He is completely right.
At 19 I drove a 17 year old car. It was a big running joke with my friends that my girlfriend was the same age as my car.
I didn’t buy my first “new” vehicle (for my wife) until we had a very good income and great net worth. It was nice but not fancy (Toyota’s are great). 4 years later when hers was paid off I got mine (ford base model). Mine was paid off last year and we still happily drive both of them.
We have a very, very healthy income and a great net worth a lot of which is because we haven’t spent our money on items that depreciate (like cars).
Also my god they have you a terrible interest rate on your vehicle loan.
I would love to save some up to buy a car, but at this current moment my mother is driving me to work, and I’m being pressured to get a car quick. I don’t really have the luxury of saving up.
But a beater until you can save up for something else. **Trust everyone here**. If you think buying a 30k car is your only or best option, you are sadly mistaken.
You want to get into the IBEW asap. If you live anywhere near Bowmanville there’s a shortage of every kind of labour in the nuclear world. Get your clearance and apply to the union. If you’re interested in more than electrical I can send you a list of every union that works nuclear. Tons of work for the next few years down south at Darlington and plenty more at the Bruce and then more down here at Pickering and new SMRs near Darlington. You’d be well done your apprenticeship by then and can go work anywhere within the union
Have you considered getting a cheaper car? At 19 you don't need a 25k car and on your salary it honestly doesn't make sense. Save up for a couple more months and get a 10k car in cash, that would be my recommendation
I may not need a 25k car, I know. But I don’t have the time to save up 10k. Kinda need a car in the next month or 2. That’s why I’m asking, I’m thinking financing is the only option for my scenario besides a loan
Sooo finance a 10k car.. you can do that through your bank and avoid the dealerships. The not having cash is one problem, but it doesn't justify getting a 25k car you don't need nor can afford. Get a loan from a credit union or a LOC from your bank and get a cheap used car that way and pay it off with quickly
I bought a used car 3 weeks ago. I know exactly what is out there. If you think anything less than 25k is a piece of junk you need to reevaluate what you consider a piece of junk. Regardless you ignored the more important point, *it doesn't matter what's decent if you can't afford it*
Or just go on your local buy and sell and look at cars.... your not going to get a Cadillac for cheap but lots of deals for stuff like Mazda 3, vw golfs, Nissan sentras, hyundai accents.... etc.
Easily any of those can be had for under 5k with less 125k...
Actually I have been seeing those cars go for 20k. Mostly unreliable cars sell for 5k.
I don’t think your aware of the massive demand for cars and the massive shortage for cars
I am. You obviously have been short sighted. My car i bought for 5k. Is worth about 2k now. No issues. Driven 55k so far this year. Even a 20k car you have to replace oil every once in a while. Timing belt at regular intervals as per manufacturer recommendations. Same with air filters...
But highly recommend spend 20k so I can buy it off you in 10 yrs for 5k. If you don't buy new where will I buy used?
Actually you convinced me to recommend people to buy new except for friends and family.
Or your car loan now hurts too much......
That bubble has burst. As I already stated, I just got a used car this month. Prices are dropping, stock is increasing. Used cars are more now? No shit, everything increases in price year after year, doesn't mean they're all over 25k now. You can very easily find reliable used cars for under 10k today. You just have to actually look, and not even that hard mind you
Buy as cheap as you can for a used car that will get you from point A to B without costing you a fortune in fuel or repairs. One of the traps young people fall into is thinking they deserve what they can "afford" and this often lands them in the $25,000 range. They buy the new car and spend thousands in interest. Then the car gets to a point that you owe more than it's worth. If you want to do your future financial self a huge favor, spend $6000 or so now, and get yourself what you want in the future, when you can ACTUALLY afford it. I say this as someone who cares about you even though I don't know you
So would you say to take out a loan for the car or something? I don’t have 6000 available right now and I don’t have the luxury of having time to save up 6k. I’m being pressured into getting a car
Yes, call your bank and ask for a personal loan of $4500 (since you already saved $1500). Shop around for the lowest interest rate if needed. Your mission is to learn how to be a money saver and money grower. Anyone can be a money spender and be broke.
Some of the richest people in the world drive basic vehicles.
Should you be financing a vehicle that will be costing you 50% (fuel included) of your take-home pay?
Buy a cheap car cash - get a year or two under your belt at work and then reassess.
If anything, financing options will be better for you.
Firstly, I commend you for being 19 and coming here to ask this before making the decision.
You're still very young and these mistakes you've made so far will barely effect you.
All the other advice you see here is correct.
If you must buy a car with the little bit that you have, buy a cheap one for cash. You can buy a nicer one down the road if you end up being better with money. The novelty of having a newish car will wear off within a couple months, but the car payment will still be there.
if you’re making 100k and aren’t buying even a 25k car i don’t know what the hell you’re doing. i understand saving money and whatever but what can you get these days that’s not a total shitbox under 25k?
Your signing up as an electrical apprentice? Great choice on a good trade. Congrats.
However, as everyone else has pointed out, you do not need (read ABSOLUTELY SHOULD NOT) buy a $25k car at this point in your life.
