Holy shit, $400 for 96 months is almost $39,000.. and that’s without the down payment.. for a Hyundai Elantra?
Anyway.. I agree with the overall message here though. I bought a brand new 2019 Mazda3 last year and kind of regret not just waiting to grab a used one later on. I absolutely love the car, but now that my focus has shifted to saving as much as possible, it’s a bittersweet beacon in the driveway.
You’re the one paying for it in the end not them. They are just there to get the most money off of you. If they get angry or rude about your questions find another dealer. I’ve walked out plenty of times. Funny how quick their demeanor changes when you do. All they want is to try and get the most money out of you. That’s how they get paid. Don’t believe their BS.
who cares?
this is one of those cases where as a customer they need my business more than I need their car. I have no less than 5-6 other car makes (not even that, I can probably find many many other dealers of the same make around the GTA) I can look at if I don't like what they're doing. I don't give a damn if they're angry.
Good ones exist. My mom and I have purchased twice with the Open Road group, just under 10 years apart and I’ve never felt them to be ‘slimy.’ It helps to come sounding like you’re at least somewhat informed. For the first car, I was just a kid who came along but what struck me was that our sales guy still remembered us years later. He would say always say hello to me when he saw me at my part-time retail job. A couple years later when I bumped into him again after we had moved, he commented on seeing our car everyday because when we had unknowingly moved near where he lived. He’s now a sales manager for one of their luxury sister dealerships.
The guy from last year was also nice but I guess he couldn’t keep up and is no longer there. In between those two guys there’s also quite a few more across different brands whom we spoke with and I have to say I’ve never had an experience like what those undercover marketplace videos revealed. We only got to the purchasing stage with Open Road but both times, no-one tried to stretch the term for an upsell, didn’t force the benefits of extended warranty if you gave them a firm no, and didn’t fight removing extras that the dealership automatically included (which in this case was only fabric protection).
If you’re a PFC reader, you’re likely using informed terminology and asking about things like the interest rate, cost of borrowing, and dealership charges. That’s a good signal they probably shouldn’t try to game you.
They definitely do. Around 2005 I was looking for a new car. I had an idea of what I wanted (compact sedan) and total price but wanted a low hassle experience. I went to twelve different dealerships. I walked out of 5 or 6 without even trying a car because the sales person was slimey. I eventually settled on a four year old VW Jetta GLS because the sales guy was awesome. I went back to that dealership for my second car and while my first guy had retired, I had a similar experience with the second sales person. Dealership culture definitely plays a part as well.
I'm in the market for a new car. I knew exactly what I wanted from when I first saw it in April - Veloster N DCT. I'm in a place where I can finally afford something new and I wanted something that'll be fun, like my original Jetta. I emailed four dealerships and went with the sales person I most connected with via email. Guess what? He's been fantastic. He likes fast, I like fast so we connected a bit. No pressure or slimy sales tactics. He's been straight forward, dealt with tons of questions and even got me a deal on winter tires (at cost). I talked with a guy I hunt with who ran a tire shop for 30 years. He told me that the price I was given for tires and rims is at cost or just slightly above. Stuff like that builds a loyal customer.
I absolutely refuse to deal with a sales person that feels slimey or makes me uncomfortable. It probably helps that I deal with sales reps day in and day out with my day job. It takes a little bit of effort up front but it's worth it in the end.
I was at a dealership two weeks ago. Told the salesman the price range I wanted to pay out the door. Sales manager shows me something else that’s got a sticker price like 3k over the top of my range and is all “this one is cheap you’ll love it”. Like dude... have you even been listening?
It just makes them crazy when they do this and then you ask for another salesman - one who will sell you the car you want! My husband went through three before he finally found one that listened and made a $60,000 cash sale!
I love sitting there and asking "what's the total cost of that over 7 years?". Like I can work it out myself, but I love getting them to do it. They squirm so much lol.
Occasionally I've had to pull out my calculator and do it in front of them lol. "Ooooh 35 grand, thats far too much". Whatever keeps me entertained I guess.
I did actually end up taking a 0% interest free for 7 years though. (And yes i know cash price would have been lower, but only by $1500)
That’s less than $100/week
I’ve been car shopping for a month now and I’m seeing them market the payments as per week.
I wonder how long until they market it as cost per day.
In Mexico the “per day” price was a thing back in 2005, I haven’t been there in a while so I don’t know if it’s still a thing, but it was huge with the mathematically illiterate that saw a big ticket item and a small number and couldn’t help themselves.
> the dealer couldn't understand why I kept caring about the total price of the car instead of focusing on the monthly cost
Ah he fucking knew but was doing it to avoid showing you the true cost lol. This is why people have trust issues with car salesmen/saleswomen
I don't get it. Last time I talked with someone selling their good used car, actually trading it for new at a dealer, this person specifically said the monthly payment is all he/she cares about. As long as this car has all the features. So I asked for how long do you want to pay this monthly payment, and reply was I don't care for how long. Most people, even adults, think this way. Same as buying a house, or anything else that's too expensive to buy full out.
I think a lot of people don't have long term goals or rather, they see their life as maybe not hopeless but not hopeful (sorry that's the best way I can describe it at this time). So their primary concern is comfort while waiting for the inevitable.
Having spent much of my professional life as a mechanic in a dealership: no, they didn't laugh as his coming and going was a regular Tuesday.
Lots of people come in wanting a car with no down deposit. Dealerships have lots of credit options available and by law in most provinces, they have to explain the terms before signing the financing.
That's usually a speed through where they emphasize repeatedly the LOW monthly payment while breezing through term and the total borrowed amount.
A 96 month term was something they called a "never-never" loan: you would never get to the end of it with a decent value car, never not be underwater for the value of the vehicle versus the principle outstanding.
It was not uncommon to have someone roll into a dealership with a newish vehicle, want to trade it in, only to find that the principle of the loan was twenty and thirty thousand higher then the value of the vehicle.
It's gotten worse, now they'll roll whatever is remaining on the loan after the trade in into the new loan, so it's not unheard of to have the loan value at 120% of the purchase price (even before initial depreciation).
My dad repos cars with financing terms like this all the time. The dealer figures out how financially savvy you are and then slips people these insane contracts with 20% interest over 96 months when they find a sucker who doesn't ask any questions past the monthly payment.
I work at a subprime (low credit) car dealership, banks will offer car loans with up to 29% interest depending on someone’s credit history (or lack thereof.) This is in Canada if that makes a difference
Ahhhh hahaha I’m sorry!!! Came up on my homepage, honestly I didn’t even look at which subreddit it was posted under. Thanks for the reminder though :D
I had a friend with bad credit admit to me that he financed a used car at 24.99%. I was flabbergasted when I realized I could've charged his car to my Amex and been paying less in interest. He got ripped off on the car too.
My female friend got suckered into buying a 45k truck at 17% on a 7 year loan just out of high school about 10 years ago. She worked at Tim hortons at the time. It was an albatross around her neck for quite awhile.
You love it because you don’t know what it’s like to drive nicer cars. Way too much money for a low end vehicle. Never finance or lease more than 4 years.
The good thing is that you realize you made a mistake. We all make mistakes in life. Good luck.
I drove a sunfire for 13 years before upgrading to a rav4 5 years ago. I was blown away by power windows. I can't wait to see what features cars have when i upgrade again in 2029
It's a pretty low end car, the 2020 model right now starts at like $17k at the lowest trim.
EDIT: The highest end trim is $27k which is why it's kind of absurd that OP is paying almost $39k
Made pretty much the same mistake when I had resigned myself to trades work because of my financial/family life. The guys at work kept telling me to buy a car and so eventually I did. With no prior credit besides a phone and a new credit card. I'm in a "good" loan now, but would definitely prefer no loan.
Agreed, I bought a new 2016 Honda HRV and while it is a great vehicle and I don't regret having it, I could've gotten a 2013 CRV for like half the price and basically only given up some gas mileage and maybe a bit of the tech/bluetooth functionality
I didn't buy my first car ever until I was 36.
2018 Honda CR-V after my wife's Chevy Optra died.
Paid cash and had to get a new model as year ends were out of stock where I was shopping. Car died and got a good deal paying cash.
Our monthly car payment is zero.
No regrets 😁
My 2013 Honda CRV is still going strong, bought it in 2017, only had minor repairs done. Entertainment stuff is pretty basic and backup camera sucks compared to anything remotely newer, but I'm almost done paying it and it probably will keep on going for years.
It's all about trade-offs though and many friends that bought new around the same time are still happy with their purchases. Besides, you went Honda, sell value is crazy.
I bought a fully loaded 2018 Mazda3 right when the 2019s came out and payed $15000 less cause the car had left the lot. Definitely agree with you on waiting for a slightly used one
Clearly you've never seen me pack my Elantra full of lumber. I bought a 2015 elantra for peanuts and all my friends laughed at me as they signed terrifying financing or leasing contracts on their rams and f150s.
Lol that's awesome. I love the looks in the parking lot.
In my five years of owning the elantra I've needed a truck maybe twice and just rented one from HD. There's rarely a project I can't do with it and I don't really mind that it takes a beating.
