oil companies who benefit from more cars and the insurance providers. This trifecta is just too powerful.

if public transport is made more efficient in GTA, I would rather take that rather than risk driving where people drive really rash. But it is too late. Insurance companies in GTA are making a killing by charging obnoxious insurance rates.

 

[Deleted member 1006777]

Couldn't agree more. Again, corporate interests were involved. The car manufacturers in USA wanted more communities dependent on cars. The actively lobbied politicians to discourage public infrastructure projects of mass transit. Then add to it the oil companies who benefit from more cars and the insurance providers. This trifecta is just too powerful.

if public transport is made more efficient in GTA, I would rather take that rather than risk driving where people drive really rash. But it is too late. Insurance companies in GTA are making a killing by charging obnoxious insurance rates.

Yeah, the history of it is actually very fascinating (and sad for anyone who has to live in these places). I lived in the US for 9 years, and had a car only for the last 1.5. The city infrastructure is actually designed to punish you for not owning a car. And owning a car means you have basically set fire to 10-25% of your annual income in one go.

 

[ilikesnow]

Buying a new vehicle is naive at best and reckless at worst, unless you're already loaded and don't know what to do with all that extra money you have lying around.

Well it depends upon your situation, being a consultant and sole trader( Business ran by single person), When I buy a new car in Australia, I can:

1. Claim back total invoice GST
2. I can asset write off some part of tax.
3. I can claim 30% value of car depreciated in a year.
4. Within two years, I could have saved tax money equivalent of new car's price.
5. I can still sell it all cash for quite a value and repeat

 

[imransyed]

Well to start, I am not loaded, so I cannot be taking crazy spending decisions without over analyzing them.

Coming to car prices, after I posted this post here, I also realized that I am gonna be paying the maximum insurance rate where ever I end up living. Ontario is like $300 a month. Crazy.
The reason to get a new car instead a preowned one is pretty clear in all the posts. The prices will definitely come down, but I don't think it will be soon enough, at least for me.
Canada is a country where I feel not having a car is equivalent to not having a life. Coming from a Middle Eastern Oil rich country, so I know first hand what that feels like.

My final decision is to mentally prepare to overpay 20-30% for a used car, i think even then it will work out to be cheaper than the Bank.

I hate banks. I hate them with a passion. They are not your friends. My religion forbids me from taking an interest involving loan, but my hatred for banks is greater than my keenness to stick to my religion lol

 

[Deleted member 1006777]

Ontario is like $300 a month. Crazy.

Man ON insurance prices are insane. It's all part of a racket. Build cities in a way that punished people for not owning cars, then squeeze every last penny out of them when they reluctantly buy one. You have to keep the capitalist machine running somehow though.

Canada is a country where I feel not having a car is equivalent to not having a life.

Yeah that's 100% true. The US is pretty much the same. Public infrastructure is laughably bad (richest country in world apparently), and urban sprawl makes your life hell if you don't own a car.

My religion forbids me from taking an interest involving loan

Wait what.. I've never heard of this haha. So in your religion, you can never buy a house unless you pay in cash?

 

[Deleted member 1006777]

Well it depends upon your situation, being a consultant and sole trader( Business ran by single person), When I buy a new car in Australia, I can:

1. Claim back total invoice GST
2. I can asset write off some part of tax.
3. I can claim 30% value of car depreciated in a year.
4. Within two years, I could have saved tax money equivalent of new car's price.
5. I can still sell it all cash for quite a value and repeat

You can still do ALL of that with a used car. The ONLY argument you're making here is that you want to buy a new car and said provisions allow you to justify it. None of these are arguments to buy a new car over a used one. Hey, you like cars, go for it.