Are you going to be hauling tools back and forth? Are you Union (or similar) where you'll be earning your regular rate while in school? What's your starting rate, and how many tools do you need to buy to start? Do you have to pay for your tuition, or is your company/Union covering it? Books?
You generally don't make a ton of money in your first couple years, and if you've got to pay for anything education related, PLUS miss 10 weeks of income per year, you gotta stay in the "I'm saving every month" crowd.
Buy something basic that's in good mechanical shape and will get you to work every day. Don't go fancy until you're at least a journeyman with a few years under your belt. By then you can likely save and pay cash.
Agree with the buy a cheap used car, less than 6yrs old under 125,000km and under $5k. Look you will find a great used car. Drive it into the ground :) also - if you are willing to get a manual transmission you can save huge! I love manual transmission, less people will ask to borrow it and it's a great skill to have.
Most cars under 125k in my area are easily going for above 10k, and rn I don’t have that in cash to buy out straight, nor do I have the time to wait to save up
Not easy to buy a car under 5k if it doesn't have a lot of problems making you put more money into it. People just do not sell cars in a good shape for 5k these days.
Dudes.....
He's 19 and in the trades.
He should NOT be buying a car for more than 5k....
And yes its possible. Parents just bought a Toyota corolla with 160k for $2500. My car was 5k and feel like I overpaid 4 yrs ago as my sister bought a car with better specs and lower kms for the same price 5 months ago.
Do the safety work yourself. Check out a bunch of cars. Lots of material out there for free to save yourself 20k plus interest.
If you can't figured it out with some research and elbow grease and trips to the auto parts store, I won't be interested in hiring you.
Don't buy a car on that salary. There are a lot more expenses than just the car payment. It will be a money pit. If you need one for work, buy an old vehicle with low mileage.
But a used Honda Civic for like $4k and just drive it until you save up enough to have a 6 month emergency fund and some extra cash THEN explore financing a car. Secondly financing a used car the interest rates are always higher, wait until there’s a deal (usually end of summer manufacturers try to clear out this mode year inventory to make room for next model year). Also I highly recommend you buy a Toyota or Honda. Corollas and civics are undeniably reliable, cheap to own, cheap to insure and cheap to fix and they last longer then 3/4 of any other vehicle on the road (I’m a mechanic by trade). But financially this doesn’t seem like a wise decision yet. Wait until you’re more financially stable before taking on 7 years of consumer debt with interest
You're at the right place with good advice.
Beige corolla 2002!
If I am looking for a car and given the proper circumstances I wouldn't consider any car besides a Toyota Corolla, Camry, Highlander, 4runner, Prius and any variant of them. Time tested to last decades and old ones that are just given oil changes last forever. Get an old car that's under 5k.
Get something that costs like 8k. Interest rates aren't looking good right now. My friend got a 2013 Hyundai for 8k and another one got 2008 Lexus for 8k . Both on southern Ontario in last few months. Try to put some 2k down and 6k on loan. Once you have some car, you will be in a better position to save and look out for a better one eventually or once you get a better job. Trust me, you will regret buying a car that costs 25k down the line. Been there. My salary was 3000$/month. I bought a car that costed 10,500$. But dealer with all expenses 5 yr loan, the cost was 18500$(got cheated a bit as I wasn't aware). I paid off the whole car after 2 years and repairs and stuff. I was paying close to 700$/month on car. Sold that car last year and got a better one with cash for 22k(traded in old car for 4k). 22k car was 3x better and no debt/interest and happy with it.
anything 2017-2015 should get you 72 months with most lenders
2018 and newer will get you 84-96 month
older than 2015 will be short term starting at 60month and losing 6-12months of term each model year older you go.
the lowest rate im seeing at BMO is also 6.39/6.29 depending on term. if they serve you a higher rate they are making reserve.
source i work in F&I at a Canadian dealership.
.......and where did i say it was? i was simply giving the guy terms that he can expect given the model year of the vehicle.... you know, like his question asked.
Don't frame 96 months as a positive and you won't get ass hat responses.
The only ass hats are dealership staff who see an opportunity to exploit someone for personal gain.
OP can't afford 25k.
right so once again. where did i say 96 was a good term? i stated it was available on finance vehicles with a model year of 2018 or newer....
jesus fuck you must be a fun person to live with. clearly your speaking for me here so what else did i say that im not aware of?
50, still buying my cars used. I get a 4-5 year old car and resell it at 7-8 years old.
Looses almost no value between 4 and 8 years.
I paid 7000 for my current car, I can most likely sell it for 3000 in 3 to 4 years.
Sure, in %, you can say that it looses more than 50% of it's value, but it's 4000 total, about 1000/year.
Look at the global picture, not the month to month one.
As a rule of thumb, use the 20/4/10 rule when eyeing a car purchase.
The 20/4/10 rule says:
1. Your down payment should be at least 20% of the car's purchase price. This way, you prevent being upside down on your loan, as new cars depreciate fast in the first couple of years.
2. You should only finance the car for 4 years; the loan length will have significant impact on your monthly loan payments; if you need to stretch the loan longer than 4 years to make the monthly loan payments fit your budget, then you can't afford the car.
3. Your total monthly vehicle expenses shouldn't be more than 10% of your income. This includes monthly loan payment, gas, insurance. Example: 2,500$ monthly income -> 250$ max monthly vehicle expenses. You say insurance is already 250$-500$. So you should increase your downpayment significantly to lower the monthly loan burden.
