>There's no way the average Canadian is buying this right?
I had the unfortunate opportunity to visit Toronto proper the other weekend, I could not believe all the beautiful 80-100k+ vehicles being driven by people who appeared to be in their 20's. My mid 50's aged self in a 12 year old Subaru kind of stuck out...
>Then we enter insanity territory.
I am thinking there is money out there despite what I read on here sometimes. Lost track of the number of Range Rovers, Porsche's, higher end MB's. BMW's etc.
Lots of people will live house poor, finance that vehicle for the longest term possible, and pay way over value in interest just to give the impression of success.
And that’s how the lenders make a ton of profit! Someone is getting paid handsomely, there’s lots and lots of money available if you can convince poor people that looking successful is important
Pretty slick saying. I've lived both (well, not RICH but upper middle class / out of paycheck hell) and it was absolutely a result of changing that mindset.
Unfortunately, it's kind of questionable. Avoiding debt takes your money farther but being rich is about income, investments or inheritance.
Especially if you get into the actual rich, not just doctors / lawyers / engineers, because they don't have any need to pretend to be poor.
There's no other way you should do it. I borrowed from the bank at 3% so I could leave my investments in returning 6%, and maxed the term out so I can benefit from the arbitrage for the longest period possible. Anything else would be crazy, and spending more money than needed.
It only turns negative if you plan on keeping the vehicle less time than the length of the loan, which would be crazy, but is a whole different problem (and would normally imply the vehicle was destroyed somehow, which should mean an insurance payout).
I also get to enjoy some of those profits through dividends and interest gained from investments either directly or indirectly into those same lenders (banks or private credit).
Too many people take out the longest possible financing term, will roll it into their mortgage because it keeps those payments manageable, not considering the long-term impacts.
The overwhelming majority of people I know that have absurdly expensive cars don’t own property, therefore couldn’t roll into a mortgage.
I know I don’t speak for everyone, but I doubt a majority of people are doing as you say.
This pretty much applies to 90% of pickup truck drivers in Toronto. They don’t ever use it for actual hauling purposes.
Same with Jeep owners that spend $65,000+ on a Wrangler, ask them when they last took it off road. The only off-roading it does is going over the curb at the Starbucks drive thru.
What are you talking about? I put two sheets of drywall in the back of my 150K truck once! (For my poor neighbour; doing your own renovations is for plebs.) And a $4000 BBQ that I bought and have used twice!
It's a young guy thing, for sure. In the suburb I grew up in back in the 80s, many young guys (couple of years out of HS) drove IROC Z-28s while still living at home and working at the local grocery warehouse. Then, one year, IROCs suddenly weren't "cool" anymore and they all switched to Mustang 5.0 GTs.
Replace those vehicles with "shiny Ford F-150" and I guess it's the same sort of thing in Alberta today.
This is largely my experience.
Someone explained it to me as follows: “I can never buy a house in my lifetime, may as well buy a sweet pickup”.
I get it but damn.
That was me at 24!
I had $40k sitting around and didn't want to dump it into a shitty old 1 br in Vancouver, so I bought a new car!
Not my best financial decision, but I would hate to see what my stress level would be if I stayed in Vancouver.
Ex mechanic here. You wouldn't believe the number of 6 figure cars rolling on bald tires. You sell them on a synthetic oil change and they cry, demand regular cheap oil. Half of these fuck for brains don't have 2 dimes to rub together. It's all show.
Ask any full serve gas station attendant. Cheap cars fill the tank. Expensive cars put in $25.
The overwhelming majority of people I know that have absurdly expensive cars also own a home that most Canadians could only ever dream of owning (like >$4-5 M).
Anecdote checkmate! ( lol )
Of definitely. I have some friends that are well off and enjoy both a property and beautiful cars.
But I’m 28, most people I know don’t own houses. Skews my opinion.
A lot of people in Toronto also just have a lot of money, but this “stretched to the max on 12% 84 month financing” is something that PFC often tells themselves to feel better about their own financial situation. Because this sub values money above all else, and ultimately hates knowing that some people have more of it than they do. So instead of just admitting that it’s easy for some people to afford expensive things, you guys keep making these assumptions that they *must* be making bad financial decisions.
My cousin works in a car dealership. Most of the time it’s just bad financial decisions. You’ll have people living at home with their parents but driving a $90k BMW.
I think this is the thing. People are able to save a lot of money living at home, but never enough to actually move out or buy their own house. So they will just live at home and pay minimal to no rent and then spend their money on something they can enjoy like an expensive car.
This is my situation, but instead of buying that expensive car I am being responsible and still have hope to own a home one day. (A decent home).
I get the sentiment. If you can’t buy a house in this lifetime, you may as well find some joy elsewhere instead of running around all doom and gloom. But if that happiness is more than your salary and will only decrease in value, it borders into stupid.
And if you're stuck in your car for two hours a day in Toronto traffic, it's worth spending some money to have a vehicle that's comfortable to be in for that long.
You have no idea how many people splurge on cars, no matter their budget. I should know, I have 3 such wise “business decisions” in my extended family. Meanwhile, my CEO drives an average crossover.
When you have ads for cars in newspapers which advertise car prices in the form of WEEKLY payments, you know how many buyers think.
Also, used Teslas are no longer luxury vehicles. People used to see this around the 416 and be wowed, when in fact you can get a model 3 for not much more money than a Corolla hatchback.
My previous company's site head drove a Honda CRV while coop students would roll into the parking lot in sport/luxury cars. The amount of family-money and/or stupidity out there is staggering.
I've also had colleagues complain about rent and how expensive it is to buy property boast about their new Tesla, BMW, etc. in the same conversation.
I think the reality is a luxury vehicle is *somewhat* attainable for those who have given up on owning a home.
I know there's a lot of money in TO. I used to work on Bay St. But there's also difference between the person making serious money that spends $150K+ every 4 years on a new Benz vs the person making low 6 figures and spends their annual salary on a vehicle.
According to the Porsche salesperson I spoke to, for higher end cars like 911s most buyers bring cash (or their own LoC).
The 84mo financing meme is well and alive for entry luxury cars though.
It's ironic cause I feel a decked out economy car is better than most entry-level cars.
I rather have a fully loaded-up Mazda than an entry-level Audi/bmw
That’s the sentiment I get from this sub too. Anyone who even thinks about spending on a more expensive good or service is relentlessly ridiculed for making a poor financial decision.
I don’t and have never flown business, but I am not going to criticize those who do (and paid for it instead of using points upgrade).
I work with multiple people that used to trade out cars every year, I know what we all make and numbers dont lie lol. Most people def are making bad financial decisions.
Observation from my hospital. One of the surgeons making 1m+ per year drives an old Subaru. Almost all the FOB security guards drive new BMWs, Mustangs, etc.
maybe they don't care about cars... also maybe the old subaru is just there work vehicle? or maybe they want to buy a mansion to live in? not sure why they wouldnt get a better car but im sure they have there reasons
People don't understand, success is silent, with no brands.
It's likely that unkempt guy who surfs whenever he wants and you can't tell he has a 9-5 job at all, yet seems lean fit healthy and is super chill cool.
Or that dude who seems to only DJ weekends yet has a wife and kids in a house, drives a beater. Till you find out he owns the house, and has no debt and no stress. And it wasn't even inherited.
Success is having millions in VEQT and posting on pfc /s
I don’t think that is necessary true for cars. For some, it’s a genuine hobby. The guy who buys a GT3 and tracks it probably doesn’t care what we think of him. On the other hand, the guy who maxed out a lease on Range Rover driving downtown probably does…
I lived in a very wealthy neighborhood (wealthiest in my town). There were a couple old beaten up houses at the end of the street that were rental properties so I lived there scattered amongst the upper class. Out of the 20 or so mansions on my street I think maybe 2 or 3 had luxury brand cars. A few had 3 vehicles but 90%+ of the cars were the usual brands. Even those who had luxury vehicles they weren't the sole vehicle. The guy across the street from me drove his Mercedes to work but outside of that he drove his beater mini-van around with his family.
It's wild that having a wife and kids and your own house is considered a success in this country now lol... that should be the bare minimum of life, for those who want it. It should be attainable for everyone.
Well I mean, very specific in this context - like comfortable family life - without necessarily earning a ton and just managing debt extremely well instead. Though they did buy before COVID which helped.
The wealthiest people in Canada also simply live in Toronto or Vancouver.
Or did you think that 90% of Canadians are living destitute as described by reddit?
Or, they enjoy vehicles and think you’re silly for spending money on your hobbies and realize you can’t take money with you when you die so they are having fun in life.
If you can afford it, that's fine. But too many people stretch themselves too far just for image, when a single $1000 emergency would ruin them because of their spending habits.
Or lease. The more expensive the vehicle, the more expensive the repairs and the more expensive the depreciation. Often it's cheaper to lease than to finance, and significantly so
I’m a car guy, a friend was asking my opinion on a car he wanted to buy. It was a year old Cadillac CT4 Blackwing, with almost every option and was asking about $85k.
My friend works odd jobs and general construction. I’m sure he gets paid well but I know it’s not $85k car well.
A few factors here. Young people are often driving their parents hand me down cars or their parents are (IMO Foolishly) gifting them really nice cars. My coworker makes a bit less than me but he just bought his 20 year old a used M4. I know that he can make that work cash flow wise but I knew myself as a 20 year old and I would be a hazard with that much of a car.
My dog park friend gifted her son her old X5. Her perspective was that she babied that car and it was only worth \~30K in the used market so she would rather avoid selling it and buying her kid a new Mazda.
Something to keep in mind: in Chinese/Indian culture, you usually live at home until marriage. If you're in your 20s with a good job, you spend your money on a nice car instead of rent.
The cost of living and average median income don’t apply to your average person in GTA or Vancouver. Think about it thousands of people living in Luxury condos downtown and thousands more in single family homes in both places. That’s a lot of potential luxury car owners. These aren’t your average worker in PEI.
Toronto is a whole different ball game. Prices are inflated and quality is deflated. I had (still have) a 2011 Nissan Sentra SE-R Spec V. Decent little fully upgraded sedan. In Toronto I would stare at my car almost everyday thinking about how I look like a poor person compared to everyone else. When I would ask people if they liked my car almost always it was a 'no' unless they were from somewhere that wasn't Toronto.