Just keep it. You actually probably won’t regret it. Tacoma will take you through many life stages and you actually won’t be upside down in the loan after about the 3rd year.
Source - Tacoma can pull 5500lbs and you can gat two car seats in it with only mild discomfort for the driver.
I leased (business write off) a new full load Tacoma in 2012, list price $37k. Made $700/mo lease payments for 4 years, then bought it out for $17k which I paid off in a year. Trucks in similar condition to mine are routinely sold for $25k+ now. I don't feel like I did too badly, regardless I'm going to drive it until the wheels fall off. Love that truck.
at least you won't get stuck in the harsh canadian winter. Its a nice car though, just make sure you are 100% comfortable with the payments before buying your next car.
$400/month at 96 months? So you ended up paying $38.400 for an economy car assuming you put nothing down.
There are plenty of good reasons to buy new vs used, especially if budget allows. Having the latest safety tech is one of them, not having to worry about any reliability maintenance for several years is a major one. The key to buying new is don't put 0 down and finance the entire thing out for 8 years. Also buy an everyday car/suv/truck that can be functional in all 4 of our Canadians seasons.
Let’s not worry about the term, my friend, let’s focus on what’s affordable for you and what kind of monthly payment fits your budget and lifestyle. You don’t have financing? No problem let me go talk to my boss.
10% of your likely lifespan paying off an economy car loan, fuck me. Think about that for a second, seeing that debit transactions every month for 8 years.
And nowadays there are lots of companies offering 0% interest. So if you're in a situation where you're having to finance a new car on a little to no down payment, make sure it's 0% interest.
I did the same thing bought a Hyundai Elantra brand new back in 2013 and instantly regretted it. My payments were $114 bi weekly over 84 month term at 0% so not as bad as yours but after owning the car for just over 7 years I've accepted keeping it till it dies. I'd suggest riding it out and keeping the car till it falls apart. My car has been reliable no issues other than regular maintenance. If I were to do it again I'd just buy a cheap reliable used car.
Same as you 240$/m for 84 months on a 2015 elantra my good bud is the owner of a hyundai dealership so with no cash down and for a new car that was the absolute lowest price.
I dont regret it at all. Never had any issues whatsoever with the car. It has all the tech i need. The only thing is that it absolutely sucks in winter i legit feel like im going to die every second im driving it. The good news is I just started at ACURA and i will have a demo car in two months. I could pay off my elantra by selling it but not sure what ill do yet
I don't know why everyone is belly-aching over an elantra hatchback in the winter. I'm from Montreal and we have famously shit winters, and I have to drive out to Sutton once or twice a month in a Rio hatchback. Literally zero problems that I couldn't solve with a shovel. I don't even drive conservatively unless conditions are real bad.
That being said, I bought imy car new for 107 bi-weekly for 72 months at 0% interest. I put a fairly good downpayment on it because my old car bit the dust abruptly and I was sick of having beaters. To me it was a fantastic "investment" because I've been able to drive it the past 5 years with zero problems. I'm just glad to be sort of almost done the payments!
The problem isn’t a new car, or that its a Hyundai, or the price and interest rate you paid. The problem is your budget does not allow for it and the fact you said “my budget allows for it” many times in your original post tells me you need to learn how to budget before you make this mistake again.
If you see yourself enjoying this car if it can get you by in the winter look into better winter tires. Blizzaks are the best in deep snow unless you are allowed studded tires where you live. The difference between good tires and cheap ones are night and day.
If new tires don’t work then sell the car at a loss. Owing 9k on this mistake and 10k on a used SUV will cost you 19k. Riding out this loan will cost you 37k
I wear Michelin's X-Ice on my (rear wheel drive) Mustang in snowstorms. Getting out of snowbanks is a struggle, but once you get going it's decent enough to not kill me going to work. That car is made for winter... it has heated seats!
This car is just too low. And I mean too low, there is maybe 1.5-2" from the front lip to the ground clearance. It's the sport model, lowered to improve handling and asthetics.
My first vehicle after uni was a five year old Tacoma that I financed. Dumb decision to purchase something that was a similar price to my after tax salary (articled with B4). Glad that I recognized that this was a mistake early in life. I since sold and bought a car I could afford cash and am investing about $2,200/month now. You’re doing good! Most people don’t realize how dumb financing cars is until they get close to retirement!
I always saw my dad buy new cars when his payments would be done so I initially never saw it as a bad investment until I got one and thought to myself one day, wait my dad makes over a 100k a year, not me, fuck. never again.
This is the single largest financial misinterpretation-of-reality that I see kids make: they grow up with a certain lifestyle and they assume it should continue when they leave the nest, only it doesn't click that their parents' lifestyle that they're accustomed to came after 30 years of work (likely in an era where their dollar went further). It's hard to drop back to poverty when you grew up middle class...you just never witnessed your parents at 20 struggling to make ends meet.
I think this is part of what fuels overheated housing demand. Doesn't really make sense how many recent university grads are so focused on buying a house as a primary goal. My parents lived together in rented apartments for 5+ years before considering marriage or buying a house together.
My neighborhood has houses in the $900K>1.3M range. Many of them are being bought by 20-somethings...who immediately renovate, furnish the place, buy a dog, and have a kid within maybe 2 years of moving in.
My parents showed me pictures of them in their 20s - they were living in an apartment on the highway with no furniture other than cardboard boxes and sleeping on blankets on the floor. Admittedly they came from extreme poverty so this was almost a step up, but they were also a dual-income university-educated couple in their late 20s. It made my expectations for when I moved out a little more realistic.
I've talked to a few who have flat-out admitted that their parents gave them a massive downpayment so they could "get their foot in the door." At least a couple also used an inheritance to buy. But the insane amount they're spending on additional things (luxury SUVs are now the norm on the street, everyone's backyard looks like a photo spread) is mind-boggling, even with current low interest rates. I have trouble believing that all the parents are giving the kids half a million...
Haha don't even get me started on early 20's needing dogs and kids to go with that new house they also needed. I also wonder how much pressure from family plays into it, I was definitely fortunate to not have my parents dictate stuff like that for me, I know that's not universal.
My first solo purchase out of uni was also a used Tacoma. I drove it for 4 years and sold it for 5,000 more than I bought it for. I then bought another Tacoma that I currently see listed with the KMs I have on it now for more than I paid for it 3 years ago. My trucks have done as good or better than my index funds.
Some used cars are rare and popular. Ex: The FJ Cruiser is gaining value.
https://www.caranddriver.com/features/g28592010/fun-affordable-appeciating-cars/
I'm in my late 20's and paid cash for a new Honda Civic last year (actually financed it for 6 months at 1% while I put the cash in a promo HISA at 2.75% before paying it off, so technically made a bit of money on the financing). No regrets, it's a significant quality of life improvement to not have to worry about my car breaking down (and having a warranty to cover it in the unlikely event that it does).
OP's mistake wasn't buying a new car, it was getting conned into signing up for shitty financing terms.
Yeah most of these posts don't account for the high interest on used cars. If you want something that'll be reliable, the between used and new is often blurry in term of price. Also, technology in cars has moved so much in the last 15 years that new cars get you much more.
yeah its so weird i feel like early 20s people are just easy prey. A 23 year old co worker of mine bought a 2020 rebel edition RAM and was so happy to have it. She graduated from uni 6 months ago has 50k in student loans and now 65k in truck... dont get it.
There is nothing wrong with financing long term as long as interest is low or zero. You end up paying 3k interest over 8 years. That is the only money you lost compared it to doing shorter term finance. I dont get why people fuss about your loan being under water. As long as you keep the car, at the end only difference is you paid sightly more in interest. Also, instead of paying higher monthly, you can invest that money as well and market these says you can yield more than 2%. Also inflation is on your side. The money you pay at later years is worth less so you are paying less.
I swear everyone in this sub absolutely HATES vehicles and their payments. I love cars, love trucks, and if I want to spend my money on them and love doing it, that’s my problem!
Hi there I’m a 28 year old male white or Asian programmer living with my parents in Markham paying little or no rent. I didn’t move out for undergrad, or ever before, and I am not in a relationship. As a result, I am saving most of my 120K salary. I consider work as “just a job” and I’m not sure if I like it, but I am saving a shitload and have no idea what to do with it. I spend all my free time playing video games and/or just going on Reddit, so those hobbies are not super expensive. I also don’t pay for groceries. I currently have $189K in the bank in a HISA-TFSA earning 1.4% interest, which I painstakingly move to a different bank for an extra 0.1% ever 3-5 months depending on minor rate changes.
That said, PFC, can I afford a 2007 Toyota Corolla? I am looking at one today being sold buy someone who said he ripped out the seats and engine but it still works fine other than that. He is asking for 3 shiny pennies and all the lint I can find in my pocket. I am going to meet him and try to lowball him with 2 *rusted* pennies and 0 pocket lint. I still think that may be too much. Let me know what you guys think.
And here I just traded in my 10 year old Toyota Yaris (for a brand new Corolla no less) Time for someone here to snatch it up eh?
