30% of Canadian automotive trade in's are over $7000 in the hole

Canadian Poncho · A Poncho Legend!

30% of Canadian automotive trade in's are over $7000 in the hole

timbuk · Canadian Poncho Superstar!

THAT is a very very good article itsa gong show out there and they are talking relatively cheap cars for examples

hawkeye5766 · Canadian Poncho Superstar!

Scary indeed! Also the RV market! They will let you finance a recreational purchase over 20 years!!! So if you bought a camper or travel trailer in 2016 it wont be paid off until 2036!!! Crazy! Do they do the 20 year plan in other provinces?

seventy2plus2 · Canadian Poncho Superstar!

I presume Mommy & Daddy have to come to the rescue.

hawkeye5766 · Canadian Poncho Superstar!

seventy2plus2 wrote:
I presume Mommy & Daddy have to come to the rescue.

I'm thinking some of that 30% is Mommy and Daddy?

4SPEED427 · A Poncho Legend!

Canadian Poncho wrote:

Scary stuff. It's all going to burst soon...
https://driving.ca/column/lorraine/lorraine-complains-canadians-need-to-smarten-up-when-buying-new-cars?fbclid=IwAR3OmOAlAEkW_eG1trwF37_W18loL2rHb8XylXmT06SpTI8H13dSqmRoTB8#

In May 1998 GM had a deal for dealership employees to lease a new GM. I always said I would never lease, but it was a great deal, I couldn't refuse. It was easy to see why the monthly was so cheap when I saw the buyout at the end of my 2 year lease. Full list on my truck was a bit over $27,000. The buyout for me was just over $21,000 after 2 years! NOT.....!

I told GM they could have my truck back and of course they didn't want it because they were getting bombarded with 2 year old pickups coming back, none of the employees were buying their trucks. My boss negotiated with them and finally bought the truck for a bit over $15,000! I would have bought it for that but part of the contract when he bought it from GM was that I was not allowed to buy it from him.

That dealer employee lease program didn't last long...

Pontiacanada · A Poncho Legend!

Carl Stevenson wrote:
Canadian Poncho wrote:

Scary stuff. It's all going to burst soon...
https://driving.ca/column/lorraine/lorraine-complains-canadians-need-to-smarten-up-when-buying-new-cars?fbclid=IwAR3OmOAlAEkW_eG1trwF37_W18loL2rHb8XylXmT06SpTI8H13dSqmRoTB8#

In May 1998 GM had a deal for dealership employees to lease a new GM. I always said I would never lease, but it was a great deal, I couldn't refuse. It was easy to see why the monthly was so cheap when I saw the buyout at the end of my 2 year lease. Full list on my truck was a bit over $27,000. The buyout for me was just over $21,000 after 2 years! NOT.....!

I told GM they could have my truck back and of course they didn't want it because they were getting bombarded with 2 year old pickups coming back, none of the employees were buying their trucks. My boss negotiated with them and finally bought the truck for a bit over $15,000! I would have bought it for that but part of the contract when he bought it from GM was that I was not allowed to buy it from him.

That dealer employee lease program didn't last long...

... and you must return it in clean, scratch/dent free shape or pay $$$ lease penalties.

Canadian Poncho · A Poncho Legend!

Believe me-it's Mommy and Daddy who are getting into this mess. At my last Service Advisor job I was also tasked with getting new and used vehicles ready for delivery. I'd see the deals and I would be in shock. A couple with a son about 8 years old trading in their 6 year old car that still had 12 grand owing on it (it was worth about $1500 on trade- motor was knocking, trans was going). They piled that 12 grand onto a loan for a new Dodge Ram and financed for 84 months. Of course they had to have chrome running boards, a tonneau cover etc. I saw deals like this constantly. With our salt vehicles are usually getting pretty rough at year 5.

63gpman · Addicted!

It is not just in Canada. My neighbor down the street got into an accident with his 2010 Yukon with 175,000 miles on it. I figured it was going to be about $5000 in damage. he asked me if they would total it or what they would do. I told him that he should just not fix it and zip tie it back together and hammer out some dents and throw a headlight in it. He told me he stilled owed 21 on it. I told him to pay off the loan and just drive the truck. He said not $2100, $21,000 and he had owned it for 3 years!!!! It shocked me because he appears to have his stuff together, he and his wife have good paying jobs. Shocked the crap out of me!

4SPEED427 · A Poncho Legend!

$21,000 on a 9 year old Yukon? Uh-oh......

73SC · A Poncho Legend!

I get to hear a lot of Financial horror stories in my job as head of HR for my company. Here's one I hear all the time when I ask folks why they didn't buy a less expensive used car over a costly brand new car:

"You have to have money to buy a used car, you don't have to have anything to get a new car loan."

And this beauty I heard today from a single mom making almost $50K:

"I've got $40 a month left to feed my kids. I'm better off quitting and going on assistance, I'll get an extra $1,500 direct deposit each month for my three kids."

Canadian Poncho · A Poncho Legend!

So scary. Many of these vehicle owners can't even afford to change the oil. I ran into that so many times. God help them if they needed brakes or tires. I just picked up a 1996 Honda Accord (sorry!). I don't think it ever saw a winter. Lady from New York owned it and stored it here to have to drive when she visited the island in the summer. She moved here for good and got a new car. It's inspected until October and is loaded. $800 bucks. Sure the paint is faded but that should buff out when the warm weather comes.. I don't care what the Jones with their $252 bi-weekly payments think.

73SC · A Poncho Legend!

So true Todd, I had an employee ask me for a payroll advance to pay for a $366 brake service and oil change bill on the new Mazda MX-3 that costs $249 bi weekly forever.

Jonno · Poncho Master!

Great article,
I have always felt if you can't pay for it in three years then forget it. After that you are into tires, brakes and regular maintenance plus the car payments if you have them.
The last two newer cars I have purchased have been nine years old.
I try to find lower mileage (under 130,000Km) if I can.

Canadian Poncho · A Poncho Legend!

It's extremely hard to find low mileage cars here in PEI. For such a small island folks sure do drive alot! It's not uncommon to see cars 4-5 years old with well over 200k on them.

Pontiacanada · A Poncho Legend!

Canadian Poncho wrote:
It's extremely hard to find low mileage cars here in PEI. For such a small island folks sure do drive alot! It's not uncommon to see cars 4-5 years old with well over 200k on them.

Personally owned cars (trucks/SUVS/etc.) are king on PEI. There are not a lot of alternate transportation sources for people here such as taxis, buses, trains, etc. As soon as a young person is legal to drive, they get a car, and the kms. rack up.