Purchasing a vehicle...?

[Guest Don Corleone]

Hey everyone!

 

I was just wondering if any of you have already or plan to purchase a vehicle. If so, which vehicle? New or used? Leased or financed?

 

Does leasing or financing a vehicle affect your student loan situation? what if you *register the car to a parent?

 

I realize that everyone has their own financial obligations and responsibilities and thus everyone will not do the same thing, but it would be nice to know what you crazy kids are doing these days

 

Thx.

 

Btw, has anyone checked out the new Audi A3?? INSANE!!

 

DC

[Guest OS McMac]

Just some thoughts...

 

I'd recommend to purchase/finance as opposed to leasing. This way you end up with at car after 3-4 years thats yours and you dont have the severe km restrictions. Lease is 24k km per year and for example i put on 34k km last year (penalty ~$0.25/km on a lease).

 

New/used? depends on your budget, financing a new car for 4 years will easilty put you in the high hundreds/month for say a $25k car + gas + insurance. A3 with 0 down probablly $1000/mnth for 4 years. I'd recommend a certified used car since prime rates are low and you can get a used car at ~4% unlike the 8-9% which was common a few years ago.

 

Putting it under your name does affect your loan applications as it is seen as a asset/aliaiblity. Put it under a parents name and this alleviates the problem.

 

Car recommendations... check consumer reports for reliability, etc. Also remember gas is commonly $0.90/L so this can really hurt even for a 6 cyl car or 4cyl turbo (A3). I have a Vw Jetta TDi (same platform as A3) which gets about 1000km on $35-40 which is great if you drive allot. Other recommendation most japanese cars - rsx, accord, altima, camry, corolloa, civic are all tough an reliable. Avoid most german cars as they seem to be slipping in quality and are pricey for what you get. My vw tends to have its quarks. Domestics have always been cheaper but poorer quality (depends how far past warranty you want to go). Also korean cars are moving up really quickly in build quality and are great value.

 

Just $.02

[Guest squishymichy]

Hey,

would I be able to register the car in my mom's name if she already owns her car and I need to be the primary driver for insurance on my car?

Thanks

[Guest Jochi1543]

It doesn't matter whose name the car is registered in for the purpose of insurance. I've had a friend driving my car for 4 months while I'm in Japan, the insurance has him as the primary driver right now until I come back and switch the insurance in my name.

[Guest NurseNathalie]

great thread! I never would have thought of discussing it here..lol but, I also need some advice in this regard

 

I will be travelling home from Hamilton to Sudbury weekly. My main priority for the next three years (3-5 yrs) : have a reliable vehicle, while maintaining the lowest monthly payment possible.

 

although there are a lot of great promotions out there on new vehicles, the monthly payments are higher than I'm willing/able to spend (since I have to add insurance, gas, etc etc).

 

A leased vehicle is cheaper (monthly only, I know it will be more in the long run) then a newly financed one. My problem is the km restrictions... I anticipate almost 50 000 per year (also why I don't want to buy used!) and the usual lease allows for 24 000km.. so in the end, I will get dinged really bad for going over UNLESS I buy out at the end (which is what I planned to do)... then, the kms don't matter. This will save me some time while in school, allow me to drive a new vehicle (and feel safe on the road because of it) while keeping my monthly payments as low as possible for the next 5 years.

 

I looked at a used vehicle, but found that with the interest rate is a lot higher of course (almost 7%), the monthly payment was almost as high as a lease for 5 years!, and you can't know what you are walking into with a used car.. and, since its a little older, resale value not as high in 5 years from now (that's how long I need the vehicle for)...

 

so far, thats what I'm looking at doing... purchasing vehicles is so not my thing.. if there's something I haven't thought about, I would appreciate suggestions

 

Nathalie.

[Guest OS McMac]

Hi Nathalie,

 

Just going to throw some more ideas at you with regards to your situation as mine was similar. Consider a certified used car from a dealership. I mean an actual wide-spread new car dealership not a used car dealership because otherwise the warranty is a waste of time. Whats going on right now is that since new car lease are so easily availabe, everyone leases cars and then returns them after 3 years for a new one. What happens is that these dealers have lots full of 3 year old ~60-75 k km cars that they are dying to get ride of.