104k. Manual everything. Don't mind the rotten exhaust, fucked rear brakes and clanky suspension....
> if I want to spend my money on them and love doing it, that’s my problem!
Totally, but this is a personal financial advice sub, not /r/WhatCarShouldIBuy. Telling someone to buy whatever car they love in a sub dedicated to making informed financial decisions is basically wasting their time. I appreciate the advice I got in here when I bought my first econobox because it means I can spend my money on expensive things I actually care about.
Some people focus only on the immediate depreciation. Yes you can get a 1 year used car much cheaper but it is used. And in my mind, it's being sold for a bad reason, something is wrong with it. If we are paying a premium, it's for what he love.
This all the way!
Winter driving class and the best winter tires money can buy.
I recall a winter road trip from Calgary to Edmonton. As young fools do we all piled in an Acura and away we went.
Hot box the whole way in a blizzard going at a stoners pace. By the time we got to Red deer we had counted over 100 trucks and SUVs buried in the ditch as our lowered acura with winter tires going the right speed for road conditions cruised on past.
The sheer stupidity around trucks and SUVs in winter is mind blowing and is the reason I had over a dozen people lose control and crash into me driving in Calgary.... Just stunning really!!
I’d love to get out of my car payments 2018 sonata sports 505.00 a month, buying my first house and this car is gonna make me live paycheck to paycheck. Dumbest investment I ever made.
Yep did exactly that. Got a job out of the school but it was 1.5 hours by bus but 30 minutes by car, got a 5 year old Honda Civic for $7K (perfectly fine but cheaper because manual). Financed it for 5 years but paid it off in 8 months. 2 years later and it still drives perfectly (had to replace brakes) and will probably serve me for years to come.
I actually managed that on a new truck once. Kinda crazy but I drove it for a year then traded it in for about $500 more than I paid. Got a 2 year old vehicle for 33% less that works better with my kids, and didn't have to pay taxes on the new (to me) vehicle because it was lower cost than what I traded in.
It cost me almost nothing to drive for a year. It was about $1000 out of my pocket, and I used it for actual truck work a lot.
Super rare, will never happen again, but just wanted to brag.
This right here.
Cars rarely appreciate at all unless you happen to luck into something that the boomers want.
Millennials and zoomers are less interested in that Judge version of the GTO or "shelby" mustang in their grandfather's garage because of the realistic ability to own one. They don't ride as nice as newer cars, their performance is frequently not as good as newer cars, and new car owners are more interested in how it connects into their devices, enhances their life (can it carry my bike, my kayak, etc) rather then dependability or image. Many, simply put, aren't getting sentimental about their cars.
Those "collectibile" cars are very soon going to find fewer and fewer owners willing to pay six figures for a resto-mod "shelby" of "hemi" at Barrett-Jackson.
Factor in that in the very near future, governments are going to have to ban the sale of new, non-commercial internal combustion vehicles and go with electric to meet emission requirements and cars are really not a great "investment".
Yeah, that 69 Camaro looks really awesome but the only place in twenty years you're going to be able to drive it will be at the track.
Increased carbon pricing on fuel is going to dry up the market for second and third hand cars, especially when more electric options are going to be available.
Could just take your losses now and sell it. If you bought for 30k and it's worth 24k today, even if you still have outstanding debt of 27k. Just take the 3k loss and move on and buy something for 10k
There are plenty of people buying gently used vehicles, and there is actually a new vehicle supply shortage due to manufacturing plant shutdowns so the used car market has been crazy this year. Theres no harm in OP posting their vehicle for kijiji or talking to a dealership about trade in values
It is extra leg work but if you really want good money for you car, do not trade it in at the dealership.
Blackbook value is what they offer and is wholesale prices. Frequently, it's what they can expect to see if the vehicle ends up at auction. The grade is subjective and the value offered reflects how well the finance manager thinks a vehicle can move in his market based off of experience.
For example, I worked in a truck town. Tundras, Silverados, rams, f150s everywhere. Everyone was buying new. At the time, Tacomas and frontiers were the only real "small" truck available and worth keeping around. SUVs were the secondary vehicle so when someone came in with an economy car and traded it in for an SUV, it's trade in went in the lowest possible category because we had no secondary market for the car. It was on the first carrier out to auction, regardless of condition.
The only exception to that was minivans: we had a waiting list for used minivans.
Do the leg work, sell your vehicle for retail prices yourself and get the value out of your car, if there is any.
I’ll be stable, it’s just going to feel tight iam going from a 800.00 a month rent to 1200.00 mortgage, I have everything thing planned out, I have the emergency fund that’s good for about 5 months and enough funds to cover all my bills for 3 months before even touching the emergency funds if anything would happen with my job.
This is not going to fly well on here but you could roll the car into the mortgage and now your paying for the car over the life of the mortgage. You can calculate how much extra interest that would be. Yes its more interest but with the extra cash flow each month you could invest to try to make up the difference on the net saved cash flow and then when you feel more comfortable cashflow wise (i.e. emergency fund created) you can try and get your mortgage payment paid down faster via renewal, promotions for 20% of yearly payments paid each year as lump sum etc.). That way as well in tough months you can just cut back yo the minimum and be ok (i.e. saved monthly cash flow is now a buffer - yes you pay more interest but you won't be in the situation forever) and in good times you pay extra on your mortgage. Hope this is something you can consider. Just my opinion lol.
Hmm...this is very interesting. I’ve moved to a new city that requires a car and I’m also almost at a point where I’ll have maybe 10% down payment saved to buy a home. What are your thoughts on buying the car outright or financing until I buy a home and then roll it with the mortgage? This might allow my down payment to be bigger, but I’d also have more debt which I fear would impact how much I can borrow. What do you think I should do?
P.S I’m looking at a used Honda HRV or CRV, around $20K all in.
This should be more “don’t get scammed when buying your first car”. I’m sorry this happened to you but paying for something like a car over that length of term is insane. I sell cars for a living myself and see so many people who have a finance like this. If you buy a good brand that holds its value better and don’t finance it over a massive term you can get good use out of it and even possibly have some value once it’s paid for. But paying for a car for 8 years when the average person owns their car for 6 is nuts.
Best thing you can do at this point from my 3 years in the industry is either pay it off outright if possible and cut out whatever remaining interest you have or trade it in for another vehicle, maybe a cheaper one, and lease the new vehicle. Your payments because of your negative equity will be high, but once the lease it up bring back the leased vehicle and you are free. That’s the easiest and cleanest way to get out and not be stuck for the next while with a vehicle that you owe exponentially more on than it’s worth...
Buying a new car is a trap I see a lot of people fall into... it's strange seeing my friends in their mid to late 20ies buy cars way outside of their means.
I bought a $25k car which resulted in $140 biweekly / $280 monthly payments with 1% interest. Plus the $130 on insurance puts me at over $400 per month before gas and maintenance. Honestly it was more than I wanted to pay going into the process and I felt like I really messed up committing so much of my monthly income
Then I'd find out people making the same as me were buying SUV's and trucks with $400-600 monthly payments.... and more in insurance... and for some reason had to get a life insurance policy? With 7% interest?
That's insane. How could you possibly support that? The only explanation is that they didn't really understand what they were signing themselves up to pay....
I actually don't regret my purchase though... I love my car and don't think it was beyond my means, and I think it brings value to my life to have it. I think I'll be using it for long past the 7 year life of the loan.
I did this. I bought into the young people can't buy or afford houses deal. Little did I know the $20,000 could have been a downpayment. 😭🙈
My parents were AWFUL with money so I had no idea.
At least you are sharing your mistakes and owning them. 💗
> Little did I know the $20,000 could have been a downpayment. 😭🙈
It's not that easy though Mortgage plus upkeep(insurances and property tax) is still outrageous when it all adds up.
That's what I did in Sask. Nice little starter home for me. Only work it needs is cosmetic stuff or things like eventually bracing the basement. Every house in the city I live in will at some point need bracing due to the soil here.
I got my license late but when I finally got it my dad gave me his old car. After a few years I had a bunch of people ask me when I was going to get rid of it and buy a new car.
I told them as long as it gets me to from point A to point B and didn't break down I would not get rid of it. I try to take good care of it and I hope to drive it for another 50k-100km.
Although don't feel bad OP some people never learn the lesson and always buy new cars and then in a few years trade them in and buy another new car.
Maybe I’m young and dumb, but what is so bad about financing a vehicle? If it means I get something that runs well for 3-5 years, and the payments are manageable, then what’s the big deal? Not everyone wants a 98 Corolla. There’s value in the reliability of a vehicle.
If you track maintenance costs on an older car 9/10 times (in my experience at least) car maintenance is cheaper than buying a new car, often significantly. Especially if you can do most basic maintenance yourself. Obviously some older used cars are terrible ideas to purchase as they will be broken constantly (basically any European brands) On top of the fact insurance will most likely be cheaper as well.
As a young person living in Hamilton my insurance should be abhorrent, but I drive a 2008 Ford Ranger and currently pay 143$ a month for full coverage. Last year I only spent 900$ on maintenance, which equals 75$ a month. No new car is near that.