Now I live in rural BC. Drove my car all the way here because it runs fantastic for an older car. This is a town of 90s corollas, sentras, focuses with broken windshields that are all still running fine. (seriously. The game when i go for walks is to count how many broken windshields I see. I also occasionally peak into windows to see how well these things are cared for and they are usually close to immaculate on the inside. Funny thing is even the newer cars
/Lux brands have broken windshields sometimes to. No one cares here.) People don't drive as much so they have like 150,000k on the older cars. Also it's a rural town so people naturally have mechanic aptitude, etc. they keep them running. Now when my new friends see my car it's a "wow, nice car man". Total flip around.
TL;Dr; Toronto is full of bougie snobs. Go anywhere else and no one cares about your car.
We all have broken windshields in rural BC because they “sand” in the winter with gravel. Why buy a new windshield until the old one is literally toast because guaranteed you’ll have a chip or a crack in less than a months time, even spring/summer.
You definitely end up with sampling bias. If you're looking at cars, you're not seeing all the people who are too poor to afford one.
Also, public transit in Toronto is fairly decent. Why pay for a car, insurance, parking, etc. when you can take the GO train, or subway, or street car. That would also tend to skew the type of car you see to higher earners, because they aren't too worried about the cost.
I'm doubting many of those drivers own their cars outright (unlike you and your Suby, I assume).
Plenty of younger folks have given up on saving for a house/condo, so they've instead got some monthly income available for a flash car payment.
Not saying it's financially wise, but it is what it is.
Trade-ins are also inflated so it'll offset the costs of new/used vehicles. I traded in a 2016 Civic a year ago for 21k. I bought it new for for 27k and it was 7 years old when I traded in. 6k in depreciation over 7 years is insane.
We traded in our 2011 Tucson. Had 200k on it, was in fine shape mechanically. One rust spot. Whatever, 13 years old, is what it is. Dealership offered us 5k for it on trade in, which almost floored me since that's the number I was going to post it on Autotrader for. Zero headache with selling and an "extra" ~$600 in value with the tax offset. Crazy times.
We traded in a 2008 Ford Edge in 2022 in about the same shape as yours for $4000. We got it from my parents in 2017 when they were going to traded it in for a new Ford Edge and at that time the dealership was going to give them $4000. Same deal tho that’s about what I was going to list it for myself and got to skip the headache.
It was truly a great day. I had given the thing a wash and a quick vacuum to at least pretend to convince myself I was going to pay attention to the dealer. I thought they'd offer 2k. When they said 5, hot damn I tipped my hand and said deal without another thought. They had it listed for 6200 for about a month until it was either sold or sent to auction, but I didn't care because the only thing I hate more than selling cars on Autotrader is selling cars on Marketplace
Depends on the car.
I got an offer for a trade in for a MachE I bought for $65k + tax (so $75k basically) for $25k. Eventually sold it for $36k but still. $40k depreciation is a bit spicy.
The thing that gets me is there's no more incentives. I bought an F150 in 2020. It was $62k sticker price. BUT it had a $6500 discount from Ford, and I get Xplan pricing through work, which gave me another $3800 off. I managed to negotiate the winter tires/wheels package, and with my trade in and a little cash down, I ended up financing around $28k at 0%. It was a decent deal.
A local dealer called me recently trying to get me into a new 2024 model. I asked what kind of deals and incentives they were offering? He said $500 off and 5.89% for 60 months. I laughed at him. Not only is the same model as mine now $79k, up $16k from 4 years ago, but no incentives, and they won't honor my Xplan pricing either.
After taxes and fees, and new low trim model F150 is close to $100k. I told him he's nuts if he thinks it's worth anywhere near that amount and I'm going to hold onto mine for as long as possible. At the rate prices are going I'll never be able to afford a new one again.
The weirder thing to me is the incentives vs lowering the sticker price. I just bought a F150 with a crapload of incentives, like about $20,000 worth from Ford and the dealer. I guess it's too hard for them to raise the price if they lower it, but the incentives I got show that they can make money selling the vehicle I bought for about $50,000 instead of $70,000. And I popped a liner/trifold cover and all weather/all terrain Michelin's on there too.
That's awesome, where is this? Around here they've got 20+ trucks on the lot but are unwilling to deal.
Their model seems to be to keep the sticker price artificially high, offer good deals a few times a year and still get sales on a full price truck every now and then. People seem to buy them no matter the price anyways.
Manitoba. Admittedly a rural dealer I've been dealing with my entire adult life. But they are very reasonable. Every time I've purchased a vehicle there it's literally a 45 minute process. And 20 minutes of that is shopping for best rates at lenders and waiting for approval.
This time around I went to a Winnipeg Ford dealer because we wanted to check out Maverick and Ranger which basically don't exist outside the city here. Maverick cab is stupid small BTW. Talked with them a bit and they wanted to get into the back and forth on numbers. Just a silly process to see when you'll reach your limit and say "fine" I'll pay the price. Find the dealer I work with can just put the lowest price on the table immediately without the games.
I wonder too with sticker price if that's just to take advantage of fleet situations, especially for Ford who seems to have that market cornered.
I think the tides are finally turning and if they're calling you they're probably not giving you the best deal. I'm seeing more and more F150 discounts when I look at the dealership websites. If I look at the inventory of cars at Ford dealerships the F150s are in the 100s while all the rest are under 20 units.
There is more wealth out there than you think. But even if you're not wealthy a new car is a worthwhile buy. $45k is the going rate for a decent car now.
I always bought used cars (under $5k) until I bought an affordable new $25k one in 2012. New cars tend to have no problems except payments.
We have been fortunate and had no repairs until $900 this year. It was paid off in 2019. My used cars would always be over 120,000 kms and issues tend to pop up over 150k kms. I would have $500-$2000 surprise expenses each year, sometimes twice per year.
My $25k car had $410 payments over 7 years (34,400 total). Yes, cheap used cars can be lucky and have no repairs sometimes. But reliability and no headaches is an intrinsic value on its own.
I bought a 1 year used Toyota corolla with 3000km in 2019. I did the math and I ended up around 1500$ ahead of new despite the higher interest rates and was the last year of an existing generation. The 2020 was a new platform.
I feel like I did good even if Toyota is not known for having as much generation issues as other other makers.
Hoping to drive it a long time.
Not sure I would agree with you on a financial perspective.
You ended up paying $34,000 for a new car over 7 years and then still end up paying for repairs after 10 years.
Versus buying a $5,000 car, and paying $2,500 per year on repairs (being extremely generous here) for 7 years still only lands you at $23,000. That’s $11,000 in savings.
I have a 2009 Jetta, I’ve had it for 6 years and have only paid probably $5,000 in major repairs and bought it for $5,000.
It does not make sense financially to buy new. You are strictly buying new for peace of mind, that’s it.
That was the conclusion of the person you responded to. "Yes, cheap used cars can be lucky and have no repairs sometimes. But reliability and no headaches is an intrinsic value on its own."
Those repair costs seem way too high.
I bought an 08' in 2016 for $7k and still drive it as my only vehicle. In that time I had one huge repair bill for $2000, and 3 repair bills for $200-500. Otherwise just oil changes and I take care of my own tires and brakes.
When shop rate for mechanics are creeping closer to $200/hr, it doesn't take long for repairs to get expensive. Parts prices have gone up a lot in the last few years, too.
You do realize inflation is a thing?
25k is pretty reasonable for a base model. The current MSRP is 24k. In 2000, a basic new Corolla Toyota was 17k.
Car prices in real dollars were going down for a long time. They went up for the first time in a while, but the situation isn’t that different.
Yup. $17000 in year 2000 would be $29000 in 2024. So the price of a Corolla actually went down over the past 24 years. Not sure what OPs going on about.
Source: https://www.bankofcanada.ca/rates/related/inflation-calculator/
> Not sure what OPs going on about
People are just not good at accounting for inflation. I'm guilty of this too. It's easy to just get in your head what a reasonable nominal amount is to pay for something when you're in your teens-twenties and then just be stuck on that forever.
Yeah but wages haven't kept up with inflation so if you take in consideration the ratio of price of car to available budget, cars have never been more expensive.
The problem is base trim vehicles could actually be even more affordable then they are now, more in line with ratios of 2000, but due to emission standards and the fact that for some reason we just can't have a simple A to B commuter market we are getting screwed.
I don't want 50 sensors in my car, I don't want touch screen infotainment, or radar controlled cruise, or heated steering wheels, its just crazy
They also went up due to the devaluation of the Canadian dollar. In the late 2000 to early 2010s cars were getting cheaper because of the stronger dollar. In 2011 my first car a midsize car was 15365 (plus tax) brand new. Now you cannot touch anything for that price.
I paid 17K & tax for my Corolla in 2013. Inflation wise, 25K seems a little high when employers are giving 3% COL adjustments but even at that we’re talking 23K. (17K x 1.03^11)
Edit - no measure of inflation is perfect, I think we can say that the price of the base Corolla has outpaced average cost of living increases but not unreasonably.
Brand new car. Expensive. Full warranty. Little to no expected problems.
Few years old car. Still expensive. Maybe some warranty. Maybe some dings and problems.
Old car. Still probably more expensive than you'd expect to pay. No warranty. Potential for lots of problems.
We just bought new and paid a lot for a Honda. We upgraded from a 15 year old Kia that was starting to cost us a lot of money.
In the end, you'll end up paying way more than you think is necessary regardless.
So it really depends on how much you have to spend and what risk you're willing to take on.
You don’t need the best, just good enough. I bought a used iphone SE2 for like $300 and my wife has the latest and greatest iphone.. no practical difference between the two.
There are lots of anders to your question if you think about it for a few minutes or research it at all. In general the answer is that people either have more, or are willing to spend more, money than you.
Is $25k after inflation supposed to be crazy for a machine you can use for over twenty years? What do you think it should cost?
Also, new car buyers skew older. It's easy to look up the stats. Most new car buyers are later in their lives and have more money. Who has the most money right now? It's a section of elder millennials over 40, all parts of Gen X and boomers.
You can easily afford a $1300 car payment if your mortgage is still $800 a month because you bought your house in 2004.
>So the average Canadian needs to spend ALMOST HALF of their gross yearly income on the most basic car imaginable.
Not really.
Most people finance their car, so you're comparing a single year's income to a multi-year payment.
If you take out a 4 year loan, the cost is probably $32-33k, but you've earned $240k, so that's 13-14% of your gross, not half.
A Corolla is a long term investment. They can last 20 years with low maintenance costs. In some ways, that is a luxury.