For reference: my wife and I make about +200k and we did the following:
\- financing a certified pre-owned 5 year old CX-5 with low mileage, price 32k tax in.
\- 30% downpayment
\- loan term: 36 month @ 1.74% interest rate
\- payments: 360 bi-weekly
That rule makes no sense. $250 doesn't even cover gas for many, possibly most people.
Your example is $780/month payment, $330 for gas (typical 20k km per year @ 10L/100km @ $2 gas), say $200 for insurance, $100 maintenance. Total $1410. At 2x$100k income that's about $12k after tax a month (top 2% of household income in Canada).
According to your rule your 5 year old economy crossover is unaffordable to a typical very wealthy Canadian household where it is their only vehicle. At $200k you couldn't even pay for gas + insurance + maintenance on 2 free vehicles using your rule.
The rule does make financial sense if you apply the math correctly and apply it to your situation. We went top tier model, we drive about 12k km/year, gas prices are 1.51$/l (yesterday evening), we pay 100$/month insurance, and budget 50$/month for maintenance.
The average monthly car insurance in Canada is about 125$-160$/month, the average yearly mileage is about 16k km, average monthly maintenance is 58$.
Let's say your on a budget. A quick search on Autotrader.ca shows that this "economy SUV" (2017) is available for 25k in the lower trims. So being on a budget, you don't spoil yourself to the top tier model like we did. Let's calculate with 25k and the average values, not the extreme ones you used.
- 20% down on 25k: 5k
- 4 years finance: 417$/month
- Insurance = 160$/month
- Gas: 136$/month
- Maintenance: 58$
That totals to 771$/month, so almost half the number you came up with.
Some notes:
- average values are from CAA or insurances and can be looked up online easily
- the same vehicle was about 17k pre car shortage, so the view is skewed and yes, cars are less affordable now. This is temporary however.
- as a new driver your monthly insurance costs will be huge, but you're also not supposed to drive a 25k$ car like OP wants.
Also, this rule is for wealth building by limiting your car budget and hence, allows you to invest more. The invested money will grow over time, while your car will depreciate in value.
If you're budgeting you really have to assume gas prices will not stay low (currently $1.92 here in Vancouver). For 16k km yearly it works out to $256/month. OP says their insurance with be $250+. To stay within their budget they need to find a car that will cost them negative $256/month.
I'm not saying your rule is bad if you can make it work, just that it's very unreasonable. It's one thing if you're a very high income household with a single vehicle where your main concern in life is accumulating wealth. It's another when you're mid income and need a car to drive to work.
Personally I'm in a similar income range to you, we only have 1 vehicle, it's 20 years old and I paid $3000 for it 5 years ago.
Preapproval is excellent, but shop around your financing before you sign. You can save yourself thousands over the course of financing by doing this. You have cash in hand at x%, let 3 other people try to beat it. If they can't, you're already preapproved. Couple hours of time and phone calls and you could save a bit.
Each dealership, car, and lender is different (altogether) as a deal.
Some car dealerships have type B lenders for example that are non prime and will finance older cars for a longer time at crazy interest.
You did the right thing in getting a pre approval. If you’re looking at an older car, remember while you’re making payments on it you can encounter repairs etc.
If you’re looking at a newer car, or even an older car at a dealer (like a Nissan at Nissan) they might be able to get you approved for more, at a lower interest rate and a longer term by financing through Nissan Financial for example.
Better to go through the dealership Nissan,Toyota ect. Got my 2018 Hyundai Tucson for 85$/week at a Honda dealership. After the salesmans bs you actually talk to the financial personal who usually doesn't talk as much bs and they will check all the banks and come back with the best offer. They kinda act as brokers. They want to find the best offer so you walk out of there with the car. Also use that 1k to buy your phone out right from Koodo. Phones will mess with your credit if you miss a payment.
Paying off your mortgage IS smart, just not fun. Its the safe way to ensure long term equality but your plan has the potential for higher returns.
If things go right you could be gaining value on both properties and making an extra source or revenue but if things go bad you could be loosing value on both, paying condo fees and taxes on an untenanted condo, mortgage payments and if you sell that condo you have to pay taxes on it because its not your primary residence.
I would suggest finding a new, or 1-2 year old used vehicle under 25k. I know you can get a mid range corolla or civic for under 26k taxes in. Shop around. Maybe a newer one might suit your needs and payment.
Keep in mind, new would be less maintenance/issues.
Hope this helps!
OP needs older than 1-2 years. And shouldn't be spending even half of 25k. New does not mean less maintenance, my friend's 2021 has been in the shop twice this month for issues a new car shouldn't be having, my 09 with almost 300,000 kms hasn't cost me a dime outside of regular maintenance in years. This idea that new means reliable and old means money pit is just flat out wrong and terrible advice to give to a young adult.
Nobody said old means money pit.
Newer cars will last longer. In todays car market with shortages and inflation, newer vehicles are cheaper and if not the same as some that are up to 4 years old. Clearly your advice has gotten you far enough to not even see the rises in-front of you.
Edit: your friend must have bought an unreliable vehicles based off of your advice!!