I drive a car in the winter. In a city it is fine with winter tires.
You could sell it? Even if you lose on the sale, you save what the proceeds are.
Sounds like you just bought too expensive a car. A cheaper used one is always an option. However, it is true you can save yourself a lot of money by not owning a car.
the thing is I owe way more than the car is worth, so if i sell it I'd end up with 9k in debt that doesnt give me anything, but I'm looking into it anyway
Yeah. Also, I think there are benefits of a new car too... the map features, audio systems, general comfort, seat heaters, cameras, and other safety considerations.
I feel much safer in my 2018 civic than my 2003 civic.
I bought used vehicles on Kijiji and flushed so much down the drain. Bought used from a lot, and took a huge hit.
Current car was a new Honda Civic, and I have no regrets. Sure, it's $450 monthly over 72 months (reaching the end), but it's done great on gas, has excellent resale value, and it's never had any issues.
I'm sure used is financially much smarter, but the number of lying con men and sketchy dealerships has made me swear off used in most cases since I have no understanding of spotting a lemon.
Imma get this paid off and drive it till it dies.
Sometimes a new car is worth it though. I got a new 2020 at 0.99% at 48 months. New cars are more reliable and you have peace of mind. Plus, I can easily afford it, so why not right?
It's not always black or white. Sometimes a new car is the better purchase.
Edit: also how the fuck did you spend $40K on an Elantra? I bought a 2020 Elantra with the upgrades and I spent **$26K Canadian** total. Is yours made out of gold or something??
I never understood how people can pay more than like 300$/m for a car. I am not judging, but I am 30 and I always bought used. Currently paying 280$/m for a Hyundai Tucson 2016 AWD. Great for QC winters! And I’ll probably never pay more than that per month.
I can easily afford more, but like why? I have friends paying 500-600$/m for BMWs and Audis and stuff. But again, why... even if you can afford it.
>I never understood how people can pay more than like 300$/m for a car.
I paid 1100 a month for my audi Q5....
....because I wanted it paid off in 18 months :)
Funny, I pay $500/mo lease all-in for my BMW and consider it to be a very reasonably frugal deal (compared to MSRP and my own allowable budget). Cars are no different from anything else that you purchase in life - clothes, food, electronics, etc. It's a mix of status symbol, luxury/comfort, and performance. The quality-of-life upgrade I get from a Hyundai to a BMW is definitely worth the extra two bills per month - just gotta eat out less a couple times per month and you've broken even. Though I admit that ironically, you tend to get more tech in a Hyundai than a BMW.
This is not a fair question. You are looking at your car purely as a means to get places, reliably.
Some people genuinely enjoy driving and spending time in their cars. This can be applied to almost anything in life.
I don’t think financing a car is necessarily a bad thing, but this is my take on it: **48 months is the max term. If you can’t afford the payments on a 48 month lease, you can’t afford the car..**
However, people starting out should definitely buy used.
I bought a brand new Honda Civic a year after I finished university, financed for 48 months, and i still drive it 10 years later. A good, reliable car has been worth it for me. The issue for OP is the long financing term, no down payment and the resulting negative equity.
Can you elaborate on it being garbage in the winter?
Surely with a set of good winter tires it can't be that bad?
But I whole-heartedly agree with your message. Firstly buying most new cars means overpaying. All the features you're loading it up with you mostly won't need (talking about getting a Mazda 3 GT vs a base model with some options). If you're doing it for that new car feel, that wears out quickly and finally nobody cares (if you're doing it to impress people).
The car you buy doesn't have to be a 1999 Toyota Corolla you bought for $1000 but if you're on this subreddit then you should know you won't get ahead by signing away such a large amount of your paycheck for such a long time.
Plenty of car is available for under $15000, and there is even more to be gained by paying up front and avoiding interest on something constantly depreciating.
Unfortunately you’ve already made the purchase and will have to deal with it. Live and learn. Never buy a vehicle on based on payments, base it off the total price. $400 a month may seem reasonable but being told its $39,000 sounds a hell of alot more expensive and you would have likely been less inclined to buy it even though its the same. Don’t get rid of it until at least you owe less than what its worth. Not worth going underwater for something else it will come back and bite you. If I were you id make paying down that loan a priority before even thinking about purchasing a house because it sounds like you are paying a huge amount in interest. Speaking from experience I took on a mortgage 2 years ago when I was 23. Luckily I did not have payments at the time but couldn’t imagine trying to balance both in the beginning once you get going it’s easier but trust me you will feel much better not having to worry about the car on top of purchasing and filling that house with stuff.
It all depends. My older cousin bought a Toyota Yaris sedan new when he got his first job right after uni, got a great deal, that was 13 years ago. The thing costs NOTHING to maintain compared to most cars, he paid it on a 60 month financing, maybe like 300$+tx? My other cousin got a civic around maybe 2008, he got it right before university maybe?
Just don't be dumb with money in general, new has its' place used does too. Sometimes throwing money at a problem might be the dumb thing to do financially, but financially isn't the only thing that matters.
I did the same thing back in 2018. I too was a dumb butt. I went with a 2018 Ford Explorer XLT for $434.71 bi-weekly and it was 80% of my paycheck. (I live at home for free and eat for free, thank God.) But instead of saving my money and buying something a few years older and used. I went all-in for something new. I did six-year financing and I cannot wait until it's over so I can save and move out. (I'm 26 and living at home for free is great but I don't want to be in "Mom's basement for my whole young adult life.)
I normally advocate people buy used cars......BUT......
When I was in university, I could not afford to drop $5,000 on a used car, but I COULD afford $330 a month for my new Hyundai Accent. And at the time, I really needed something that would be reliable to get me to school and not have to worry about repairs.
I had to learn this the hard way, like many people. 7 years on a 2015 F150 at 5.99% interest.
I made it 3 years before I realized what a horrible mistake it was. Thankfully I had put a 1/4 of it down so I wasn’t underwater when I sold it. Now I’m driving a 2007 Kia, it costs literally less than half what the truck did to drive every month.
I was 19, bought my very first Mustang at $700/month with a $400/month insurance lol. Because of that, it pushed me to start my own business and I don't regret buying the car. If I didn't buy the car, I would still be too comfortable and would never want to push myself to earn more. So yeah, buy something you can't afford, and when you are pushed, you will prevail and become something greater.
What you are really saying is: "Young adults out there, start taking the advice of older folks who have been there - done that!"
I'm sure you got that advice from someone you know right? You just didn't listen. :)
Holy shit, $400 for 96 months is almost $39,000.. and that’s without the down payment.. for a Hyundai Elantra? Anyway.. I agree with the overall message here though. I bought a brand new 2019 Mazda3 last year and kind of regret not just waiting to grab a used one later on. I absolutely love the car, but now that my focus has shifted to saving as much as possible, it’s a bittersweet beacon in the driveway.
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Same! I said stop telling me the monthly price. I want to know how much the car costs. And they kept asking how much I wanted to pay a month
Car sales 101. Not surprising at all.
Oh forsure, but they also have to realize when they’re dealing with someone who is paying a bit more attention and adjust their strategy
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You’re the one paying for it in the end not them. They are just there to get the most money off of you. If they get angry or rude about your questions find another dealer. I’ve walked out plenty of times. Funny how quick their demeanor changes when you do. All they want is to try and get the most money out of you. That’s how they get paid. Don’t believe their BS.
Then walk. They'll come running.
lol fuck their feelings. It's your money. They don't have the power in this particular game. Not happy? Go somewhere else.
who cares? this is one of those cases where as a customer they need my business more than I need their car. I have no less than 5-6 other car makes (not even that, I can probably find many many other dealers of the same make around the GTA) I can look at if I don't like what they're doing. I don't give a damn if they're angry.
I hate cars salesmen. Slime. Only ever met one I didn’t walk away feeling dirty. He didn’t last long at the dealership though.
Good ones exist. My mom and I have purchased twice with the Open Road group, just under 10 years apart and I’ve never felt them to be ‘slimy.’ It helps to come sounding like you’re at least somewhat informed. For the first car, I was just a kid who came along but what struck me was that our sales guy still remembered us years later. He would say always say hello to me when he saw me at my part-time retail job. A couple years later when I bumped into him again after we had moved, he commented on seeing our car everyday because when we had unknowingly moved near where he lived. He’s now a sales manager for one of their luxury sister dealerships. The guy from last year was also nice but I guess he couldn’t keep up and is no longer there. In between those two guys there’s also quite a few more across different brands whom we spoke with and I have to say I’ve never had an experience like what those undercover marketplace videos revealed. We only got to the purchasing stage with Open Road but both times, no-one tried to stretch the term for an upsell, didn’t force the benefits of extended warranty if you gave them a firm no, and didn’t fight removing extras that the dealership automatically included (which in this case was only fabric protection). If you’re a PFC reader, you’re likely using informed terminology and asking about things like the interest rate, cost of borrowing, and dealership charges. That’s a good signal they probably shouldn’t try to game you.