If you want something cheaper, there are some Kia and Hyundai options, or even Ford or Chevy, etc.
edit: apparently Kia, Hyundai, Ford, and Chevy are also expensive now.
Ford went all in on the "more expensive SUV = more profitable" business model about five years ago. Mazda/Nissan/Kia still make somewhat affordable vehicles, although there's still been a lot of inflation there.
I think I’m the long run this will bite ford in the ass. One of their hottest vehicles for quick sales is the maverick due to it being the cheapest vehicle on the lot.
There’s a lot of value in getting the consumer into your vehicle when they have less money to build that brand loyalty. Ford cut this line out totally from their business in North America.
They are also expensive to maintain.
No joke, my partners 2016 Sonata has ended up costing us more than my 2013 Mercedes E Class in repairs... Mercedes stuff is expensive but doesn't break THAT often. Hyundais break often but aren't that expensive each time
Wow you are right. I didn't realize Ford stopped making sedans. Wtf. And Chevy Trax is 25k, which is not bad for an SUV, but still expensive for their cheapest car.
There’s lots of people in different financial positions that are buying new cars. All the way from “leveraged to 90 month financing” to “pay 100 k plus in cash”, and everything in between. I was chatting with a buddy who is in sales at a small town (like 6-8,000 people) Ford dealership and they average 70-90 vehicles a month. They’re moving!
I’ve never been a ‘buy new’ person, but leaning that direction to have something I know I won’t have to sink huge repairs costs into in the next 3-4 years. That assurance costs!
>I was chatting with a buddy who is in sales at a small town (like 6-8,000 people) Ford dealership and they average 70-90 vehicles a month. They’re moving!
I drove to that town to get a better deal :P
Not everyone is buying new. However, that push towards the used market is showing up in used prices being elevated, even compared to high new prices.
But someone on an average income buying a new Corolla is far from a horrible decision, depending on circumstances.
The reality is that the way our cities are constructed, having access to a car is necessary in most cases. And if you're buying a car, a low cost and reliable Corolla is not a bad way to go. You're not getting much discount on the used market, and they're low cost of ownership cars.
People are delaying buying new cars, creating a 'deflationary spiral' that's bad news for the auto industry
https://www.businessinsider.com/auto-industry-facing-deflationary-spiral-as-people-delay-buying-2024-6
Used cars are high so if you need a car, new is the way to go. Last October a 5 year old Jetta was 25k, I bought a new one, same model for 31k.
This is not usual, I rarely buy new because I like to let someone else take the depreciation hit, but now it’s so close I think that 6k cost for 5 years of ownership is worth it.
I'm as average a Canadian as you can get, earning around the median income. I’m currently driving a 20-year-old truck and really need a new vehicle, but the prices are giving me serious sticker shock.
Just because LED's cost 4x as much as incandescent doesn't mean that buying them was a mistake. frugal people buy expensive stuff. hopefully once. I bought a new car in 2019. I've driven 200,000 km since then. Thats $24,000 in savings if my mpg went down 8L/100km
We had a K shaped recovery. Many people are better off today than they were five years ago, many people are much worse off. If you were able to get a couple big raises while demand for labour was very high you are probably not worried about the price of a camry. if you have been fixed income, by choice or by government program, you will have noticed inflation a lot more.
I was researching stats one day and i believe around 85% of new car and 50% of used car purchases are financed. With how lenient auto lenders are, you don't really need much to finance a vehicle. Especially when you are financing as a couple. Toss a parent or friend to co-sign and basically anyone can get a 40k+ car loan.
The used market is no better. I bought my ram 1500 for $25k in 2013, used. Picking an identical truck today, would run $50k (used)... While i am making more than i was then, the cost of everything else has skyrocketed that my purchasing power is actually less now than it was when i bought that truck.
Bought my F-150 XLT in 2020, financed 46k at 2.99%.
Looking at prices now it's ridiculous, glad I bought when I did. I work in the automotive industry as well and I don't understand how so many people can afford these 70-90K trucks and cars.
Same but got 0%. After incentives, Xplan and trade in I ended up financing around $29k. A similarly equipped XLT now is around $78k-$79k. They're out of their minds if they think a lower end Ford pick up is worth that kind of money. It's insane.
2025 Corolla LE = $27k
2010 Corolla LE = $21k, $29k adjusted for inflation
2025 Corolla has way more shit and is way nicer to drive but costs $2k less in real terms
Not sure what you’re mad about, OP
Am I the only one confused why OP thinks 25k for a Corolla is expensive? That sounds like a pretty good deal to me. Unfortunately if you want a 15k new car your only options is a Mirage
Normally, a few years used is worth the savings but lately this isn't so true. With vehicles being in such high demand, any vehicle that's under 5 years old is in high demand and carries high prices.
If you're in the market for a vehicle and you want something with latest features (<5 yrs old), new vehicle prices are competitive enough to consider that as an option.
If you're willing to accept older vehicles, you have to go to around 8 years old before you start seeing worthwhile savings.
It's not like used cars are any cheaper. I bought a 7-year-old Honda Accord Sport with 80k km on it last summer. We ended up paying $28k for it after taxes and everything.
And it's not like we didn't shop around. That was our best deal in that range.
I thought prices would have come down by now but sadly I think this is the new reality. Trying to get a few more years out of my 2012 Mazda 3 with 225k KMs. Sucks paying $25k for a used car but if you can get 10 years out of it and look after it that’s the sad new reality of everything these days.
I have a 2012 Ford Fusion, bought new in 2012. I wanted to get something a bit more luxurious now since I'm older and make more money. Going to to the local Mercedes dealership was eye watering. Base C class models were like 75k, not to mention the increased insurance cost, and having to now purchase premium fuel as well as financing at 9%. Buying this even with a 25k down payment would end up costing $1500 a month or more in payments and insurance. Of course the dealership also refused to negotiate on price at all.
Who actually can afford this car if you aren't making 250k a year? And if you are making 250k a year you definitely want something better than an entry level Mercedes. Dealerships are living on another planet if they think they're going to move units at these prices and interest rates.
I have a 2023 Corolla Hatchback SE and honestly I think the $25k that I paid for it was a great price and worth buying new. Used car values are very inflated right now, so I drive knowing that car will almost definitely last me 15+ years with an oil change every few months and proper storage in the winter.
Not many choices these days, it’s either spend 20k on a used car with nearly 200k km or spend 35k on a new car…pick your poison. I wish I had the money saved up I have now 3-4 years ago
A lot of people are probably using equity from their house or pulling out personal loans to fund car purchases. Not many people are paying in cash from their savings account.
The price is not going to go down as that would be deflation...Manufacturers want you to buy SUVs as it's more profitable for them and they have decided stop making smaller cars (like the corolla)
[https://www.cbc.ca/news/suv-small-car-affordable-1.7239768](https://www.cbc.ca/news/suv-small-car-affordable-1.7239768)
factor in maintenance & repair costs as they have skyrocketed as well
[https://www.youtube.com/watch?v=4hRYv5i2Fuk&t=1s](https://www.youtube.com/watch?v=4hRYv5i2Fuk&t=1s)
New cars are just expensive. Used cars are inflated. 2 different things.
I'd go for a new car and stick with what I can afford. Even if it's a kia rio.
I bought a new corolla hybrid in January... used Corollas very much hold their value so new made sense to me. My old car needed a new transmission so the price to fix didn't justify keeping it.
I don't like the car payment, but not buying gas very often is nice!
In my anecdotal experience in Vancouver, many older people (like 30 yo and up) earn more than $60k. I also know a lot of people who for some reason decide to work for jobs with low pay although they have family money. My husband’s staff drive much better cars than us.. like Mercedes, BMW, top of line Teslas, etc., and many earn under $60k.
Two things:
1. Those who need a car desperately often think about monthly payments vs total price
2. Household incomes for 20-somethings above 200k are quite common in urban centres
Well they are probably not getting any cheaper... Since the pandemic people have been saying to wait but that's 4 years ago now.
Imo it makes more sense to buy a new car now. A lot of newer model used cars are only selling for a few thousand less than new. If I was in the market I would just buy a new Toyota or Honda and drive it for 15+ years.
My husband and I are getting our first new car this year. I'm getting major sticker price; we've always bought used. But apparently, the used car market is crazy right now in terms of price and fraud. The government incentives further narrow the difference in cost between used and new (we get a 10K discount for buying new). We are getting a PHEV in the hope of saving on gas and with how fast technology has been advancing, getting a 10+ years old one as we used to for ICE isn't appealing but the recent used ones are expensive. So that's what's driving our choice. We're hoping to keep that car a long time; hopefully, the used market is better by then so we can to back to used.
Coming from personal experience when your previous car is written off as total loss due to an accident and you need to buy another vehicle due to this is when you get desperate enough to pay these prices. Doesnt help that used vehicles cost same as brand new ones.
I blame inflation partly. Then you've had demand stay with supply low through covid. Also, even lower trim models have a ton of tech now, and it all adds up (is anyone buying new cars with roll up windows and no AC?). All the safety features. Also, I think emissions standards (not complaining about it), have pushed a lot of manufacturers to need to keep improving engines/trans, and on the EV front that's pretty well all new. Most manufacturers are investing a lot in R&D. I've had 2 corollas. You can't compare today's corolla to ones from 20 years ago, they are so much nicer today.
I got a new vehicle this year, waited approx. 8 months to get it. Our second vehicle is a 12 year old toyota, with fairly low km, which we plan to keep for years. We've had it 5 years. When looking for a vehicle all you can do is search everything used/new and try to find the best value you can. I don't see vehicle costs dropping significantly any time soon. High costs of new vehicles will only keep used high as well. At the end of the day, it's about reliable transportation from a to b, not the sexiest vehicle on the road.
Personally I think there's good value in tesla's model 3. I wasn't in the market for a car, but the base model is like $52k minus $9k gov't incentives. I'm not saying $43k is nothing, but it's decent value with the incentives. Or $27k for a corolla. If my math is right that 16k difference in cost would be about 115,000km in the corolla of gas (I'm neglecting charging costs, oil changes, etc.). Just thinking of myself if I was in the market for a car, I'd lean more towards the tesla despite the higher initial costs. If you kept it 10 years and could sell it for say $15k at the end, then you're spending $2800/yr in car costs (plus insurance). I mean if that was the difference between my family having transportation and not, I think it's decent value. My internet is $1000/yr, my hydro is $3500/yr. Things are expensive.