 

Finance rates at dealers arent that high, typically 4.9-5.9%. Another alternative is, if this is possible, get an rbc line of credit ($150k) and dump the car onto there. This puts you at a prime interest payment (4.25% currently) and your only paying the interest and not the principal untill 12 months after your residency. This works out to be ~$70.83 a month (interest only) for $20k. Of course you could pay say $400 a month and pay the car off. Since the mac program is only 3 years the rbc loc gives you a nice surplus to do something like this with providing you get approved (i see that your a registered nurse and thus are older with a past income).

 

Even with the dealership route its not too bad. Example: I bought my car last summer. Its a 2000 VW jetta tdi (original msrp $34,000 + tax) that had 100k km and i paid for it $19,000. This was with a 2 year (40k km) vw warranty, and fully serviced and certifed (tires, brakes, engine, etc.). maintenance). I have it on finance @ 3.9% / 4 years equal to $400/month w/tax.

 

For your purposes of driving 50k a year my only advice would be: diesel, diesel, diesel! This is because a) they get about 1000 km per $35-40 tank diesels are far less strained and last about 500,000km on the original engine (granted only the engine lasts this long) c) becuase of B, resale value is about 25% higher for an equivalent gas car d) diesel costs are typically (although not recently) 5 to 10 cents below bronze.

 

Diesel cars avaialbe: VW Jetta TDI, Golf TDI, Passat TDI; MB Smart CDI

 

If you have any other questions feel free to ask, be glad to try and help.

 

Good Luck

[Guest squishymichy]

Hey Natalie, I think you were in my interview group at McMaster (young girl, brown hair, black suit). I am purchasing a car right now too and the best advice I have heard is to get a honda if you're putting a lot of kms on it, because the honda engine is incomparable in terms of reliability. Another option honda has is putting down a security deposit, wherein you put down 7 months worth of lease payments at the regular 3.2% and your leasing rate is then only 1.7%. At the end you get back your security deposit cash. It works out to be a good deal and at least you can leave your money invested. Civics are reliable little cars with great engines and are great on gas. Anyways, best of luck.

Michelle

[Guest NurseNathalie]

Hey Michelle..

 

I may have been in your interview group? umm.. although, im not young - maybe its the oil of olay ?? (*shuffling my walker to my chair.. to get comfy while i write this post*)

and i was wearing a black skirt/jacket and beaded (native) necklace .. um.. other than the necklace, I looked like a fatter clone of the other 300 people there! lol (i interviewed on Sun march 6th)

 

thank you so much for the responses! doh! i never even THOUGHT of diesel! makes a lot of sense! had I done an undergrad in theoretical physics instead of nursing, perhaps I could have built my own transporter by now.. doh! *beam me up, scotty!*??

 

I got a LOC through MD management.. so, I do have some funds.. but I had to make a strict monthly budget until I know how our (rather large) family will manage with the loss of my income combined with now paying an arm and a leg for school! (It would have been useful to have been born looking like one of those hindu goddesses with the 12 arms.. then, i could be in school for YEARS!) :smokin

 

I will go to the dealership again, and see what they can suggest

[Guest ploughboy]

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Hey,

 

I drive a '94 diesel golf, which I bought used several years ago. I've put between 40,000 and 50,000 km per year on it, and at the moment the odometer reads just under 400,000 km (although the engine itself has only 50,000 km on it - at 350,000 I fell victim to the infamous "crankshaft keyway" problem -- a design flaw which has been fixed in the TDI engines and is something you won't have to worry about if you buy/lease a modern VW diesel). Since the body is in pretty good shape I intend to keep driving this car until the end of my residency six years hence, at which point it will likely have around 700,000 km on it and I'll be bloody sick of driving it.