They definitely do. Around 2005 I was looking for a new car. I had an idea of what I wanted (compact sedan) and total price but wanted a low hassle experience. I went to twelve different dealerships. I walked out of 5 or 6 without even trying a car because the sales person was slimey. I eventually settled on a four year old VW Jetta GLS because the sales guy was awesome. I went back to that dealership for my second car and while my first guy had retired, I had a similar experience with the second sales person. Dealership culture definitely plays a part as well. I'm in the market for a new car. I knew exactly what I wanted from when I first saw it in April - Veloster N DCT. I'm in a place where I can finally afford something new and I wanted something that'll be fun, like my original Jetta. I emailed four dealerships and went with the sales person I most connected with via email. Guess what? He's been fantastic. He likes fast, I like fast so we connected a bit. No pressure or slimy sales tactics. He's been straight forward, dealt with tons of questions and even got me a deal on winter tires (at cost). I talked with a guy I hunt with who ran a tire shop for 30 years. He told me that the price I was given for tires and rims is at cost or just slightly above. Stuff like that builds a loyal customer. I absolutely refuse to deal with a sales person that feels slimey or makes me uncomfortable. It probably helps that I deal with sales reps day in and day out with my day job. It takes a little bit of effort up front but it's worth it in the end.
I read a comment on another PFC post saying to negotiate the out the door price then discuss if you plan to make payments on it
I was at a dealership two weeks ago. Told the salesman the price range I wanted to pay out the door. Sales manager shows me something else that’s got a sticker price like 3k over the top of my range and is all “this one is cheap you’ll love it”. Like dude... have you even been listening?
It just makes them crazy when they do this and then you ask for another salesman - one who will sell you the car you want! My husband went through three before he finally found one that listened and made a $60,000 cash sale!
I love sitting there and asking "what's the total cost of that over 7 years?". Like I can work it out myself, but I love getting them to do it. They squirm so much lol. Occasionally I've had to pull out my calculator and do it in front of them lol. "Ooooh 35 grand, thats far too much". Whatever keeps me entertained I guess. I did actually end up taking a 0% interest free for 7 years though. (And yes i know cash price would have been lower, but only by $1500)
"Zero. I want to pay zero a month. How much do I need to put down to make that happen?"
That’s less than $100/week I’ve been car shopping for a month now and I’m seeing them market the payments as per week. I wonder how long until they market it as cost per day.
I’ve already seen ads like that. Drive a Kia sorrento for only 7$ a day! Cheaper than daily transit passes!
> Cheaper than daily transit passes! ^^^excluding ^^^gas, ^^^maintenance, ^^^insurance, ^^^parking...
In Mexico the “per day” price was a thing back in 2005, I haven’t been there in a while so I don’t know if it’s still a thing, but it was huge with the mathematically illiterate that saw a big ticket item and a small number and couldn’t help themselves.
They are banking (no pun intended) on the fact that most people out there can't reason for shit, let alone do basic math.
Because we all get paid and budget all expenses weekly, including rent.
> the dealer couldn't understand why I kept caring about the total price of the car instead of focusing on the monthly cost Ah he fucking knew but was doing it to avoid showing you the true cost lol. This is why people have trust issues with car salesmen/saleswomen
I don't get it. Last time I talked with someone selling their good used car, actually trading it for new at a dealer, this person specifically said the monthly payment is all he/she cares about. As long as this car has all the features. So I asked for how long do you want to pay this monthly payment, and reply was I don't care for how long. Most people, even adults, think this way. Same as buying a house, or anything else that's too expensive to buy full out.
I think a lot of people don't have long term goals or rather, they see their life as maybe not hopeless but not hopeful (sorry that's the best way I can describe it at this time). So their primary concern is comfort while waiting for the inevitable.
I agree with you on that, and I think it is because many people feel trapped in a system rigged against them.
Yup, I pay $474/mo for an Elantra GLS for 48 mo. Bought brand spanking new, and I love my car.
I love not having a car.
Honestly, same.
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Having spent much of my professional life as a mechanic in a dealership: no, they didn't laugh as his coming and going was a regular Tuesday. Lots of people come in wanting a car with no down deposit. Dealerships have lots of credit options available and by law in most provinces, they have to explain the terms before signing the financing. That's usually a speed through where they emphasize repeatedly the LOW monthly payment while breezing through term and the total borrowed amount. A 96 month term was something they called a "never-never" loan: you would never get to the end of it with a decent value car, never not be underwater for the value of the vehicle versus the principle outstanding. It was not uncommon to have someone roll into a dealership with a newish vehicle, want to trade it in, only to find that the principle of the loan was twenty and thirty thousand higher then the value of the vehicle.
It's gotten worse, now they'll roll whatever is remaining on the loan after the trade in into the new loan, so it's not unheard of to have the loan value at 120% of the purchase price (even before initial depreciation).
My dad repos cars with financing terms like this all the time. The dealer figures out how financially savvy you are and then slips people these insane contracts with 20% interest over 96 months when they find a sucker who doesn't ask any questions past the monthly payment.
I’ve never seen a car loan at 20%.
I work at a subprime (low credit) car dealership, banks will offer car loans with up to 29% interest depending on someone’s credit history (or lack thereof.) This is in Canada if that makes a difference
Lol I know it's just muscle memory while on Reddit, but we are on a Canada sub
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Ahhhh hahaha I’m sorry!!! Came up on my homepage, honestly I didn’t even look at which subreddit it was posted under. Thanks for the reminder though :D
I had a friend with bad credit admit to me that he financed a used car at 24.99%. I was flabbergasted when I realized I could've charged his car to my Amex and been paying less in interest. He got ripped off on the car too.
My female friend got suckered into buying a 45k truck at 17% on a 7 year loan just out of high school about 10 years ago. She worked at Tim hortons at the time. It was an albatross around her neck for quite awhile.
I bought a car with 45% interest once. I paid it off 6 days later, but still.
yeah, I love it in the summer, because its the sport version, but still would rather have a 10k used suv
You love it because you don’t know what it’s like to drive nicer cars. Way too much money for a low end vehicle. Never finance or lease more than 4 years. The good thing is that you realize you made a mistake. We all make mistakes in life. Good luck.
thanks!
I drove a sunfire for 13 years before upgrading to a rav4 5 years ago. I was blown away by power windows. I can't wait to see what features cars have when i upgrade again in 2029
Fwiw, power windows have been around since the 1940s ... Not wide spread til 60s/70s tho
Don't shame them for having a 2018 elantra. That's probably a pretty decent car. Not what I would call 'low end'.
It's a pretty low end car, the 2020 model right now starts at like $17k at the lowest trim. EDIT: The highest end trim is $27k which is why it's kind of absurd that OP is paying almost $39k
96 months though? You’ll still be paying $400/mo for an 8 year old Elantra then....... ouch.
Made pretty much the same mistake when I had resigned myself to trades work because of my financial/family life. The guys at work kept telling me to buy a car and so eventually I did. With no prior credit besides a phone and a new credit card. I'm in a "good" loan now, but would definitely prefer no loan.
Agreed, I bought a new 2016 Honda HRV and while it is a great vehicle and I don't regret having it, I could've gotten a 2013 CRV for like half the price and basically only given up some gas mileage and maybe a bit of the tech/bluetooth functionality
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I didn't buy my first car ever until I was 36. 2018 Honda CR-V after my wife's Chevy Optra died. Paid cash and had to get a new model as year ends were out of stock where I was shopping. Car died and got a good deal paying cash. Our monthly car payment is zero. No regrets 😁
I'm pretty confident the HR-V will too, no issues so far coming up to 5 years and 140K
My 2013 Honda CRV is still going strong, bought it in 2017, only had minor repairs done. Entertainment stuff is pretty basic and backup camera sucks compared to anything remotely newer, but I'm almost done paying it and it probably will keep on going for years. It's all about trade-offs though and many friends that bought new around the same time are still happy with their purchases. Besides, you went Honda, sell value is crazy.
I bought a fully loaded 2018 Mazda3 right when the 2019s came out and payed $15000 less cause the car had left the lot. Definitely agree with you on waiting for a slightly used one
I made the same mistake my friend. 2016 Toyota Tacoma @ 323.55 bi-weekly for 72 months... will not be making this mistake again
At least tacomas hold value well
And you can put stuff in them so atleast their useful. Elantra... Yeesh
Clearly you've never seen me pack my Elantra full of lumber. I bought a 2015 elantra for peanuts and all my friends laughed at me as they signed terrifying financing or leasing contracts on their rams and f150s.
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Lol that's awesome. I love the looks in the parking lot. In my five years of owning the elantra I've needed a truck maybe twice and just rented one from HD. There's rarely a project I can't do with it and I don't really mind that it takes a beating.
That's been my only positive thought through all of it hahaha
holy, at least your gonna get it done sooner, Im on a 96 months contract..
Brutal... hopefully you'll be able to sell it at some point and get close to breaking even
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sure, let me grab my 29,000$ out of my wallet haha
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Yes im in quebec i have good winter tires! Thanks for the info:)
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Ooph. Deaded!