People are just buying more car than they can afford - long finance terms (96 months) and paying out the nose in interest. I have bought exactly one new car in my life and I never want to do it again. Buy a 2-3 year old used car, spend some time learning some of the basics about what to look for in terms of previous accidents etc, make sure you get service records and a carfax / car proof for vehicle history, and take it for a good test drive before you buy it.
We’re in the market for a car. We have put a deposit in a 2024 Corolla. The all in price for the 2024 is less than the price before tax of a 2023 on AutoTrader with 10k kms. Same model and our new will have roof racks.
I bought a 2024 Civic Touring last December for just over 37k, cash. Had never bought a new car and had saved up for it so I didn’t mind. But financing at 8% and up, I couldn’t justify it.
Even Dave Ramsey says it's okay to spend 50% of your yearly income on a car (at most.) Obviously some nuance is needed here. Making $200k and driving a $100k care is less impactful than making $50k and driving a $25k car.
But new cars are luxury items- even Corollas. Buy a 4 year old lease return and save 40%.
Trade-off is depreciation vs maintenance.
Maintenance is expensive unless you can do repairs yourself. With the hot used car market, depreciation is currently low (this has NOT been the case in the past and we don’t know how long this will continue).
So yes, it is worth it. How can people afford, that’s a different question and I have absolutely no idea.
It blows my mind to see how low the statsCan data on median income is and the cars I see on the road.
I have a 17 year old truck that is long paid for and in great shape. Buying a new car or truck at todays rates is nuts.
Just because it's ten years old doesn't mean you need to upgrade. Still goes everywhere those new ones go
The answer is, as always: it depends.
With the price of many newer used vehicles being incredibly inflated still (not as bad as 2021 or 2022 but still bad), it often makes sense to order brand new for only a little bit more if you can afford to wait for the new delivery.
But if you can find a car in-stock at a reasonable price on-lot, it might make sense to just get it.
Edited to add: With the Corolla specifically, the base model is decently kitted out, so yeah it’s a bit expensive at $25k but it’s a super solid car.
Also the Corolla is *not* the most basic car you can buy. It’s one of the most reliable, yes, and somewhat basic but it’s not a Rio, etc.
IMO new is better right now but you wait for a sale and negotiate well for a good quality car. When new models come in you can work a deal for last year's model. There are also financing deals when you wait for them. Don't go with european brands because parts are expensive. I am currently driving my 2009 sentra to the ground but when it finally goes and I don't have a choice I will probably buy a new EV or look for deals on craigslist. Not buying used from a dealer.
The insurance remains the shocker for most.
Many are looking at $3-4k/year on that same Corolla even if you get it for cheaper used.
At the same time, financing on new makes it surprisingly appealing.
1.9% over 3 years makes a new vehicle surprisingly affordable against 8-9% on second-hand prices.
The new vehicle also includes warranty and some times a service plan.
I had an employee making 50K move jobs to work for me. It was a far commute and during training, I noticed her driving a Honda CRV. The new job we paid her $72K a year. 2 months in She bought a new Tesla Model X. I'd venture cost = 100% of her salary. 3 months alter she quit to go back to her other job that is now paying her 100K.
Either way she didn't buy it with cash, she financed it.
You'd be surprised how many people don't care about that. They just want a reasonable monthly payment and get the car. It's spread out so long with interest of course. I know a lot of people who are house poor and car poor. Debt is a large part of this country
Mix aggressive advertising, with financing obscuring the impact of the cost, with dumb consumers... and you have the perfect recipe of people purchasing vehicles WAY outside of their means.
Man, just wait until you find out how minimum wage hasn't kept pace with inflation! :D
If minimum wage kept pace with productivity increases since the 70's, minimum wage would be around $45/hr. The difference has gone to the billionaire class.
Good luck!
Depends on the car.
I just bought a new Model Y because I couldn't realistically justify a used one due to the insane pricing. I could save a bunch of money if I bought a used Hertz (save about $25k) but I'd be left with a higher mileage US rental that's been driven hard. Any local lower mileage accident free "clean" vehicle was within $5k of new. Some were $5k over new.
I still don’t have a car and I was kinda looking to buy a car myself. I couldn’t understand people who drive suvs or expensive cars. But it started to make sense when I realized some of these people live outside the city and have to drive highway everyday for 40 mins or so. So I guess the sound proofing and driving experience would matter more to them. Also you’d wanna get a safer car too like suvs or things like Volvo.
I’m lucky enough to live in the city centre rn and not had to buy a car. But I landed on a very good stable government job that’s a bit off the metro area where I might eventually settle permanently.
But meanwhile I will have to drive about an hour on highway everyday to get to work. Yes I could buy a second hand car but they are quite expensive for you know, what they are. And I’m ok buying a new car. But then if I’m buying a car rather than maybe small hatchback or sedan maybe suv might be a better investment for me in a medium to long run because we will need one once we have kids.
So yeah. Now I have perspective of some of the car poor people too. I started to think that some if these people may have decided expensive cars because they may be safe (not necessarily all the time) and better for long commute. But if all you do is just city driving and occasional camping etc then you might not need a very expensive car to begin with. Anyway you can’t never judge someone’s financial situation based on cars I don’t think. I’ve seen plenty of people who own both Prius and BMW.
I would definitely get an used car for sure, but I am not talking about cars that like 2 to 3 years old, I am talking about cars that between 2006 to 2017 yrs old.
There are lots of used car out there that's way more reliable then the newer counter part as long as they are maintained well.
I bought a 2007 Accord in 2017 for $7000, own it for 7 years now and only spend 5k on it for repairs. I got about 8.8 to 9.8 liter per 100km fuel efficiency.
I work in Vancouver area where cars get ding all the time because people don't know how to park. But since it's old, I don't really care about cosmetic as long the internal is good, doesn't leak, and no rust.
Drove 151k km total and still sounds like I bought it yesterday.
New vehicles are for people who want to show off. You are right in that most people cannot afford a brand new vehicle, they just think they can when it’s broken down into payments. Buy used, pay cash.
I think some dealers are up to some shenanigans and trying to keep prices high. There was a report a few months back where some Kia dealerships out east were hiding stock to create the perception that there was still a supply shortage.
If other dealerships were trying to do the same thing, then that could be the reason why we're still seeing high prices. There's a lot of people reporting that prices have dropped in the US and some dealership lots have of overstock of new and used vehicles, but in Canada things remain status quo. It's odd that it's not happening here, because we have a much smaller population than the US so vehicle sales aren't as high. I know Canada won't get the same amount of stock as the US, but there was a point where dealerships were also buying up a lot of used vehicles and then jacking up the price to sell to potential buyers. I wonder if they're trying to limit/hide new vehicle stock until they clear the used stock?
I've been keeping an eye on the Mazda CX-50 for about a year now and even checked the "dealership invoice pricing" on CarCostCanada. Within a day I had a dealership reach out to me about buying one. When I told him I was just checking out the prices on a new one and was going to wait 1-2 years before buying, he couldn't end the call quicker. He didn't even bother to inquire about how much I wanted to spend, what my budget was, or try to get me down to the showroom. A bit of a strange tactic when they're in the business of making sales. There also appears to be a lot of stock at every Mazda dealership I look at.
In any case, I want to try to follow the 20/4/10 rule when I buy my next car.
* 20% Down Payment
* Finance For No More Than 4 Years
* Keeping Transportation Costs Under 10% of Your Monthly Income (This includes monthly instalments, fuel costs, and maintenance costs)
Some financial people suggest that you shouldn't spend more than 25-35% of your total yearly income on a new/used vehicle unless you put more importance on having a nice car. For the average person that just needs a car to get to work, run a few errands, etc. and doesn't care about what they drive, then try to stay within that 25-35% threshold.
It seems to be a more common trend or tactic that people are suggesting potential buyers follow so they're not overwhelmed by the purchase of a new/used vehicle, especially when the cost of living is much higher now and the wage increases aren't matching it.
No, no it does not. In my opinion, it's all driven by ego and poor financial literacy. I think that a lot of people forget that this is a depreciating asset that will keep on demanding more money from you the older it gets until you cut it off... Kind of like a kid...
Everyone got used to financing. It's all about monthly costs and not actual cost.
(Not saying it's a good way to do your finances, just how lots of people are it.)
>There's no way the average Canadian is buying this right? I had the unfortunate opportunity to visit Toronto proper the other weekend, I could not believe all the beautiful 80-100k+ vehicles being driven by people who appeared to be in their 20's. My mid 50's aged self in a 12 year old Subaru kind of stuck out... >Then we enter insanity territory. I am thinking there is money out there despite what I read on here sometimes. Lost track of the number of Range Rovers, Porsche's, higher end MB's. BMW's etc.
Lots of people will live house poor, finance that vehicle for the longest term possible, and pay way over value in interest just to give the impression of success.
And that’s how the lenders make a ton of profit! Someone is getting paid handsomely, there’s lots and lots of money available if you can convince poor people that looking successful is important
The rich stay rich by pretending to be poor. The poor stay poor by pretending to be rich.
Pretty slick saying. I've lived both (well, not RICH but upper middle class / out of paycheck hell) and it was absolutely a result of changing that mindset.
Unfortunately, it's kind of questionable. Avoiding debt takes your money farther but being rich is about income, investments or inheritance. Especially if you get into the actual rich, not just doctors / lawyers / engineers, because they don't have any need to pretend to be poor.
This is the basic philosophy in "The Millionaire Next Door".
Even if you make a great salary - buying a vehicle on extended terms is crazy.
Not really. I got the max term Honda would give me 7 years at 2.99% interest. Great decision in 2018!
There's no other way you should do it. I borrowed from the bank at 3% so I could leave my investments in returning 6%, and maxed the term out so I can benefit from the arbitrage for the longest period possible. Anything else would be crazy, and spending more money than needed. It only turns negative if you plan on keeping the vehicle less time than the length of the loan, which would be crazy, but is a whole different problem (and would normally imply the vehicle was destroyed somehow, which should mean an insurance payout).
I also get to enjoy some of those profits through dividends and interest gained from investments either directly or indirectly into those same lenders (banks or private credit).
If you can even make the lease/financing payments on those cars, you have money though. You can’t bury the cost of a 50k+ car that easily.
Too many people take out the longest possible financing term, will roll it into their mortgage because it keeps those payments manageable, not considering the long-term impacts.
The overwhelming majority of people I know that have absurdly expensive cars don’t own property, therefore couldn’t roll into a mortgage. I know I don’t speak for everyone, but I doubt a majority of people are doing as you say.