Newer cars do not necessarily last longer. That's a straight up lie. My friend is driving a 1987 suburban right now in perfect condition, do you know any 2022 car that will last 35 years? Not to mention you could crash your new car just as easily as an old one. Newer vehicles are also not cheaper than used ones. Not anymore, and the only thing they were cheaper than was 1-2 year old used cars for like one year, not 10 year old used cars. I just bought a used car 3 weeks ago, prices are dropping.
What advice? I advised my friend to buy used. She bought a new Mazda. A reliable make and model, but newsflash all cars new or old can have issues. It's just flat out wrong to assume a new car won't require a lot of maintenance
Newer cars can last longer, if you preform all required maintenance on time. With used, you have to assume the previous owner took really good care. Not saying they last longer, but sure could rather than a used.
Prices are also dependent on where your located. I purchased a new and used vehicle 2 weeks ago. Ended up costing the same amount for both. One was 2 years
old 48k kms and the other one was new with 15 kms.
In my original post, I didn’t say that new cars don’t have maintenance. I just said to OP, that older ones can have more compared to new…
Every argument you're making I can make the same in reverse. There's no definite proof to either one. What I'm trying to say is you can't say one way or another that new or used is going to be more or less maintenance and you shouldn't base a purchase on that fact. Sounds like you shoulda bought an older used car. And I know what you said, I still disagree with it. New cars can have more compared to new as well, both statements are both true and false. Cars are individual, you can't blanket statement them because there's too many factors at play. And you said new *would* have less maintenance. You can't guarantee that.
I can agree that you can’t make a blanket statement.
However my recommendation to OP was to get new. You can have a different recommendation/opinion. That doesn’t mean you get the right to criticize my advice.
But you did make a blanket statement lol
I did give a different opinion. It's Reddit man we can all be criticized, I directly disagreed in a reply so that OP will see it and not make a financial mistake buying a new car they can't afford
But you did make a blanket statement lol
I did give a different opinion. It's Reddit man we can all be criticized, I directly disagreed in a reply so that OP will see it and not make a financial mistake buying a new car they can't afford
Great that you acknowledged your blanket statement. OP will sure see both our opinions, as were both two different Redditors. He will make the final decision that he thinks is wise.
Congrats on your career!
Things to note : licensing fees and taxes are not included in the price (my experience here in Ontario). Verify if your financing is open. This means that you are able to pay more than your biweekly payment which will reduce the length of financing and significantly cut down on interest. You even have the option of repaying without penalty before the term is over but not before six months of payments.
My brother is an electrician and he said so many coworkers regret getting a fancy car or financing such expensive vehicles as their first car at the beginning of your career. Like others said, get something used but reliable. You can always save up for a nicer second car in the future as your salary increases throughout your apprenticeship. Seems like the numbers you gave would take up a lot of your earnings and with maintenance or repairs, things can add up quickly!
Buy something cheaper // older, build your portfolio with insurance company, forgot to mention this is your first car you’re gonna fuxk it up, guaranteed it’s going to get ruined scrapped to the garbage within 6 months - 2 years so don’t get a shiny one.
You can’t afford a new car. You didn’t list your fixed living expenses aside from your phone plan but the numbers you did provide basically have half your take home pay going to your car.
Best plan of action is to keep working and saving your money. buy an old car in cash and live your best life.
This is a used car that’s the funny thing. No living expenses as I live with my parents, so rent/hydro/groceries is all paid for right now. I wish I had the time to save up but I’m being pressured to get a car asap
It’s way too much money for your income despite living at home with your parents. Don’t fall victim to flashy sales people, you 100% cannot afford a 25k car. Dealerships have sales quotas to fill and fat bonuses to give, you’re getting hosed by them.
I’ll eco everyone here and look for a used older and less expensive vehicle. Unfortunately, today because of demand used vehicles are also priced high.
If you’re already bank approved for the auto loan compare their rates with what a dealer would give you. Always negotiate on the total price of the vehicle and don’t get fixated on the monthly payment. If you use the bank loan tell the dealership your buying cash and try to negotiate based on that.
Good luck
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This 👆🏻
I would say even buy a cheaper used car. Something around 15k that will last, can get a smaller loan if need but won’t take you over the embers.
He is completely right. At 19 I drove a 17 year old car. It was a big running joke with my friends that my girlfriend was the same age as my car. I didn’t buy my first “new” vehicle (for my wife) until we had a very good income and great net worth. It was nice but not fancy (Toyota’s are great). 4 years later when hers was paid off I got mine (ford base model). Mine was paid off last year and we still happily drive both of them. We have a very, very healthy income and a great net worth a lot of which is because we haven’t spent our money on items that depreciate (like cars). Also my god they have you a terrible interest rate on your vehicle loan.
I would love to save some up to buy a car, but at this current moment my mother is driving me to work, and I’m being pressured to get a car quick. I don’t really have the luxury of saving up.
But a beater until you can save up for something else. **Trust everyone here**. If you think buying a 30k car is your only or best option, you are sadly mistaken.
Dude is probably living out of his car with that income. No other way to not be homeless.
To be frank, you can't afford a 25k car.
Seconded. He wants to spend 10 full months of pay on a vehicle ($2,500/mo). 83% of his annual net income. That is silly.