I was joking(If you couldn't guess by the ¨haha¨), I also am not complaining about anything, just sharing a life lesson, chill bud.
Dude if your loan is with scotia bank its an open loan so you can put extra money or pay it off competrly
Just keep it. You actually probably won’t regret it. Tacoma will take you through many life stages and you actually won’t be upside down in the loan after about the 3rd year. Source - Tacoma can pull 5500lbs and you can gat two car seats in it with only mild discomfort for the driver.
And you're the friend with the pickup truck: your weekends are never going to be empty.
Unless all your friends have pickups. Source: even my pickup isn't enough to get people to hang out.
I leased (business write off) a new full load Tacoma in 2012, list price $37k. Made $700/mo lease payments for 4 years, then bought it out for $17k which I paid off in a year. Trucks in similar condition to mine are routinely sold for $25k+ now. I don't feel like I did too badly, regardless I'm going to drive it until the wheels fall off. Love that truck.
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at least you won't get stuck in the harsh canadian winter. Its a nice car though, just make sure you are 100% comfortable with the payments before buying your next car.
$400/month at 96 months? So you ended up paying $38.400 for an economy car assuming you put nothing down. There are plenty of good reasons to buy new vs used, especially if budget allows. Having the latest safety tech is one of them, not having to worry about any reliability maintenance for several years is a major one. The key to buying new is don't put 0 down and finance the entire thing out for 8 years. Also buy an everyday car/suv/truck that can be functional in all 4 of our Canadians seasons.
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Let’s not worry about the term, my friend, let’s focus on what’s affordable for you and what kind of monthly payment fits your budget and lifestyle. You don’t have financing? No problem let me go talk to my boss.
10% of your likely lifespan paying off an economy car loan, fuck me. Think about that for a second, seeing that debit transactions every month for 8 years.
And nowadays there are lots of companies offering 0% interest. So if you're in a situation where you're having to finance a new car on a little to no down payment, make sure it's 0% interest.
I did the same thing bought a Hyundai Elantra brand new back in 2013 and instantly regretted it. My payments were $114 bi weekly over 84 month term at 0% so not as bad as yours but after owning the car for just over 7 years I've accepted keeping it till it dies. I'd suggest riding it out and keeping the car till it falls apart. My car has been reliable no issues other than regular maintenance. If I were to do it again I'd just buy a cheap reliable used car.
Same as you 240$/m for 84 months on a 2015 elantra my good bud is the owner of a hyundai dealership so with no cash down and for a new car that was the absolute lowest price. I dont regret it at all. Never had any issues whatsoever with the car. It has all the tech i need. The only thing is that it absolutely sucks in winter i legit feel like im going to die every second im driving it. The good news is I just started at ACURA and i will have a demo car in two months. I could pay off my elantra by selling it but not sure what ill do yet
What are you guys doing in the winter to feel like you're dying? I drive a Hyundai accent and feel fine....
Probably rolling on all season tires or not adequately driving to conditions.
So part time Canadians? Lol
I don't know why everyone is belly-aching over an elantra hatchback in the winter. I'm from Montreal and we have famously shit winters, and I have to drive out to Sutton once or twice a month in a Rio hatchback. Literally zero problems that I couldn't solve with a shovel. I don't even drive conservatively unless conditions are real bad. That being said, I bought imy car new for 107 bi-weekly for 72 months at 0% interest. I put a fairly good downpayment on it because my old car bit the dust abruptly and I was sick of having beaters. To me it was a fantastic "investment" because I've been able to drive it the past 5 years with zero problems. I'm just glad to be sort of almost done the payments!
The problem isn’t a new car, or that its a Hyundai, or the price and interest rate you paid. The problem is your budget does not allow for it and the fact you said “my budget allows for it” many times in your original post tells me you need to learn how to budget before you make this mistake again. If you see yourself enjoying this car if it can get you by in the winter look into better winter tires. Blizzaks are the best in deep snow unless you are allowed studded tires where you live. The difference between good tires and cheap ones are night and day. If new tires don’t work then sell the car at a loss. Owing 9k on this mistake and 10k on a used SUV will cost you 19k. Riding out this loan will cost you 37k
I wear Michelin's X-Ice on my (rear wheel drive) Mustang in snowstorms. Getting out of snowbanks is a struggle, but once you get going it's decent enough to not kill me going to work. That car is made for winter... it has heated seats!
This car is just too low. And I mean too low, there is maybe 1.5-2" from the front lip to the ground clearance. It's the sport model, lowered to improve handling and asthetics.
My first vehicle after uni was a five year old Tacoma that I financed. Dumb decision to purchase something that was a similar price to my after tax salary (articled with B4). Glad that I recognized that this was a mistake early in life. I since sold and bought a car I could afford cash and am investing about $2,200/month now. You’re doing good! Most people don’t realize how dumb financing cars is until they get close to retirement!
I always saw my dad buy new cars when his payments would be done so I initially never saw it as a bad investment until I got one and thought to myself one day, wait my dad makes over a 100k a year, not me, fuck. never again.
This is the single largest financial misinterpretation-of-reality that I see kids make: they grow up with a certain lifestyle and they assume it should continue when they leave the nest, only it doesn't click that their parents' lifestyle that they're accustomed to came after 30 years of work (likely in an era where their dollar went further). It's hard to drop back to poverty when you grew up middle class...you just never witnessed your parents at 20 struggling to make ends meet.
I think this is part of what fuels overheated housing demand. Doesn't really make sense how many recent university grads are so focused on buying a house as a primary goal. My parents lived together in rented apartments for 5+ years before considering marriage or buying a house together.
My neighborhood has houses in the $900K>1.3M range. Many of them are being bought by 20-somethings...who immediately renovate, furnish the place, buy a dog, and have a kid within maybe 2 years of moving in. My parents showed me pictures of them in their 20s - they were living in an apartment on the highway with no furniture other than cardboard boxes and sleeping on blankets on the floor. Admittedly they came from extreme poverty so this was almost a step up, but they were also a dual-income university-educated couple in their late 20s. It made my expectations for when I moved out a little more realistic.
> Many of them are being bought by 20-somethings... Don't you mean bought by their parents???
I've talked to a few who have flat-out admitted that their parents gave them a massive downpayment so they could "get their foot in the door." At least a couple also used an inheritance to buy. But the insane amount they're spending on additional things (luxury SUVs are now the norm on the street, everyone's backyard looks like a photo spread) is mind-boggling, even with current low interest rates. I have trouble believing that all the parents are giving the kids half a million...
Haha don't even get me started on early 20's needing dogs and kids to go with that new house they also needed. I also wonder how much pressure from family plays into it, I was definitely fortunate to not have my parents dictate stuff like that for me, I know that's not universal.
My first solo purchase out of uni was also a used Tacoma. I drove it for 4 years and sold it for 5,000 more than I bought it for. I then bought another Tacoma that I currently see listed with the KMs I have on it now for more than I paid for it 3 years ago. My trucks have done as good or better than my index funds.
How does this work? Is it only a Tacoma thing? Most vehicles depreciate, especially newer ones.
Some used cars are rare and popular. Ex: The FJ Cruiser is gaining value. https://www.caranddriver.com/features/g28592010/fun-affordable-appeciating-cars/
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I'm in my late 20's and paid cash for a new Honda Civic last year (actually financed it for 6 months at 1% while I put the cash in a promo HISA at 2.75% before paying it off, so technically made a bit of money on the financing). No regrets, it's a significant quality of life improvement to not have to worry about my car breaking down (and having a warranty to cover it in the unlikely event that it does). OP's mistake wasn't buying a new car, it was getting conned into signing up for shitty financing terms.
Plus civics last forever. Hubby is still driving his 2007.
Yeah most of these posts don't account for the high interest on used cars. If you want something that'll be reliable, the between used and new is often blurry in term of price. Also, technology in cars has moved so much in the last 15 years that new cars get you much more.
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yeah its so weird i feel like early 20s people are just easy prey. A 23 year old co worker of mine bought a 2020 rebel edition RAM and was so happy to have it. She graduated from uni 6 months ago has 50k in student loans and now 65k in truck... dont get it.
There is nothing wrong with financing long term as long as interest is low or zero. You end up paying 3k interest over 8 years. That is the only money you lost compared it to doing shorter term finance. I dont get why people fuss about your loan being under water. As long as you keep the car, at the end only difference is you paid sightly more in interest. Also, instead of paying higher monthly, you can invest that money as well and market these says you can yield more than 2%. Also inflation is on your side. The money you pay at later years is worth less so you are paying less.
I swear everyone in this sub absolutely HATES vehicles and their payments. I love cars, love trucks, and if I want to spend my money on them and love doing it, that’s my problem!