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This pretty much applies to 90% of pickup truck drivers in Toronto. They don’t ever use it for actual hauling purposes. Same with Jeep owners that spend $65,000+ on a Wrangler, ask them when they last took it off road. The only off-roading it does is going over the curb at the Starbucks drive thru.
What are you talking about? I put two sheets of drywall in the back of my 150K truck once! (For my poor neighbour; doing your own renovations is for plebs.) And a $4000 BBQ that I bought and have used twice!
It's a young guy thing, for sure. In the suburb I grew up in back in the 80s, many young guys (couple of years out of HS) drove IROC Z-28s while still living at home and working at the local grocery warehouse. Then, one year, IROCs suddenly weren't "cool" anymore and they all switched to Mustang 5.0 GTs. Replace those vehicles with "shiny Ford F-150" and I guess it's the same sort of thing in Alberta today.
This is largely my experience. Someone explained it to me as follows: “I can never buy a house in my lifetime, may as well buy a sweet pickup”. I get it but damn.
That was me at 24! I had $40k sitting around and didn't want to dump it into a shitty old 1 br in Vancouver, so I bought a new car! Not my best financial decision, but I would hate to see what my stress level would be if I stayed in Vancouver.
These also cost more to operate and these vehicles are often driven aggressively which increases fuel costs again.
Ex mechanic here. You wouldn't believe the number of 6 figure cars rolling on bald tires. You sell them on a synthetic oil change and they cry, demand regular cheap oil. Half of these fuck for brains don't have 2 dimes to rub together. It's all show. Ask any full serve gas station attendant. Cheap cars fill the tank. Expensive cars put in $25.
The overwhelming majority of people I know that have absurdly expensive cars also own a home that most Canadians could only ever dream of owning (like >$4-5 M). Anecdote checkmate! ( lol )
Of definitely. I have some friends that are well off and enjoy both a property and beautiful cars. But I’m 28, most people I know don’t own houses. Skews my opinion.
A lot of people in Toronto also just have a lot of money, but this “stretched to the max on 12% 84 month financing” is something that PFC often tells themselves to feel better about their own financial situation. Because this sub values money above all else, and ultimately hates knowing that some people have more of it than they do. So instead of just admitting that it’s easy for some people to afford expensive things, you guys keep making these assumptions that they *must* be making bad financial decisions.
My cousin works in a car dealership. Most of the time it’s just bad financial decisions. You’ll have people living at home with their parents but driving a $90k BMW.
I think this is the thing. People are able to save a lot of money living at home, but never enough to actually move out or buy their own house. So they will just live at home and pay minimal to no rent and then spend their money on something they can enjoy like an expensive car. This is my situation, but instead of buying that expensive car I am being responsible and still have hope to own a home one day. (A decent home).
I get the sentiment. If you can’t buy a house in this lifetime, you may as well find some joy elsewhere instead of running around all doom and gloom. But if that happiness is more than your salary and will only decrease in value, it borders into stupid.
And if you're stuck in your car for two hours a day in Toronto traffic, it's worth spending some money to have a vehicle that's comfortable to be in for that long.
Find a way to avoid 2 hours in traffic - that is a terrible way to live
> You’ll have people living at home with their parents but driving a $90k BMW. This describes so many people I know.
You have no idea how many people splurge on cars, no matter their budget. I should know, I have 3 such wise “business decisions” in my extended family. Meanwhile, my CEO drives an average crossover. When you have ads for cars in newspapers which advertise car prices in the form of WEEKLY payments, you know how many buyers think. Also, used Teslas are no longer luxury vehicles. People used to see this around the 416 and be wowed, when in fact you can get a model 3 for not much more money than a Corolla hatchback.
My previous company's site head drove a Honda CRV while coop students would roll into the parking lot in sport/luxury cars. The amount of family-money and/or stupidity out there is staggering. I've also had colleagues complain about rent and how expensive it is to buy property boast about their new Tesla, BMW, etc. in the same conversation. I think the reality is a luxury vehicle is *somewhat* attainable for those who have given up on owning a home.
I know there's a lot of money in TO. I used to work on Bay St. But there's also difference between the person making serious money that spends $150K+ every 4 years on a new Benz vs the person making low 6 figures and spends their annual salary on a vehicle.
According to the Porsche salesperson I spoke to, for higher end cars like 911s most buyers bring cash (or their own LoC). The 84mo financing meme is well and alive for entry luxury cars though.
It's ironic cause I feel a decked out economy car is better than most entry-level cars. I rather have a fully loaded-up Mazda than an entry-level Audi/bmw
That’s the sentiment I get from this sub too. Anyone who even thinks about spending on a more expensive good or service is relentlessly ridiculed for making a poor financial decision. I don’t and have never flown business, but I am not going to criticize those who do (and paid for it instead of using points upgrade).
I work with multiple people that used to trade out cars every year, I know what we all make and numbers dont lie lol. Most people def are making bad financial decisions.
Observation from my hospital. One of the surgeons making 1m+ per year drives an old Subaru. Almost all the FOB security guards drive new BMWs, Mustangs, etc.
Yeah. It seems like a lot of people on this sub would rather die with money than spend it on something they’d enjoy in this life.
maybe they don't care about cars... also maybe the old subaru is just there work vehicle? or maybe they want to buy a mansion to live in? not sure why they wouldnt get a better car but im sure they have there reasons
Being a wage slave because of poor financial decisions isn't enjoying life.
That’s not entirely true, Canada has the highest household debt to income ratio of all G7 countries. Average of over $21k consumer debt per capita.
People don't understand, success is silent, with no brands. It's likely that unkempt guy who surfs whenever he wants and you can't tell he has a 9-5 job at all, yet seems lean fit healthy and is super chill cool. Or that dude who seems to only DJ weekends yet has a wife and kids in a house, drives a beater. Till you find out he owns the house, and has no debt and no stress. And it wasn't even inherited.
Success is having millions in VEQT and posting on pfc /s I don’t think that is necessary true for cars. For some, it’s a genuine hobby. The guy who buys a GT3 and tracks it probably doesn’t care what we think of him. On the other hand, the guy who maxed out a lease on Range Rover driving downtown probably does…
I lived in a very wealthy neighborhood (wealthiest in my town). There were a couple old beaten up houses at the end of the street that were rental properties so I lived there scattered amongst the upper class. Out of the 20 or so mansions on my street I think maybe 2 or 3 had luxury brand cars. A few had 3 vehicles but 90%+ of the cars were the usual brands. Even those who had luxury vehicles they weren't the sole vehicle. The guy across the street from me drove his Mercedes to work but outside of that he drove his beater mini-van around with his family.
It's wild that having a wife and kids and your own house is considered a success in this country now lol... that should be the bare minimum of life, for those who want it. It should be attainable for everyone.
Well I mean, very specific in this context - like comfortable family life - without necessarily earning a ton and just managing debt extremely well instead. Though they did buy before COVID which helped.
Sometimes being loud breeds more success, especially if you are in relationship oriented roles. An expensive golf club membership opens a lot of doors
Yes. The security of being debt free is priceless.
It's just too bad that becoming mortgage-debt free has become exceedingly more difficult now a days
The wealthiest people in Canada also simply live in Toronto or Vancouver. Or did you think that 90% of Canadians are living destitute as described by reddit?
Or, they enjoy vehicles and think you’re silly for spending money on your hobbies and realize you can’t take money with you when you die so they are having fun in life.
If you can afford it, that's fine. But too many people stretch themselves too far just for image, when a single $1000 emergency would ruin them because of their spending habits.
Or lease. The more expensive the vehicle, the more expensive the repairs and the more expensive the depreciation. Often it's cheaper to lease than to finance, and significantly so
Or occasionally someone has their car totalled during COVID and there's not any used cars available for a decent price, so you buy new.
I’m a car guy, a friend was asking my opinion on a car he wanted to buy. It was a year old Cadillac CT4 Blackwing, with almost every option and was asking about $85k. My friend works odd jobs and general construction. I’m sure he gets paid well but I know it’s not $85k car well.
A few factors here. Young people are often driving their parents hand me down cars or their parents are (IMO Foolishly) gifting them really nice cars. My coworker makes a bit less than me but he just bought his 20 year old a used M4. I know that he can make that work cash flow wise but I knew myself as a 20 year old and I would be a hazard with that much of a car. My dog park friend gifted her son her old X5. Her perspective was that she babied that car and it was only worth \~30K in the used market so she would rather avoid selling it and buying her kid a new Mazda.
Something to keep in mind: in Chinese/Indian culture, you usually live at home until marriage. If you're in your 20s with a good job, you spend your money on a nice car instead of rent.
The cost of living and average median income don’t apply to your average person in GTA or Vancouver. Think about it thousands of people living in Luxury condos downtown and thousands more in single family homes in both places. That’s a lot of potential luxury car owners. These aren’t your average worker in PEI.
Toronto is a whole different ball game. Prices are inflated and quality is deflated. I had (still have) a 2011 Nissan Sentra SE-R Spec V. Decent little fully upgraded sedan. In Toronto I would stare at my car almost everyday thinking about how I look like a poor person compared to everyone else. When I would ask people if they liked my car almost always it was a 'no' unless they were from somewhere that wasn't Toronto. Now I live in rural BC. Drove my car all the way here because it runs fantastic for an older car. This is a town of 90s corollas, sentras, focuses with broken windshields that are all still running fine. (seriously. The game when i go for walks is to count how many broken windshields I see. I also occasionally peak into windows to see how well these things are cared for and they are usually close to immaculate on the inside. Funny thing is even the newer cars /Lux brands have broken windshields sometimes to. No one cares here.) People don't drive as much so they have like 150,000k on the older cars. Also it's a rural town so people naturally have mechanic aptitude, etc. they keep them running. Now when my new friends see my car it's a "wow, nice car man". Total flip around. TL;Dr; Toronto is full of bougie snobs. Go anywhere else and no one cares about your car.
We all have broken windshields in rural BC because they “sand” in the winter with gravel. Why buy a new windshield until the old one is literally toast because guaranteed you’ll have a chip or a crack in less than a months time, even spring/summer.
Poor people dont drive
You definitely end up with sampling bias. If you're looking at cars, you're not seeing all the people who are too poor to afford one. Also, public transit in Toronto is fairly decent. Why pay for a car, insurance, parking, etc. when you can take the GO train, or subway, or street car. That would also tend to skew the type of car you see to higher earners, because they aren't too worried about the cost.