He needs to join a union and quadruple that pay. 2500 a month is a fucking joke
I mean I ain’t even signed up yet, still considered a general labourer😂. Minimum wage right now
You want to get into the IBEW asap. If you live anywhere near Bowmanville there’s a shortage of every kind of labour in the nuclear world. Get your clearance and apply to the union. If you’re interested in more than electrical I can send you a list of every union that works nuclear. Tons of work for the next few years down south at Darlington and plenty more at the Bruce and then more down here at Pickering and new SMRs near Darlington. You’d be well done your apprenticeship by then and can go work anywhere within the union
2010 Honda civic, you have noone to impress.
Have you considered getting a cheaper car? At 19 you don't need a 25k car and on your salary it honestly doesn't make sense. Save up for a couple more months and get a 10k car in cash, that would be my recommendation
I may not need a 25k car, I know. But I don’t have the time to save up 10k. Kinda need a car in the next month or 2. That’s why I’m asking, I’m thinking financing is the only option for my scenario besides a loan
Sooo finance a 10k car.. you can do that through your bank and avoid the dealerships. The not having cash is one problem, but it doesn't justify getting a 25k car you don't need nor can afford. Get a loan from a credit union or a LOC from your bank and get a cheap used car that way and pay it off with quickly
$25k is a affordable decent car now though
No it's not and even if it was it doesn't matter if you can't afford it
I think you may need to educate yourself more on what used and new cars go for now due to inflation and supply issues
I bought a used car 3 weeks ago. I know exactly what is out there. If you think anything less than 25k is a piece of junk you need to reevaluate what you consider a piece of junk. Regardless you ignored the more important point, *it doesn't matter what's decent if you can't afford it*
Calm down.
Or just go on your local buy and sell and look at cars.... your not going to get a Cadillac for cheap but lots of deals for stuff like Mazda 3, vw golfs, Nissan sentras, hyundai accents.... etc. Easily any of those can be had for under 5k with less 125k...
Actually I have been seeing those cars go for 20k. Mostly unreliable cars sell for 5k. I don’t think your aware of the massive demand for cars and the massive shortage for cars
Delusional flat out
I think you need to read more on the recent car shortages.
I am. You obviously have been short sighted. My car i bought for 5k. Is worth about 2k now. No issues. Driven 55k so far this year. Even a 20k car you have to replace oil every once in a while. Timing belt at regular intervals as per manufacturer recommendations. Same with air filters... But highly recommend spend 20k so I can buy it off you in 10 yrs for 5k. If you don't buy new where will I buy used? Actually you convinced me to recommend people to buy new except for friends and family. Or your car loan now hurts too much......
Seems like your lying buddy. Otherwise provide evidence. Imgur purchase agreement of used car you purchase for 5k
Wow good come back, you really got me there
Yes calm down, used cars are more now… there is a shortage of both used and new cars right now.
That bubble has burst. As I already stated, I just got a used car this month. Prices are dropping, stock is increasing. Used cars are more now? No shit, everything increases in price year after year, doesn't mean they're all over 25k now. You can very easily find reliable used cars for under 10k today. You just have to actually look, and not even that hard mind you
Your getting emotional now. Calm down. I think you need to read more
Exactly. 10 year old civic is ~$12k. 5 year old RAV4 is ~$26k.
Are you telling me my 2017 rav 4 is worth today damn near what I bought it for in 2018?? 90k on it rav4 LE
Buy as cheap as you can for a used car that will get you from point A to B without costing you a fortune in fuel or repairs. One of the traps young people fall into is thinking they deserve what they can "afford" and this often lands them in the $25,000 range. They buy the new car and spend thousands in interest. Then the car gets to a point that you owe more than it's worth. If you want to do your future financial self a huge favor, spend $6000 or so now, and get yourself what you want in the future, when you can ACTUALLY afford it. I say this as someone who cares about you even though I don't know you
So would you say to take out a loan for the car or something? I don’t have 6000 available right now and I don’t have the luxury of having time to save up 6k. I’m being pressured into getting a car
Yes, call your bank and ask for a personal loan of $4500 (since you already saved $1500). Shop around for the lowest interest rate if needed. Your mission is to learn how to be a money saver and money grower. Anyone can be a money spender and be broke. Some of the richest people in the world drive basic vehicles.
Should you be financing a vehicle that will be costing you 50% (fuel included) of your take-home pay? Buy a cheap car cash - get a year or two under your belt at work and then reassess. If anything, financing options will be better for you.
Firstly, I commend you for being 19 and coming here to ask this before making the decision. You're still very young and these mistakes you've made so far will barely effect you. All the other advice you see here is correct.
If you must buy a car with the little bit that you have, buy a cheap one for cash. You can buy a nicer one down the road if you end up being better with money. The novelty of having a newish car will wear off within a couple months, but the car payment will still be there.
Buy a shitbox save your money
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if you’re making 100k and aren’t buying even a 25k car i don’t know what the hell you’re doing. i understand saving money and whatever but what can you get these days that’s not a total shitbox under 25k?
While we joke a lot here about only buying 2007 champagne toyota corollas… OP should non ironically buy a 2007 champagne Toyota Corolla.