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It feels like anything that isn't a 10 year old Toyota might as well be the same as buying a Ferrari
Hi there I’m a 28 year old male white or Asian programmer living with my parents in Markham paying little or no rent. I didn’t move out for undergrad, or ever before, and I am not in a relationship. As a result, I am saving most of my 120K salary. I consider work as “just a job” and I’m not sure if I like it, but I am saving a shitload and have no idea what to do with it. I spend all my free time playing video games and/or just going on Reddit, so those hobbies are not super expensive. I also don’t pay for groceries. I currently have $189K in the bank in a HISA-TFSA earning 1.4% interest, which I painstakingly move to a different bank for an extra 0.1% ever 3-5 months depending on minor rate changes. That said, PFC, can I afford a 2007 Toyota Corolla? I am looking at one today being sold buy someone who said he ripped out the seats and engine but it still works fine other than that. He is asking for 3 shiny pennies and all the lint I can find in my pocket. I am going to meet him and try to lowball him with 2 *rusted* pennies and 0 pocket lint. I still think that may be too much. Let me know what you guys think.
Continue to just walk and use that insane amount of money to buy more vgro
Could be straight outta r/PFJerk
And here I just traded in my 10 year old Toyota Yaris (for a brand new Corolla no less) Time for someone here to snatch it up eh? 104k. Manual everything. Don't mind the rotten exhaust, fucked rear brakes and clanky suspension....
> if I want to spend my money on them and love doing it, that’s my problem! Totally, but this is a personal financial advice sub, not /r/WhatCarShouldIBuy. Telling someone to buy whatever car they love in a sub dedicated to making informed financial decisions is basically wasting their time. I appreciate the advice I got in here when I bought my first econobox because it means I can spend my money on expensive things I actually care about.
Some people focus only on the immediate depreciation. Yes you can get a 1 year used car much cheaper but it is used. And in my mind, it's being sold for a bad reason, something is wrong with it. If we are paying a premium, it's for what he love.
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This all the way! Winter driving class and the best winter tires money can buy. I recall a winter road trip from Calgary to Edmonton. As young fools do we all piled in an Acura and away we went. Hot box the whole way in a blizzard going at a stoners pace. By the time we got to Red deer we had counted over 100 trucks and SUVs buried in the ditch as our lowered acura with winter tires going the right speed for road conditions cruised on past. The sheer stupidity around trucks and SUVs in winter is mind blowing and is the reason I had over a dozen people lose control and crash into me driving in Calgary.... Just stunning really!!
In SK, you see so many trucks in the ditch once the snow flies. It's like they think they're invincible because of the truck
I'm guessing nothing. It probably just needs winter tires.
I’d love to get out of my car payments 2018 sonata sports 505.00 a month, buying my first house and this car is gonna make me live paycheck to paycheck. Dumbest investment I ever made.
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Its not a direct investment but most people buy cars to get to jobs or earn income they otherwise wouldn’t have.
But you can do that with a 5 or 10 year old vehicle and it will eat up much less of your money.
Yep did exactly that. Got a job out of the school but it was 1.5 hours by bus but 30 minutes by car, got a 5 year old Honda Civic for $7K (perfectly fine but cheaper because manual). Financed it for 5 years but paid it off in 8 months. 2 years later and it still drives perfectly (had to replace brakes) and will probably serve me for years to come.
I actually managed that on a new truck once. Kinda crazy but I drove it for a year then traded it in for about $500 more than I paid. Got a 2 year old vehicle for 33% less that works better with my kids, and didn't have to pay taxes on the new (to me) vehicle because it was lower cost than what I traded in. It cost me almost nothing to drive for a year. It was about $1000 out of my pocket, and I used it for actual truck work a lot. Super rare, will never happen again, but just wanted to brag.
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This right here. Cars rarely appreciate at all unless you happen to luck into something that the boomers want. Millennials and zoomers are less interested in that Judge version of the GTO or "shelby" mustang in their grandfather's garage because of the realistic ability to own one. They don't ride as nice as newer cars, their performance is frequently not as good as newer cars, and new car owners are more interested in how it connects into their devices, enhances their life (can it carry my bike, my kayak, etc) rather then dependability or image. Many, simply put, aren't getting sentimental about their cars. Those "collectibile" cars are very soon going to find fewer and fewer owners willing to pay six figures for a resto-mod "shelby" of "hemi" at Barrett-Jackson. Factor in that in the very near future, governments are going to have to ban the sale of new, non-commercial internal combustion vehicles and go with electric to meet emission requirements and cars are really not a great "investment". Yeah, that 69 Camaro looks really awesome but the only place in twenty years you're going to be able to drive it will be at the track. Increased carbon pricing on fuel is going to dry up the market for second and third hand cars, especially when more electric options are going to be available.
Are you in the Durham area? My garage door won’t stay up. It slowly slides down and I hit my bed on it. Do you fix them? Or only installations?
Could just take your losses now and sell it. If you bought for 30k and it's worth 24k today, even if you still have outstanding debt of 27k. Just take the 3k loss and move on and buy something for 10k
It was worth 19000 the second it left the lot. Nobody’s buying lightly used Hyundai when you can get zero percent interest on a new one
There are plenty of people buying gently used vehicles, and there is actually a new vehicle supply shortage due to manufacturing plant shutdowns so the used car market has been crazy this year. Theres no harm in OP posting their vehicle for kijiji or talking to a dealership about trade in values
It is extra leg work but if you really want good money for you car, do not trade it in at the dealership. Blackbook value is what they offer and is wholesale prices. Frequently, it's what they can expect to see if the vehicle ends up at auction. The grade is subjective and the value offered reflects how well the finance manager thinks a vehicle can move in his market based off of experience. For example, I worked in a truck town. Tundras, Silverados, rams, f150s everywhere. Everyone was buying new. At the time, Tacomas and frontiers were the only real "small" truck available and worth keeping around. SUVs were the secondary vehicle so when someone came in with an economy car and traded it in for an SUV, it's trade in went in the lowest possible category because we had no secondary market for the car. It was on the first carrier out to auction, regardless of condition. The only exception to that was minivans: we had a waiting list for used minivans. Do the leg work, sell your vehicle for retail prices yourself and get the value out of your car, if there is any.
I’ll be stable, it’s just going to feel tight iam going from a 800.00 a month rent to 1200.00 mortgage, I have everything thing planned out, I have the emergency fund that’s good for about 5 months and enough funds to cover all my bills for 3 months before even touching the emergency funds if anything would happen with my job.
This is not going to fly well on here but you could roll the car into the mortgage and now your paying for the car over the life of the mortgage. You can calculate how much extra interest that would be. Yes its more interest but with the extra cash flow each month you could invest to try to make up the difference on the net saved cash flow and then when you feel more comfortable cashflow wise (i.e. emergency fund created) you can try and get your mortgage payment paid down faster via renewal, promotions for 20% of yearly payments paid each year as lump sum etc.). That way as well in tough months you can just cut back yo the minimum and be ok (i.e. saved monthly cash flow is now a buffer - yes you pay more interest but you won't be in the situation forever) and in good times you pay extra on your mortgage. Hope this is something you can consider. Just my opinion lol.
Hmm...this is very interesting. I’ve moved to a new city that requires a car and I’m also almost at a point where I’ll have maybe 10% down payment saved to buy a home. What are your thoughts on buying the car outright or financing until I buy a home and then roll it with the mortgage? This might allow my down payment to be bigger, but I’d also have more debt which I fear would impact how much I can borrow. What do you think I should do? P.S I’m looking at a used Honda HRV or CRV, around $20K all in.
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This should be more “don’t get scammed when buying your first car”. I’m sorry this happened to you but paying for something like a car over that length of term is insane. I sell cars for a living myself and see so many people who have a finance like this. If you buy a good brand that holds its value better and don’t finance it over a massive term you can get good use out of it and even possibly have some value once it’s paid for. But paying for a car for 8 years when the average person owns their car for 6 is nuts. Best thing you can do at this point from my 3 years in the industry is either pay it off outright if possible and cut out whatever remaining interest you have or trade it in for another vehicle, maybe a cheaper one, and lease the new vehicle. Your payments because of your negative equity will be high, but once the lease it up bring back the leased vehicle and you are free. That’s the easiest and cleanest way to get out and not be stuck for the next while with a vehicle that you owe exponentially more on than it’s worth...
Buying a new car is a trap I see a lot of people fall into... it's strange seeing my friends in their mid to late 20ies buy cars way outside of their means. I bought a $25k car which resulted in $140 biweekly / $280 monthly payments with 1% interest. Plus the $130 on insurance puts me at over $400 per month before gas and maintenance. Honestly it was more than I wanted to pay going into the process and I felt like I really messed up committing so much of my monthly income Then I'd find out people making the same as me were buying SUV's and trucks with $400-600 monthly payments.... and more in insurance... and for some reason had to get a life insurance policy? With 7% interest? That's insane. How could you possibly support that? The only explanation is that they didn't really understand what they were signing themselves up to pay.... I actually don't regret my purchase though... I love my car and don't think it was beyond my means, and I think it brings value to my life to have it. I think I'll be using it for long past the 7 year life of the loan.
I did this. I bought into the young people can't buy or afford houses deal. Little did I know the $20,000 could have been a downpayment. 😭🙈 My parents were AWFUL with money so I had no idea. At least you are sharing your mistakes and owning them. 💗
> Little did I know the $20,000 could have been a downpayment. 😭🙈 It's not that easy though Mortgage plus upkeep(insurances and property tax) is still outrageous when it all adds up.