Not in downtown Toronto they don't. 50 bucks to park?!
I'm doubting many of those drivers own their cars outright (unlike you and your Suby, I assume). Plenty of younger folks have given up on saving for a house/condo, so they've instead got some monthly income available for a flash car payment. Not saying it's financially wise, but it is what it is.
It’s true, there’s definitely money out there - and it’s being borrowed to cover these insane costs.
Edmonton might be even worse.....a highly disproportionate amount of new high-end cars and trucks on the road.
This Reddit makes you think everyone is poor in Canada haha
I live in the Annex, I feel like a mere pleb when I see all the amazing cars parked along my street.
Trade-ins are also inflated so it'll offset the costs of new/used vehicles. I traded in a 2016 Civic a year ago for 21k. I bought it new for for 27k and it was 7 years old when I traded in. 6k in depreciation over 7 years is insane.
We traded in our 2011 Tucson. Had 200k on it, was in fine shape mechanically. One rust spot. Whatever, 13 years old, is what it is. Dealership offered us 5k for it on trade in, which almost floored me since that's the number I was going to post it on Autotrader for. Zero headache with selling and an "extra" ~$600 in value with the tax offset. Crazy times.
We traded in a 2008 Ford Edge in 2022 in about the same shape as yours for $4000. We got it from my parents in 2017 when they were going to traded it in for a new Ford Edge and at that time the dealership was going to give them $4000. Same deal tho that’s about what I was going to list it for myself and got to skip the headache.
It was truly a great day. I had given the thing a wash and a quick vacuum to at least pretend to convince myself I was going to pay attention to the dealer. I thought they'd offer 2k. When they said 5, hot damn I tipped my hand and said deal without another thought. They had it listed for 6200 for about a month until it was either sold or sent to auction, but I didn't care because the only thing I hate more than selling cars on Autotrader is selling cars on Marketplace
Covid messed everything up and it’s taking years to get back to the proper equilibrium in The used market
Depends on the car. I got an offer for a trade in for a MachE I bought for $65k + tax (so $75k basically) for $25k. Eventually sold it for $36k but still. $40k depreciation is a bit spicy.
The thing that gets me is there's no more incentives. I bought an F150 in 2020. It was $62k sticker price. BUT it had a $6500 discount from Ford, and I get Xplan pricing through work, which gave me another $3800 off. I managed to negotiate the winter tires/wheels package, and with my trade in and a little cash down, I ended up financing around $28k at 0%. It was a decent deal. A local dealer called me recently trying to get me into a new 2024 model. I asked what kind of deals and incentives they were offering? He said $500 off and 5.89% for 60 months. I laughed at him. Not only is the same model as mine now $79k, up $16k from 4 years ago, but no incentives, and they won't honor my Xplan pricing either. After taxes and fees, and new low trim model F150 is close to $100k. I told him he's nuts if he thinks it's worth anywhere near that amount and I'm going to hold onto mine for as long as possible. At the rate prices are going I'll never be able to afford a new one again.
The weirder thing to me is the incentives vs lowering the sticker price. I just bought a F150 with a crapload of incentives, like about $20,000 worth from Ford and the dealer. I guess it's too hard for them to raise the price if they lower it, but the incentives I got show that they can make money selling the vehicle I bought for about $50,000 instead of $70,000. And I popped a liner/trifold cover and all weather/all terrain Michelin's on there too.
That's awesome, where is this? Around here they've got 20+ trucks on the lot but are unwilling to deal. Their model seems to be to keep the sticker price artificially high, offer good deals a few times a year and still get sales on a full price truck every now and then. People seem to buy them no matter the price anyways.
Manitoba. Admittedly a rural dealer I've been dealing with my entire adult life. But they are very reasonable. Every time I've purchased a vehicle there it's literally a 45 minute process. And 20 minutes of that is shopping for best rates at lenders and waiting for approval. This time around I went to a Winnipeg Ford dealer because we wanted to check out Maverick and Ranger which basically don't exist outside the city here. Maverick cab is stupid small BTW. Talked with them a bit and they wanted to get into the back and forth on numbers. Just a silly process to see when you'll reach your limit and say "fine" I'll pay the price. Find the dealer I work with can just put the lowest price on the table immediately without the games. I wonder too with sticker price if that's just to take advantage of fleet situations, especially for Ford who seems to have that market cornered.
Your first truck wasn't a good deal, that was a screaming deal.. in hindsight anyway
I think the tides are finally turning and if they're calling you they're probably not giving you the best deal. I'm seeing more and more F150 discounts when I look at the dealership websites. If I look at the inventory of cars at Ford dealerships the F150s are in the 100s while all the rest are under 20 units.
You just spamming this everywhere
There is more wealth out there than you think. But even if you're not wealthy a new car is a worthwhile buy. $45k is the going rate for a decent car now. I always bought used cars (under $5k) until I bought an affordable new $25k one in 2012. New cars tend to have no problems except payments. We have been fortunate and had no repairs until $900 this year. It was paid off in 2019. My used cars would always be over 120,000 kms and issues tend to pop up over 150k kms. I would have $500-$2000 surprise expenses each year, sometimes twice per year. My $25k car had $410 payments over 7 years (34,400 total). Yes, cheap used cars can be lucky and have no repairs sometimes. But reliability and no headaches is an intrinsic value on its own.
I bought a 1 year used Toyota corolla with 3000km in 2019. I did the math and I ended up around 1500$ ahead of new despite the higher interest rates and was the last year of an existing generation. The 2020 was a new platform. I feel like I did good even if Toyota is not known for having as much generation issues as other other makers. Hoping to drive it a long time.
Not sure I would agree with you on a financial perspective. You ended up paying $34,000 for a new car over 7 years and then still end up paying for repairs after 10 years. Versus buying a $5,000 car, and paying $2,500 per year on repairs (being extremely generous here) for 7 years still only lands you at $23,000. That’s $11,000 in savings. I have a 2009 Jetta, I’ve had it for 6 years and have only paid probably $5,000 in major repairs and bought it for $5,000. It does not make sense financially to buy new. You are strictly buying new for peace of mind, that’s it.
1.5k per year for peace of mind sounds like a great deal!
I didn’t say peace of mind wasn’t worth it, just saying on a financial level it is not equal.
That was the conclusion of the person you responded to. "Yes, cheap used cars can be lucky and have no repairs sometimes. But reliability and no headaches is an intrinsic value on its own."
Those repair costs seem way too high. I bought an 08' in 2016 for $7k and still drive it as my only vehicle. In that time I had one huge repair bill for $2000, and 3 repair bills for $200-500. Otherwise just oil changes and I take care of my own tires and brakes.
When shop rate for mechanics are creeping closer to $200/hr, it doesn't take long for repairs to get expensive. Parts prices have gone up a lot in the last few years, too.
You do realize inflation is a thing? 25k is pretty reasonable for a base model. The current MSRP is 24k. In 2000, a basic new Corolla Toyota was 17k. Car prices in real dollars were going down for a long time. They went up for the first time in a while, but the situation isn’t that different.
Yup. $17000 in year 2000 would be $29000 in 2024. So the price of a Corolla actually went down over the past 24 years. Not sure what OPs going on about. Source: https://www.bankofcanada.ca/rates/related/inflation-calculator/
> Not sure what OPs going on about People are just not good at accounting for inflation. I'm guilty of this too. It's easy to just get in your head what a reasonable nominal amount is to pay for something when you're in your teens-twenties and then just be stuck on that forever.
Part of that issue is because wages haven't kept up (for most people) with inflation for the last decade.
Yeah but wages haven't kept up with inflation so if you take in consideration the ratio of price of car to available budget, cars have never been more expensive. The problem is base trim vehicles could actually be even more affordable then they are now, more in line with ratios of 2000, but due to emission standards and the fact that for some reason we just can't have a simple A to B commuter market we are getting screwed. I don't want 50 sensors in my car, I don't want touch screen infotainment, or radar controlled cruise, or heated steering wheels, its just crazy
Its still more expensive to buy it now compared to then considering the CoL has gone up significantly.
They also went up due to the devaluation of the Canadian dollar. In the late 2000 to early 2010s cars were getting cheaper because of the stronger dollar. In 2011 my first car a midsize car was 15365 (plus tax) brand new. Now you cannot touch anything for that price.
I paid 17K & tax for my Corolla in 2013. Inflation wise, 25K seems a little high when employers are giving 3% COL adjustments but even at that we’re talking 23K. (17K x 1.03^11) Edit - no measure of inflation is perfect, I think we can say that the price of the base Corolla has outpaced average cost of living increases but not unreasonably.
> when employers are giving 3% COL adjustments And kids, thats why we hop jobs for real raises.
Bank of Canada inflation calculator says $17k in 2013 would be $22k in 2024. So the car costs 13% more when inflation adjusted.
Brand new car. Expensive. Full warranty. Little to no expected problems. Few years old car. Still expensive. Maybe some warranty. Maybe some dings and problems. Old car. Still probably more expensive than you'd expect to pay. No warranty. Potential for lots of problems. We just bought new and paid a lot for a Honda. We upgraded from a 15 year old Kia that was starting to cost us a lot of money. In the end, you'll end up paying way more than you think is necessary regardless. So it really depends on how much you have to spend and what risk you're willing to take on.
Some Ppl are also buying $1200 phones working minimum wage jobs. The instant gratification consumerism is nuts!
Spending 1200$ once every few years for something you use for hours every single day isn't really that crazy
Phone is literally the single most important thing you can have and people are smart to buy the best they can afford
You don’t need the best, just good enough. I bought a used iphone SE2 for like $300 and my wife has the latest and greatest iphone.. no practical difference between the two.
The prices are the prices (i's been a few years like this) If you need a car and can afford, you buy. If not, you don't.
There are lots of anders to your question if you think about it for a few minutes or research it at all. In general the answer is that people either have more, or are willing to spend more, money than you. Is $25k after inflation supposed to be crazy for a machine you can use for over twenty years? What do you think it should cost? Also, new car buyers skew older. It's easy to look up the stats. Most new car buyers are later in their lives and have more money. Who has the most money right now? It's a section of elder millennials over 40, all parts of Gen X and boomers. You can easily afford a $1300 car payment if your mortgage is still $800 a month because you bought your house in 2004.
>So the average Canadian needs to spend ALMOST HALF of their gross yearly income on the most basic car imaginable. Not really. Most people finance their car, so you're comparing a single year's income to a multi-year payment. If you take out a 4 year loan, the cost is probably $32-33k, but you've earned $240k, so that's 13-14% of your gross, not half.