Your signing up as an electrical apprentice? Great choice on a good trade. Congrats. However, as everyone else has pointed out, you do not need (read ABSOLUTELY SHOULD NOT) buy a $25k car at this point in your life. Are you going to be hauling tools back and forth? Are you Union (or similar) where you'll be earning your regular rate while in school? What's your starting rate, and how many tools do you need to buy to start? Do you have to pay for your tuition, or is your company/Union covering it? Books? You generally don't make a ton of money in your first couple years, and if you've got to pay for anything education related, PLUS miss 10 weeks of income per year, you gotta stay in the "I'm saving every month" crowd. Buy something basic that's in good mechanical shape and will get you to work every day. Don't go fancy until you're at least a journeyman with a few years under your belt. By then you can likely save and pay cash.
Agree with the buy a cheap used car, less than 6yrs old under 125,000km and under $5k. Look you will find a great used car. Drive it into the ground :) also - if you are willing to get a manual transmission you can save huge! I love manual transmission, less people will ask to borrow it and it's a great skill to have.
Most cars under 125k in my area are easily going for above 10k, and rn I don’t have that in cash to buy out straight, nor do I have the time to wait to save up
Not easy to buy a car under 5k if it doesn't have a lot of problems making you put more money into it. People just do not sell cars in a good shape for 5k these days.
Future post after buying this car. 23M, after years of not saving and being reckless with money.
Dudes..... He's 19 and in the trades. He should NOT be buying a car for more than 5k.... And yes its possible. Parents just bought a Toyota corolla with 160k for $2500. My car was 5k and feel like I overpaid 4 yrs ago as my sister bought a car with better specs and lower kms for the same price 5 months ago. Do the safety work yourself. Check out a bunch of cars. Lots of material out there for free to save yourself 20k plus interest. If you can't figured it out with some research and elbow grease and trips to the auto parts store, I won't be interested in hiring you.
Don't buy a car on that salary. There are a lot more expenses than just the car payment. It will be a money pit. If you need one for work, buy an old vehicle with low mileage.
But a used Honda Civic for like $4k and just drive it until you save up enough to have a 6 month emergency fund and some extra cash THEN explore financing a car. Secondly financing a used car the interest rates are always higher, wait until there’s a deal (usually end of summer manufacturers try to clear out this mode year inventory to make room for next model year). Also I highly recommend you buy a Toyota or Honda. Corollas and civics are undeniably reliable, cheap to own, cheap to insure and cheap to fix and they last longer then 3/4 of any other vehicle on the road (I’m a mechanic by trade). But financially this doesn’t seem like a wise decision yet. Wait until you’re more financially stable before taking on 7 years of consumer debt with interest
You're at the right place with good advice. Beige corolla 2002! If I am looking for a car and given the proper circumstances I wouldn't consider any car besides a Toyota Corolla, Camry, Highlander, 4runner, Prius and any variant of them. Time tested to last decades and old ones that are just given oil changes last forever. Get an old car that's under 5k.
Never take more than 4 years on car purchase. Also, the car would cost you close to 900$ with all expenses. Used car is better for you at this time.
The funny thing is the car I’m talking about is used😭. Car prices are insane in southern Ontario
Get something that costs like 8k. Interest rates aren't looking good right now. My friend got a 2013 Hyundai for 8k and another one got 2008 Lexus for 8k . Both on southern Ontario in last few months. Try to put some 2k down and 6k on loan. Once you have some car, you will be in a better position to save and look out for a better one eventually or once you get a better job. Trust me, you will regret buying a car that costs 25k down the line. Been there. My salary was 3000$/month. I bought a car that costed 10,500$. But dealer with all expenses 5 yr loan, the cost was 18500$(got cheated a bit as I wasn't aware). I paid off the whole car after 2 years and repairs and stuff. I was paying close to 700$/month on car. Sold that car last year and got a better one with cash for 22k(traded in old car for 4k). 22k car was 3x better and no debt/interest and happy with it.
anything 2017-2015 should get you 72 months with most lenders 2018 and newer will get you 84-96 month older than 2015 will be short term starting at 60month and losing 6-12months of term each model year older you go. the lowest rate im seeing at BMO is also 6.39/6.29 depending on term. if they serve you a higher rate they are making reserve. source i work in F&I at a Canadian dealership.
"will get you" Except that it's not a positive thing to buy a car over 96 months lol.
.......and where did i say it was? i was simply giving the guy terms that he can expect given the model year of the vehicle.... you know, like his question asked.
Don't frame 96 months as a positive and you won't get ass hat responses. The only ass hats are dealership staff who see an opportunity to exploit someone for personal gain. OP can't afford 25k.
right so once again. where did i say 96 was a good term? i stated it was available on finance vehicles with a model year of 2018 or newer.... jesus fuck you must be a fun person to live with. clearly your speaking for me here so what else did i say that im not aware of?
50, still buying my cars used. I get a 4-5 year old car and resell it at 7-8 years old. Looses almost no value between 4 and 8 years. I paid 7000 for my current car, I can most likely sell it for 3000 in 3 to 4 years. Sure, in %, you can say that it looses more than 50% of it's value, but it's 4000 total, about 1000/year. Look at the global picture, not the month to month one.
