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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: LuxuryIsADrug on September 09, 2016, 06:03:30 PM

Title: Buying a new (used) car [CANADIAN]
Post by: LuxuryIsADrug on September 09, 2016, 06:03:30 PM
So I'm trying to change my spending habits and one of my major items is reducing transportation costs.

You can see my current situation in my journal:

http://forum.mrmoneymustache.com/journals/from-luxury-addict-to-frugal-warrior

I know the 10%-of-gross rule is tossed around buying a vehicle and I'm having trouble coming to terms with the vehicles I can find at these prices.
I just don't trust proper maintenance has been done on these cars and I'm going to end up with a major repair shortly after purchasing.

My average monthly income is $5,000 CAD. All of my savings are in RRSPs so I'd have to take a loan.
I work out of the city and have a round trip commute once a week that is around 220 km.

The two used cars I've considering so far are:

2010 Honda Fit Sport


2015 Nissan Versa Note SV

These cars would replace my 2016 Subaru WRX which I'm currently leasing for $580 CAD/mth. I'd also be saving around $100/mth on gas and $10/mth on insurance.

I prefer the looks of the Honda Fit but I'm really leaning towards the 2015 Nissan Versa Note because it still has warranty.

Should I really be looking for cheaper cars or are these acceptable to pursue?
The Honda Fit is the cheapest in the area that has under 100,000 km.
2011 Nissan Versa Notes are $1200 cheaper than this 2015.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: MBot on September 10, 2016, 09:04:39 AM
If you're saving $690 a month on a car payment, gas and insurance, why are you worried about a "major repair"? I'd be more worried about the depreciation in value a newer car will have. That's a guaranteed 100% certain loss of money.

Why not buy a $5000 car a few years older... and bank the $9k difference for any repairs?

Seriously - don't get a car that's been in ANY kind of accident. Even a small one can throw off alignment and cause cascading damage. If you're worried about repairs.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: LuxuryIsADrug on September 10, 2016, 12:49:52 PM
If you're saving $690 a month on a car payment, gas and insurance, why are you worried about a "major repair"? I'd be more worried about the depreciation in value a newer car will have. That's a guaranteed 100% certain loss of money.

Why not buy a $5000 car a few years older... and bank the $9k difference for any repairs?

Seriously - don't get a car that's been in ANY kind of accident. Even a small one can throw off alignment and cause cascading damage. If you're worried about repairs.


This is going to be difficult. There are currently zero Honda Fits and Nissan Versas at that price in my entire province.

The majority of cars at that price range are from the 60s, 70s and 80s.
However, there is a 2004 Honda Civic DX for $4800 that may be worth looking into.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: MBot on September 10, 2016, 05:43:34 PM
Where are you in Canada? My prices are Ontario-centric, but there's hundreds of Civics in the 2006-2008 range for about $5k. Even 6-7k for a 2010 is better than spending 15,000!

I like a 10-year window for used cars. Something around that is usually decent value and reliability. A Toyota Corolla or Honda Civic in that range should suit you well.

You can also check out Consumer Reports' Used Cars issue from your library and check out any used car you are considering.

Then again, almost anything is better than your current car situation, even if you spend a bit more than 5k to get what you are comfortable with.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: LuxuryIsADrug on September 12, 2016, 10:48:48 AM
Where are you in Canada? My prices are Ontario-centric, but there's hundreds of Civics in the 2006-2008 range for about $5k. Even 6-7k for a 2010 is better than spending 15,000!

I like a 10-year window for used cars. Something around that is usually decent value and reliability. A Toyota Corolla or Honda Civic in that range should suit you well.

You can also check out Consumer Reports' Used Cars issue from your library and check out any used car you are considering.

Then again, almost anything is better than your current car situation, even if you spend a bit more than 5k to get what you are comfortable with.

Manitoba.

I'll take a look at the Consumer Reports' Used Car issue. A hatchback would be ideal for camping/hiking/biking.

Looks like some private sales have popped up today that look promising.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: MBot on September 12, 2016, 12:45:49 PM
Sure. Hatchbacks are awesome! But if they're in short supply, remember for every $35 a month you save on a car payment, that's enough to pay for a day of renting a hatchback! (Most locations in Canada anyway!) Unless you super-regularly do these things - like multiple times a week - it's often better to just rent a bigger vehicle a few times a month. Especially with nasty winters. 

Hatchbacks are nice but the Fit also isn't as nice a car as the Civic - smaller steering wheel, engine, etc. I much prefer the Civic engine over when I had a Fit in a Canadian winter.  Then again, Manitoba is a lot less hilly than Ontario.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: GuitarStv on September 12, 2016, 12:53:38 PM
I'd be more worried about the depreciation in value a newer car will have. That's a guaranteed 100% certain loss of money.

Meh.

I'm not convinced that this is true in the long run if you plan to keep the car.  We bought our Toyota Corolla brand new in 2005, we're hoping to put off shopping for another car until at least 2025.  I think that when you factor in the additional hassle and costs of repairs on an older car that you probably break even over a 15 - 20 year life of a car vs buying two or three well used cars over that period of time.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: MrsTuxedocat on September 12, 2016, 02:33:13 PM
I think both cars would be a great choices. I was considering a versa but ultimately chose the Honda Fit. It's reliable, cute, great on gas, and can fit a lot of cargo.
Title: Re: Buying a new (used) car [CANADIAN]
Post by: daverobev on September 12, 2016, 04:22:26 PM
DON'T buy (without LOTS of research) an early-model 2006 Civic; they had head issues, and I think it wasn't fixed til 2009.

MB prices may be higher than ON. I would look at Hyundai. We bought, new, an Elantra for less than the cars you are talking about used - note, no a/c, no cruise, and manual trans. It is what it is. We were looking at Civics but they were barely cheaper, with 80,000 km on. Though they DID have a/c.

Try a three year old Accent. They are *dirt* cheap.