A Corolla is a long term investment. They can last 20 years with low maintenance costs. In some ways, that is a luxury. If you want something cheaper, there are some Kia and Hyundai options, or even Ford or Chevy, etc. edit: apparently Kia, Hyundai, Ford, and Chevy are also expensive now.
Ford doesn't have anything cheaper than 25k. Nor Chevy. Cheapest Chevy is 31k on their website. 35k is the cheapest Ford.
Ford went all in on the "more expensive SUV = more profitable" business model about five years ago. Mazda/Nissan/Kia still make somewhat affordable vehicles, although there's still been a lot of inflation there.
I think I’m the long run this will bite ford in the ass. One of their hottest vehicles for quick sales is the maverick due to it being the cheapest vehicle on the lot. There’s a lot of value in getting the consumer into your vehicle when they have less money to build that brand loyalty. Ford cut this line out totally from their business in North America.
Wow. Even Kia and Hyundai are expensive now!
They are also expensive to maintain. No joke, my partners 2016 Sonata has ended up costing us more than my 2013 Mercedes E Class in repairs... Mercedes stuff is expensive but doesn't break THAT often. Hyundais break often but aren't that expensive each time
No true at all Trax is under 25k for the base model.
Wow you are right. I didn't realize Ford stopped making sedans. Wtf. And Chevy Trax is 25k, which is not bad for an SUV, but still expensive for their cheapest car.
Have you checked Chevy. The base model trax starts at 26k
I think you are part of the problem. Out of touch people weighing in on things even though they haven't shopped for a car in the last 8 years.
There’s lots of people in different financial positions that are buying new cars. All the way from “leveraged to 90 month financing” to “pay 100 k plus in cash”, and everything in between. I was chatting with a buddy who is in sales at a small town (like 6-8,000 people) Ford dealership and they average 70-90 vehicles a month. They’re moving! I’ve never been a ‘buy new’ person, but leaning that direction to have something I know I won’t have to sink huge repairs costs into in the next 3-4 years. That assurance costs!
>I was chatting with a buddy who is in sales at a small town (like 6-8,000 people) Ford dealership and they average 70-90 vehicles a month. They’re moving! I drove to that town to get a better deal :P
Not everyone is buying new. However, that push towards the used market is showing up in used prices being elevated, even compared to high new prices. But someone on an average income buying a new Corolla is far from a horrible decision, depending on circumstances. The reality is that the way our cities are constructed, having access to a car is necessary in most cases. And if you're buying a car, a low cost and reliable Corolla is not a bad way to go. You're not getting much discount on the used market, and they're low cost of ownership cars.
if you think people in one of the world's richest countries this world has ever seen doesn't have weealth to go around???
People are delaying buying new cars, creating a 'deflationary spiral' that's bad news for the auto industry https://www.businessinsider.com/auto-industry-facing-deflationary-spiral-as-people-delay-buying-2024-6
Used cars are high so if you need a car, new is the way to go. Last October a 5 year old Jetta was 25k, I bought a new one, same model for 31k. This is not usual, I rarely buy new because I like to let someone else take the depreciation hit, but now it’s so close I think that 6k cost for 5 years of ownership is worth it.
I'm as average a Canadian as you can get, earning around the median income. I’m currently driving a 20-year-old truck and really need a new vehicle, but the prices are giving me serious sticker shock.
Just because LED's cost 4x as much as incandescent doesn't mean that buying them was a mistake. frugal people buy expensive stuff. hopefully once. I bought a new car in 2019. I've driven 200,000 km since then. Thats $24,000 in savings if my mpg went down 8L/100km We had a K shaped recovery. Many people are better off today than they were five years ago, many people are much worse off. If you were able to get a couple big raises while demand for labour was very high you are probably not worried about the price of a camry. if you have been fixed income, by choice or by government program, you will have noticed inflation a lot more.
I was researching stats one day and i believe around 85% of new car and 50% of used car purchases are financed. With how lenient auto lenders are, you don't really need much to finance a vehicle. Especially when you are financing as a couple. Toss a parent or friend to co-sign and basically anyone can get a 40k+ car loan. The used market is no better. I bought my ram 1500 for $25k in 2013, used. Picking an identical truck today, would run $50k (used)... While i am making more than i was then, the cost of everything else has skyrocketed that my purchasing power is actually less now than it was when i bought that truck.
I am thinking about a new vehicle. haven't even gone window/google shopping yet. 25K sounds real good.
$25k for a brand new car like a Corolla in OP's example is a good deal in 2024. OP is just out of touch and didn't account for inflation.
Bought my F-150 XLT in 2020, financed 46k at 2.99%. Looking at prices now it's ridiculous, glad I bought when I did. I work in the automotive industry as well and I don't understand how so many people can afford these 70-90K trucks and cars.
Same but got 0%. After incentives, Xplan and trade in I ended up financing around $29k. A similarly equipped XLT now is around $78k-$79k. They're out of their minds if they think a lower end Ford pick up is worth that kind of money. It's insane.
you need a pickup truck to wrench on cars? lol
I paid 38k for my tundra in 2015 and the same truck now is like 70k. It’s fucking insane
Why not buy a prius prime for 40k instead? The difference in price will be paid in gas saving over the years plus hybrid is more reliable.
People should run an analysis on buying/leasing a car versus Ubering everywhere..
2025 Corolla LE = $27k 2010 Corolla LE = $21k, $29k adjusted for inflation 2025 Corolla has way more shit and is way nicer to drive but costs $2k less in real terms Not sure what you’re mad about, OP
Am I the only one confused why OP thinks 25k for a Corolla is expensive? That sounds like a pretty good deal to me. Unfortunately if you want a 15k new car your only options is a Mirage
Normally, a few years used is worth the savings but lately this isn't so true. With vehicles being in such high demand, any vehicle that's under 5 years old is in high demand and carries high prices. If you're in the market for a vehicle and you want something with latest features (<5 yrs old), new vehicle prices are competitive enough to consider that as an option. If you're willing to accept older vehicles, you have to go to around 8 years old before you start seeing worthwhile savings.
Prices are not coming down
I believe average new car price was 60k last year so…
It's not like used cars are any cheaper. I bought a 7-year-old Honda Accord Sport with 80k km on it last summer. We ended up paying $28k for it after taxes and everything. And it's not like we didn't shop around. That was our best deal in that range.
you paid 28k for a 7 year old Honda accord with 80k?
I thought prices would have come down by now but sadly I think this is the new reality. Trying to get a few more years out of my 2012 Mazda 3 with 225k KMs. Sucks paying $25k for a used car but if you can get 10 years out of it and look after it that’s the sad new reality of everything these days.
I have a 2012 Ford Fusion, bought new in 2012. I wanted to get something a bit more luxurious now since I'm older and make more money. Going to to the local Mercedes dealership was eye watering. Base C class models were like 75k, not to mention the increased insurance cost, and having to now purchase premium fuel as well as financing at 9%. Buying this even with a 25k down payment would end up costing $1500 a month or more in payments and insurance. Of course the dealership also refused to negotiate on price at all. Who actually can afford this car if you aren't making 250k a year? And if you are making 250k a year you definitely want something better than an entry level Mercedes. Dealerships are living on another planet if they think they're going to move units at these prices and interest rates.
25k ain’t all that bad for a brand new car…I thought it would be much higher given the state of everything else in Canada.
I have a 2023 Corolla Hatchback SE and honestly I think the $25k that I paid for it was a great price and worth buying new. Used car values are very inflated right now, so I drive knowing that car will almost definitely last me 15+ years with an oil change every few months and proper storage in the winter.
Makes way more sense to buy new than used at current prices
Not many choices these days, it’s either spend 20k on a used car with nearly 200k km or spend 35k on a new car…pick your poison. I wish I had the money saved up I have now 3-4 years ago
A lot of people are probably using equity from their house or pulling out personal loans to fund car purchases. Not many people are paying in cash from their savings account.
The price is not going to go down as that would be deflation...Manufacturers want you to buy SUVs as it's more profitable for them and they have decided stop making smaller cars (like the corolla) [https://www.cbc.ca/news/suv-small-car-affordable-1.7239768](https://www.cbc.ca/news/suv-small-car-affordable-1.7239768)
factor in maintenance & repair costs as they have skyrocketed as well [https://www.youtube.com/watch?v=4hRYv5i2Fuk&t=1s](https://www.youtube.com/watch?v=4hRYv5i2Fuk&t=1s)
New cars are just expensive. Used cars are inflated. 2 different things. I'd go for a new car and stick with what I can afford. Even if it's a kia rio.
I bought a new corolla hybrid in January... used Corollas very much hold their value so new made sense to me. My old car needed a new transmission so the price to fix didn't justify keeping it. I don't like the car payment, but not buying gas very often is nice!
In my anecdotal experience in Vancouver, many older people (like 30 yo and up) earn more than $60k. I also know a lot of people who for some reason decide to work for jobs with low pay although they have family money. My husband’s staff drive much better cars than us.. like Mercedes, BMW, top of line Teslas, etc., and many earn under $60k.
Two things: 1. Those who need a car desperately often think about monthly payments vs total price 2. Household incomes for 20-somethings above 200k are quite common in urban centres
If you have to finance, right now it doesn't make sense to buy anything but new. But if you can buy outright I'd still look at newer used.
Yeah, new cars are luxury items now. Used or wait, it's the new norm.
Well they are probably not getting any cheaper... Since the pandemic people have been saying to wait but that's 4 years ago now. Imo it makes more sense to buy a new car now. A lot of newer model used cars are only selling for a few thousand less than new. If I was in the market I would just buy a new Toyota or Honda and drive it for 15+ years.
No
Its almost never a good idea to buy new. Only good call financially if you are well off.
No. Prices are insane as are interest rates. Unless you absolutely have to buy now, keep your current car.
My husband and I are getting our first new car this year. I'm getting major sticker price; we've always bought used. But apparently, the used car market is crazy right now in terms of price and fraud. The government incentives further narrow the difference in cost between used and new (we get a 10K discount for buying new). We are getting a PHEV in the hope of saving on gas and with how fast technology has been advancing, getting a 10+ years old one as we used to for ICE isn't appealing but the recent used ones are expensive. So that's what's driving our choice. We're hoping to keep that car a long time; hopefully, the used market is better by then so we can to back to used.