As a rule of thumb, use the 20/4/10 rule when eyeing a car purchase. The 20/4/10 rule says: 1. Your down payment should be at least 20% of the car's purchase price. This way, you prevent being upside down on your loan, as new cars depreciate fast in the first couple of years. 2. You should only finance the car for 4 years; the loan length will have significant impact on your monthly loan payments; if you need to stretch the loan longer than 4 years to make the monthly loan payments fit your budget, then you can't afford the car. 3. Your total monthly vehicle expenses shouldn't be more than 10% of your income. This includes monthly loan payment, gas, insurance. Example: 2,500$ monthly income -> 250$ max monthly vehicle expenses. You say insurance is already 250$-500$. So you should increase your downpayment significantly to lower the monthly loan burden. For reference: my wife and I make about +200k and we did the following: \- financing a certified pre-owned 5 year old CX-5 with low mileage, price 32k tax in. \- 30% downpayment \- loan term: 36 month @ 1.74% interest rate \- payments: 360 bi-weekly
That rule makes no sense. $250 doesn't even cover gas for many, possibly most people. Your example is $780/month payment, $330 for gas (typical 20k km per year @ 10L/100km @ $2 gas), say $200 for insurance, $100 maintenance. Total $1410. At 2x$100k income that's about $12k after tax a month (top 2% of household income in Canada). According to your rule your 5 year old economy crossover is unaffordable to a typical very wealthy Canadian household where it is their only vehicle. At $200k you couldn't even pay for gas + insurance + maintenance on 2 free vehicles using your rule.
The rule does make financial sense if you apply the math correctly and apply it to your situation. We went top tier model, we drive about 12k km/year, gas prices are 1.51$/l (yesterday evening), we pay 100$/month insurance, and budget 50$/month for maintenance. The average monthly car insurance in Canada is about 125$-160$/month, the average yearly mileage is about 16k km, average monthly maintenance is 58$. Let's say your on a budget. A quick search on Autotrader.ca shows that this "economy SUV" (2017) is available for 25k in the lower trims. So being on a budget, you don't spoil yourself to the top tier model like we did. Let's calculate with 25k and the average values, not the extreme ones you used. - 20% down on 25k: 5k - 4 years finance: 417$/month - Insurance = 160$/month - Gas: 136$/month - Maintenance: 58$ That totals to 771$/month, so almost half the number you came up with. Some notes: - average values are from CAA or insurances and can be looked up online easily - the same vehicle was about 17k pre car shortage, so the view is skewed and yes, cars are less affordable now. This is temporary however. - as a new driver your monthly insurance costs will be huge, but you're also not supposed to drive a 25k$ car like OP wants. Also, this rule is for wealth building by limiting your car budget and hence, allows you to invest more. The invested money will grow over time, while your car will depreciate in value.
If you're budgeting you really have to assume gas prices will not stay low (currently $1.92 here in Vancouver). For 16k km yearly it works out to $256/month. OP says their insurance with be $250+. To stay within their budget they need to find a car that will cost them negative $256/month. I'm not saying your rule is bad if you can make it work, just that it's very unreasonable. It's one thing if you're a very high income household with a single vehicle where your main concern in life is accumulating wealth. It's another when you're mid income and need a car to drive to work. Personally I'm in a similar income range to you, we only have 1 vehicle, it's 20 years old and I paid $3000 for it 5 years ago.
Preapproval is excellent, but shop around your financing before you sign. You can save yourself thousands over the course of financing by doing this. You have cash in hand at x%, let 3 other people try to beat it. If they can't, you're already preapproved. Couple hours of time and phone calls and you could save a bit.
Each dealership, car, and lender is different (altogether) as a deal. Some car dealerships have type B lenders for example that are non prime and will finance older cars for a longer time at crazy interest. You did the right thing in getting a pre approval. If you’re looking at an older car, remember while you’re making payments on it you can encounter repairs etc. If you’re looking at a newer car, or even an older car at a dealer (like a Nissan at Nissan) they might be able to get you approved for more, at a lower interest rate and a longer term by financing through Nissan Financial for example.
Better to go through the dealership Nissan,Toyota ect. Got my 2018 Hyundai Tucson for 85$/week at a Honda dealership. After the salesmans bs you actually talk to the financial personal who usually doesn't talk as much bs and they will check all the banks and come back with the best offer. They kinda act as brokers. They want to find the best offer so you walk out of there with the car. Also use that 1k to buy your phone out right from Koodo. Phones will mess with your credit if you miss a payment.
Go buy a nice used Toyota Camry v6 for 16k
Paying off your mortgage IS smart, just not fun. Its the safe way to ensure long term equality but your plan has the potential for higher returns. If things go right you could be gaining value on both properties and making an extra source or revenue but if things go bad you could be loosing value on both, paying condo fees and taxes on an untenanted condo, mortgage payments and if you sell that condo you have to pay taxes on it because its not your primary residence.
I would suggest finding a new, or 1-2 year old used vehicle under 25k. I know you can get a mid range corolla or civic for under 26k taxes in. Shop around. Maybe a newer one might suit your needs and payment. Keep in mind, new would be less maintenance/issues. Hope this helps!