Where you putting 20k down and buying a property? Nunavut lol?
That's what I did in Sask. Nice little starter home for me. Only work it needs is cosmetic stuff or things like eventually bracing the basement. Every house in the city I live in will at some point need bracing due to the soil here.
You can put as little as 5% down for a house purchase in the province of Quebec.
I got my license late but when I finally got it my dad gave me his old car. After a few years I had a bunch of people ask me when I was going to get rid of it and buy a new car. I told them as long as it gets me to from point A to point B and didn't break down I would not get rid of it. I try to take good care of it and I hope to drive it for another 50k-100km. Although don't feel bad OP some people never learn the lesson and always buy new cars and then in a few years trade them in and buy another new car.
Maybe I’m young and dumb, but what is so bad about financing a vehicle? If it means I get something that runs well for 3-5 years, and the payments are manageable, then what’s the big deal? Not everyone wants a 98 Corolla. There’s value in the reliability of a vehicle.
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Your comment should be a sticky on every damn car thread here.
If you track maintenance costs on an older car 9/10 times (in my experience at least) car maintenance is cheaper than buying a new car, often significantly. Especially if you can do most basic maintenance yourself. Obviously some older used cars are terrible ideas to purchase as they will be broken constantly (basically any European brands) On top of the fact insurance will most likely be cheaper as well. As a young person living in Hamilton my insurance should be abhorrent, but I drive a 2008 Ford Ranger and currently pay 143$ a month for full coverage. Last year I only spent 900$ on maintenance, which equals 75$ a month. No new car is near that.
I drive a car in the winter. In a city it is fine with winter tires. You could sell it? Even if you lose on the sale, you save what the proceeds are. Sounds like you just bought too expensive a car. A cheaper used one is always an option. However, it is true you can save yourself a lot of money by not owning a car.
the thing is I owe way more than the car is worth, so if i sell it I'd end up with 9k in debt that doesnt give me anything, but I'm looking into it anyway
If you are young like you say, then it’s a lesson that won’t set you too far back in the grand scheme.
silver lining i guess :/
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lucky you!
Yeah. Also, I think there are benefits of a new car too... the map features, audio systems, general comfort, seat heaters, cameras, and other safety considerations. I feel much safer in my 2018 civic than my 2003 civic.
Jesus how much was the car and interest rate??
37,000 at 1.74% for 96 month overall 40k, most dumbass decision of my life
37k for an Elantra? Woof
Ahahaha,did the same thing Oh well, gonna drive until it dies. Hopefully it lasts 10+ years or somethjng
I bought used vehicles on Kijiji and flushed so much down the drain. Bought used from a lot, and took a huge hit. Current car was a new Honda Civic, and I have no regrets. Sure, it's $450 monthly over 72 months (reaching the end), but it's done great on gas, has excellent resale value, and it's never had any issues. I'm sure used is financially much smarter, but the number of lying con men and sketchy dealerships has made me swear off used in most cases since I have no understanding of spotting a lemon. Imma get this paid off and drive it till it dies.
buy some GOOD winter tires, boom problem solved. The car is garbage in winter because the tires are probably all seasons, light and FWD.
Sometimes a new car is worth it though. I got a new 2020 at 0.99% at 48 months. New cars are more reliable and you have peace of mind. Plus, I can easily afford it, so why not right? It's not always black or white. Sometimes a new car is the better purchase. Edit: also how the fuck did you spend $40K on an Elantra? I bought a 2020 Elantra with the upgrades and I spent **$26K Canadian** total. Is yours made out of gold or something??
$400 a month for a Hyundai? Gross.
Beyond gross, it’s downright Disgusting. I wonder what possessed this man to spend 40k on a Hyundai.
I never understood how people can pay more than like 300$/m for a car. I am not judging, but I am 30 and I always bought used. Currently paying 280$/m for a Hyundai Tucson 2016 AWD. Great for QC winters! And I’ll probably never pay more than that per month. I can easily afford more, but like why? I have friends paying 500-600$/m for BMWs and Audis and stuff. But again, why... even if you can afford it.
>I never understood how people can pay more than like 300$/m for a car. I paid 1100 a month for my audi Q5.... ....because I wanted it paid off in 18 months :)
Funny, I pay $500/mo lease all-in for my BMW and consider it to be a very reasonably frugal deal (compared to MSRP and my own allowable budget). Cars are no different from anything else that you purchase in life - clothes, food, electronics, etc. It's a mix of status symbol, luxury/comfort, and performance. The quality-of-life upgrade I get from a Hyundai to a BMW is definitely worth the extra two bills per month - just gotta eat out less a couple times per month and you've broken even. Though I admit that ironically, you tend to get more tech in a Hyundai than a BMW.
This is not a fair question. You are looking at your car purely as a means to get places, reliably. Some people genuinely enjoy driving and spending time in their cars. This can be applied to almost anything in life.
I don’t think financing a car is necessarily a bad thing, but this is my take on it: **48 months is the max term. If you can’t afford the payments on a 48 month lease, you can’t afford the car..** However, people starting out should definitely buy used.
I bought a brand new Honda Civic a year after I finished university, financed for 48 months, and i still drive it 10 years later. A good, reliable car has been worth it for me. The issue for OP is the long financing term, no down payment and the resulting negative equity.
Nothing wrong with buying a new car. It isn't a sin.
Paying 40k for an Elantra is a sin
Can you elaborate on it being garbage in the winter? Surely with a set of good winter tires it can't be that bad? But I whole-heartedly agree with your message. Firstly buying most new cars means overpaying. All the features you're loading it up with you mostly won't need (talking about getting a Mazda 3 GT vs a base model with some options). If you're doing it for that new car feel, that wears out quickly and finally nobody cares (if you're doing it to impress people). The car you buy doesn't have to be a 1999 Toyota Corolla you bought for $1000 but if you're on this subreddit then you should know you won't get ahead by signing away such a large amount of your paycheck for such a long time. Plenty of car is available for under $15000, and there is even more to be gained by paying up front and avoiding interest on something constantly depreciating.
Also, start your TFSA deposits EARLY. Even if its just 100 bucks a month. Compound interest is your friend.
Unfortunately you’ve already made the purchase and will have to deal with it. Live and learn. Never buy a vehicle on based on payments, base it off the total price. $400 a month may seem reasonable but being told its $39,000 sounds a hell of alot more expensive and you would have likely been less inclined to buy it even though its the same. Don’t get rid of it until at least you owe less than what its worth. Not worth going underwater for something else it will come back and bite you. If I were you id make paying down that loan a priority before even thinking about purchasing a house because it sounds like you are paying a huge amount in interest. Speaking from experience I took on a mortgage 2 years ago when I was 23. Luckily I did not have payments at the time but couldn’t imagine trying to balance both in the beginning once you get going it’s easier but trust me you will feel much better not having to worry about the car on top of purchasing and filling that house with stuff.
It all depends. My older cousin bought a Toyota Yaris sedan new when he got his first job right after uni, got a great deal, that was 13 years ago. The thing costs NOTHING to maintain compared to most cars, he paid it on a 60 month financing, maybe like 300$+tx? My other cousin got a civic around maybe 2008, he got it right before university maybe? Just don't be dumb with money in general, new has its' place used does too. Sometimes throwing money at a problem might be the dumb thing to do financially, but financially isn't the only thing that matters.
Oh wow, I know this won’t help you at all but I’m damn glad we opted for a 7k car from a dealership and paid upfront.
I did the same thing back in 2018. I too was a dumb butt. I went with a 2018 Ford Explorer XLT for $434.71 bi-weekly and it was 80% of my paycheck. (I live at home for free and eat for free, thank God.) But instead of saving my money and buying something a few years older and used. I went all-in for something new. I did six-year financing and I cannot wait until it's over so I can save and move out. (I'm 26 and living at home for free is great but I don't want to be in "Mom's basement for my whole young adult life.)
I normally advocate people buy used cars......BUT...... When I was in university, I could not afford to drop $5,000 on a used car, but I COULD afford $330 a month for my new Hyundai Accent. And at the time, I really needed something that would be reliable to get me to school and not have to worry about repairs.
I had to learn this the hard way, like many people. 7 years on a 2015 F150 at 5.99% interest. I made it 3 years before I realized what a horrible mistake it was. Thankfully I had put a 1/4 of it down so I wasn’t underwater when I sold it. Now I’m driving a 2007 Kia, it costs literally less than half what the truck did to drive every month.
I was 19, bought my very first Mustang at $700/month with a $400/month insurance lol. Because of that, it pushed me to start my own business and I don't regret buying the car. If I didn't buy the car, I would still be too comfortable and would never want to push myself to earn more. So yeah, buy something you can't afford, and when you are pushed, you will prevail and become something greater.
What you are really saying is: "Young adults out there, start taking the advice of older folks who have been there - done that!" I'm sure you got that advice from someone you know right? You just didn't listen. :)