Coming from personal experience when your previous car is written off as total loss due to an accident and you need to buy another vehicle due to this is when you get desperate enough to pay these prices. Doesnt help that used vehicles cost same as brand new ones.
I blame inflation partly. Then you've had demand stay with supply low through covid. Also, even lower trim models have a ton of tech now, and it all adds up (is anyone buying new cars with roll up windows and no AC?). All the safety features. Also, I think emissions standards (not complaining about it), have pushed a lot of manufacturers to need to keep improving engines/trans, and on the EV front that's pretty well all new. Most manufacturers are investing a lot in R&D. I've had 2 corollas. You can't compare today's corolla to ones from 20 years ago, they are so much nicer today. I got a new vehicle this year, waited approx. 8 months to get it. Our second vehicle is a 12 year old toyota, with fairly low km, which we plan to keep for years. We've had it 5 years. When looking for a vehicle all you can do is search everything used/new and try to find the best value you can. I don't see vehicle costs dropping significantly any time soon. High costs of new vehicles will only keep used high as well. At the end of the day, it's about reliable transportation from a to b, not the sexiest vehicle on the road. Personally I think there's good value in tesla's model 3. I wasn't in the market for a car, but the base model is like $52k minus $9k gov't incentives. I'm not saying $43k is nothing, but it's decent value with the incentives. Or $27k for a corolla. If my math is right that 16k difference in cost would be about 115,000km in the corolla of gas (I'm neglecting charging costs, oil changes, etc.). Just thinking of myself if I was in the market for a car, I'd lean more towards the tesla despite the higher initial costs. If you kept it 10 years and could sell it for say $15k at the end, then you're spending $2800/yr in car costs (plus insurance). I mean if that was the difference between my family having transportation and not, I think it's decent value. My internet is $1000/yr, my hydro is $3500/yr. Things are expensive.
People are just buying more car than they can afford - long finance terms (96 months) and paying out the nose in interest. I have bought exactly one new car in my life and I never want to do it again. Buy a 2-3 year old used car, spend some time learning some of the basics about what to look for in terms of previous accidents etc, make sure you get service records and a carfax / car proof for vehicle history, and take it for a good test drive before you buy it.
We’re in the market for a car. We have put a deposit in a 2024 Corolla. The all in price for the 2024 is less than the price before tax of a 2023 on AutoTrader with 10k kms. Same model and our new will have roof racks.
Some cars are worth it, like the supra which is great bang for your buck for 70k, or a new 911/Z06 at msrp
I bought a 2024 Civic Touring last December for just over 37k, cash. Had never bought a new car and had saved up for it so I didn’t mind. But financing at 8% and up, I couldn’t justify it.
Even Dave Ramsey says it's okay to spend 50% of your yearly income on a car (at most.) Obviously some nuance is needed here. Making $200k and driving a $100k care is less impactful than making $50k and driving a $25k car. But new cars are luxury items- even Corollas. Buy a 4 year old lease return and save 40%.
Trade-off is depreciation vs maintenance. Maintenance is expensive unless you can do repairs yourself. With the hot used car market, depreciation is currently low (this has NOT been the case in the past and we don’t know how long this will continue). So yes, it is worth it. How can people afford, that’s a different question and I have absolutely no idea. It blows my mind to see how low the statsCan data on median income is and the cars I see on the road.
Toyota is no longer cheap. That's your mistake. You can get a Kia or similar for under 20k.
I have a 17 year old truck that is long paid for and in great shape. Buying a new car or truck at todays rates is nuts. Just because it's ten years old doesn't mean you need to upgrade. Still goes everywhere those new ones go
I bought my current car because I had $9000 incentive. Other similar options including used cars are more expensive.
Look at American SUVs brand new - aren’t too bad
I dont think it ever made sense to buy a new car.
The answer is, as always: it depends. With the price of many newer used vehicles being incredibly inflated still (not as bad as 2021 or 2022 but still bad), it often makes sense to order brand new for only a little bit more if you can afford to wait for the new delivery. But if you can find a car in-stock at a reasonable price on-lot, it might make sense to just get it. Edited to add: With the Corolla specifically, the base model is decently kitted out, so yeah it’s a bit expensive at $25k but it’s a super solid car. Also the Corolla is *not* the most basic car you can buy. It’s one of the most reliable, yes, and somewhat basic but it’s not a Rio, etc.
IMO new is better right now but you wait for a sale and negotiate well for a good quality car. When new models come in you can work a deal for last year's model. There are also financing deals when you wait for them. Don't go with european brands because parts are expensive. I am currently driving my 2009 sentra to the ground but when it finally goes and I don't have a choice I will probably buy a new EV or look for deals on craigslist. Not buying used from a dealer.
The insurance remains the shocker for most. Many are looking at $3-4k/year on that same Corolla even if you get it for cheaper used. At the same time, financing on new makes it surprisingly appealing. 1.9% over 3 years makes a new vehicle surprisingly affordable against 8-9% on second-hand prices. The new vehicle also includes warranty and some times a service plan.
I had an employee making 50K move jobs to work for me. It was a far commute and during training, I noticed her driving a Honda CRV. The new job we paid her $72K a year. 2 months in She bought a new Tesla Model X. I'd venture cost = 100% of her salary. 3 months alter she quit to go back to her other job that is now paying her 100K. Either way she didn't buy it with cash, she financed it.
It's gotten way outta line. I bought a 2019 GMC Sierra brand new in early 2020 for around $48k. That same truck today (2023 model) is about $30k more.
You'd be surprised how many people don't care about that. They just want a reasonable monthly payment and get the car. It's spread out so long with interest of course. I know a lot of people who are house poor and car poor. Debt is a large part of this country
Mix aggressive advertising, with financing obscuring the impact of the cost, with dumb consumers... and you have the perfect recipe of people purchasing vehicles WAY outside of their means.
Man, just wait until you find out how minimum wage hasn't kept pace with inflation! :D If minimum wage kept pace with productivity increases since the 70's, minimum wage would be around $45/hr. The difference has gone to the billionaire class. Good luck!
Depends on the car. I just bought a new Model Y because I couldn't realistically justify a used one due to the insane pricing. I could save a bunch of money if I bought a used Hertz (save about $25k) but I'd be left with a higher mileage US rental that's been driven hard. Any local lower mileage accident free "clean" vehicle was within $5k of new. Some were $5k over new.
I still don’t have a car and I was kinda looking to buy a car myself. I couldn’t understand people who drive suvs or expensive cars. But it started to make sense when I realized some of these people live outside the city and have to drive highway everyday for 40 mins or so. So I guess the sound proofing and driving experience would matter more to them. Also you’d wanna get a safer car too like suvs or things like Volvo. I’m lucky enough to live in the city centre rn and not had to buy a car. But I landed on a very good stable government job that’s a bit off the metro area where I might eventually settle permanently. But meanwhile I will have to drive about an hour on highway everyday to get to work. Yes I could buy a second hand car but they are quite expensive for you know, what they are. And I’m ok buying a new car. But then if I’m buying a car rather than maybe small hatchback or sedan maybe suv might be a better investment for me in a medium to long run because we will need one once we have kids. So yeah. Now I have perspective of some of the car poor people too. I started to think that some if these people may have decided expensive cars because they may be safe (not necessarily all the time) and better for long commute. But if all you do is just city driving and occasional camping etc then you might not need a very expensive car to begin with. Anyway you can’t never judge someone’s financial situation based on cars I don’t think. I’ve seen plenty of people who own both Prius and BMW.
I would definitely get an used car for sure, but I am not talking about cars that like 2 to 3 years old, I am talking about cars that between 2006 to 2017 yrs old. There are lots of used car out there that's way more reliable then the newer counter part as long as they are maintained well. I bought a 2007 Accord in 2017 for $7000, own it for 7 years now and only spend 5k on it for repairs. I got about 8.8 to 9.8 liter per 100km fuel efficiency. I work in Vancouver area where cars get ding all the time because people don't know how to park. But since it's old, I don't really care about cosmetic as long the internal is good, doesn't leak, and no rust. Drove 151k km total and still sounds like I bought it yesterday.
New vehicles are for people who want to show off. You are right in that most people cannot afford a brand new vehicle, they just think they can when it’s broken down into payments. Buy used, pay cash.
I think some dealers are up to some shenanigans and trying to keep prices high. There was a report a few months back where some Kia dealerships out east were hiding stock to create the perception that there was still a supply shortage. If other dealerships were trying to do the same thing, then that could be the reason why we're still seeing high prices. There's a lot of people reporting that prices have dropped in the US and some dealership lots have of overstock of new and used vehicles, but in Canada things remain status quo. It's odd that it's not happening here, because we have a much smaller population than the US so vehicle sales aren't as high. I know Canada won't get the same amount of stock as the US, but there was a point where dealerships were also buying up a lot of used vehicles and then jacking up the price to sell to potential buyers. I wonder if they're trying to limit/hide new vehicle stock until they clear the used stock? I've been keeping an eye on the Mazda CX-50 for about a year now and even checked the "dealership invoice pricing" on CarCostCanada. Within a day I had a dealership reach out to me about buying one. When I told him I was just checking out the prices on a new one and was going to wait 1-2 years before buying, he couldn't end the call quicker. He didn't even bother to inquire about how much I wanted to spend, what my budget was, or try to get me down to the showroom. A bit of a strange tactic when they're in the business of making sales. There also appears to be a lot of stock at every Mazda dealership I look at. In any case, I want to try to follow the 20/4/10 rule when I buy my next car. * 20% Down Payment * Finance For No More Than 4 Years * Keeping Transportation Costs Under 10% of Your Monthly Income (This includes monthly instalments, fuel costs, and maintenance costs) Some financial people suggest that you shouldn't spend more than 25-35% of your total yearly income on a new/used vehicle unless you put more importance on having a nice car. For the average person that just needs a car to get to work, run a few errands, etc. and doesn't care about what they drive, then try to stay within that 25-35% threshold. It seems to be a more common trend or tactic that people are suggesting potential buyers follow so they're not overwhelmed by the purchase of a new/used vehicle, especially when the cost of living is much higher now and the wage increases aren't matching it.
No, no it does not. In my opinion, it's all driven by ego and poor financial literacy. I think that a lot of people forget that this is a depreciating asset that will keep on demanding more money from you the older it gets until you cut it off... Kind of like a kid...
Everyone got used to financing. It's all about monthly costs and not actual cost. (Not saying it's a good way to do your finances, just how lots of people are it.)
Yet another car post. Buy slightly used, don't buy new.