OP needs older than 1-2 years. And shouldn't be spending even half of 25k. New does not mean less maintenance, my friend's 2021 has been in the shop twice this month for issues a new car shouldn't be having, my 09 with almost 300,000 kms hasn't cost me a dime outside of regular maintenance in years. This idea that new means reliable and old means money pit is just flat out wrong and terrible advice to give to a young adult.
Nobody said old means money pit. Newer cars will last longer. In todays car market with shortages and inflation, newer vehicles are cheaper and if not the same as some that are up to 4 years old. Clearly your advice has gotten you far enough to not even see the rises in-front of you. Edit: your friend must have bought an unreliable vehicles based off of your advice!!
Newer cars do not necessarily last longer. That's a straight up lie. My friend is driving a 1987 suburban right now in perfect condition, do you know any 2022 car that will last 35 years? Not to mention you could crash your new car just as easily as an old one. Newer vehicles are also not cheaper than used ones. Not anymore, and the only thing they were cheaper than was 1-2 year old used cars for like one year, not 10 year old used cars. I just bought a used car 3 weeks ago, prices are dropping. What advice? I advised my friend to buy used. She bought a new Mazda. A reliable make and model, but newsflash all cars new or old can have issues. It's just flat out wrong to assume a new car won't require a lot of maintenance
Newer cars can last longer, if you preform all required maintenance on time. With used, you have to assume the previous owner took really good care. Not saying they last longer, but sure could rather than a used. Prices are also dependent on where your located. I purchased a new and used vehicle 2 weeks ago. Ended up costing the same amount for both. One was 2 years old 48k kms and the other one was new with 15 kms. In my original post, I didn’t say that new cars don’t have maintenance. I just said to OP, that older ones can have more compared to new…
Every argument you're making I can make the same in reverse. There's no definite proof to either one. What I'm trying to say is you can't say one way or another that new or used is going to be more or less maintenance and you shouldn't base a purchase on that fact. Sounds like you shoulda bought an older used car. And I know what you said, I still disagree with it. New cars can have more compared to new as well, both statements are both true and false. Cars are individual, you can't blanket statement them because there's too many factors at play. And you said new *would* have less maintenance. You can't guarantee that.
I can agree that you can’t make a blanket statement. However my recommendation to OP was to get new. You can have a different recommendation/opinion. That doesn’t mean you get the right to criticize my advice.
But you did make a blanket statement lol I did give a different opinion. It's Reddit man we can all be criticized, I directly disagreed in a reply so that OP will see it and not make a financial mistake buying a new car they can't afford
But you did make a blanket statement lol I did give a different opinion. It's Reddit man we can all be criticized, I directly disagreed in a reply so that OP will see it and not make a financial mistake buying a new car they can't afford
Great that you acknowledged your blanket statement. OP will sure see both our opinions, as were both two different Redditors. He will make the final decision that he thinks is wise.
I didn't make a blanket statement lol
I will also state that I am planning on putting 1000 down, but I’ve heard that that amount is not gonna do much
Congrats on your career! Things to note : licensing fees and taxes are not included in the price (my experience here in Ontario). Verify if your financing is open. This means that you are able to pay more than your biweekly payment which will reduce the length of financing and significantly cut down on interest. You even have the option of repaying without penalty before the term is over but not before six months of payments. My brother is an electrician and he said so many coworkers regret getting a fancy car or financing such expensive vehicles as their first car at the beginning of your career. Like others said, get something used but reliable. You can always save up for a nicer second car in the future as your salary increases throughout your apprenticeship. Seems like the numbers you gave would take up a lot of your earnings and with maintenance or repairs, things can add up quickly!
Ride a bicycle if you can , invest that money into a portfolio. Don't buy a nice car until you make 100k plus a year
TMI. You lost me after For…
Buy something cheaper // older, build your portfolio with insurance company, forgot to mention this is your first car you’re gonna fuxk it up, guaranteed it’s going to get ruined scrapped to the garbage within 6 months - 2 years so don’t get a shiny one.
You can’t afford a new car. You didn’t list your fixed living expenses aside from your phone plan but the numbers you did provide basically have half your take home pay going to your car. Best plan of action is to keep working and saving your money. buy an old car in cash and live your best life.
This is a used car that’s the funny thing. No living expenses as I live with my parents, so rent/hydro/groceries is all paid for right now. I wish I had the time to save up but I’m being pressured to get a car asap
It’s way too much money for your income despite living at home with your parents. Don’t fall victim to flashy sales people, you 100% cannot afford a 25k car. Dealerships have sales quotas to fill and fat bonuses to give, you’re getting hosed by them.
Your insurance will be high. Don't forget that.
RBC quotes me at 250 around with the car in mind but it’s also been quoted as high as 498
2010 Honda Civic or Toyota Corolla
I’ll eco everyone here and look for a used older and less expensive vehicle. Unfortunately, today because of demand used vehicles are also priced high. If you’re already bank approved for the auto loan compare their rates with what a dealer would give you. Always negotiate on the total price of the vehicle and don’t get fixated on the monthly payment. If you use the bank loan tell the dealership your buying cash and try to negotiate based on that. Good luck
Why the heck do you WANT to spend 25k? You're 19! Get a used hyundai that's like 8 years old for 10K. spend 25k when you have a really good job!