 

I get between 5.5 and 6.0 litres per 100 km, depending on the time of year, and amount of city driving I do, etc. This translates into roughly 1000 km between fill-ups. Not only is the fuel economy better, but diesel is usually several cents cheaper than gasoline, although this hasn't necessarily been the case lately (which is kind of odd, considering where both fuels come off the cracker).

 

I just did a quick back-of-the-envelope calculation here, and if you drive 50,000 km/yr, you'll save approx $1000-$1500 per year in fuel costs driving a diesel.

 

Funny story: coming back to KW from London a couple of weeks ago I stopped for fuel on the 401. This truck stop was selling gasoline and diesel for approx 10 cents/litre less than it was selling for in London, and there was a *huge* lineup of cars at the gas pumps - it looked like a scene out of Mad Max. I rolled into the almost-empty area where the big rigs fill with diesel, refueled and was on my way in a couple of minutes -- laughing all the way.

 

On the other hand, fuel economy shouldn't be the only criterion you consider. While fun to drive and fairly reliable, VWs tend to be fairly expensive to fix when something does go wrong. The money you save on fuel could wind up going to parts and labour if something goes wrong out of warranty.

 

Those CDI Smart cars are reeeally cute, but I don't know if I'd feel comfortable driving one on a 400-series highway. If you have a large family, maybe something like a Jetta station wagon would be appropriate?

 

Lotsa luck!

 

pb

 

 

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[Guest Anish P]

... if you drive 50,000 km/yr, you'll save approx $1000-$1500 per year in fuel costs driving a diesel.

You can save even more money (potentially) by producing your own (bio)diesel :hat

 

If I were to get a car, I would get a diesel car... they are more expensive initially (the engine has to be built a lot stronger to withstand the diesel compressions) but you'd save the money later on via better gas mileage. Diesel cars seem to emit more particulate matter in their exhaust... but, I heard somewhere that in 2006/7, the EPA (and Envt. Canada) will impose restrictions that will decimate the sulfur concentrations in diesel fuels... which will result in cleaner emissions.

 

Plus, I think renewable alternative fuels like biodiesel (which burns clean) will become more popular (and hopefully cheaper) in the near future as conventional gasoline prices go higher and higher in lieu of the pending peak oil situation...

 

Anish

[Guest OS McMac]

few more comments:

 

With regards to repairs, if you buy a vw do your best to find a warranty. These cars although fairly reliable, are in the shadow of honda or toyota in terms of relaibility and tend to give here and there with repairs (like at any other dealership) being expensive. Also labour quality is a bit down these days (last and current gen jetta and golf are built in mexico not germany) although this is largely offset by better material quality (bosch components, etc.) . Bottom line new vw diesels are good mechanically and electrically but they have they're quarks that are pricey to repair. Mine has had suspension trouble, my passenger window fellout :rolleyes , and paint problems, but thanx to warranty its all largely been covered.

 

With regards to the fuel itself its actually cleaner in all aspects than gasoline (co2 and hydrocarbon levels) except for sulfur content which is something like 4 times higher (just a guess). From what i heard the passenger vehicle (not truck) industry in the U.S (not canada for now) will be banning diesels by around 2010, but if they manage to clean the fuels and combustion to drop these levels than the oil burners will be saved

 

OS

[Guest NurseNathalie]

thanks for the input everyone ! very very much appreciated

 

I was told that diesel vehicles are very hard to start when its cold out (unless plugged in all the time) .. I'm not sure if that is true or not though, since I have never owned a vehicle that ran on diesel.. plus, maybe they have bettered the system since?? just wondering about that, since it may be harder to plug in my car in Hamilton...

 

as far as the environmentally friendly fuels, well.. that would be really nice! and I hope that in a not-to-distant future we ALL drive those vehicles.. but for the time being, I think that it would be really hard to find in Sudbury (perhaps??) and since its so hard to come by here.. may be a little pricey??!! but thats an opinion only, and definetly NOT based on fact or even a shread of knowledge

[Guest OS McMac]

Hi Nathalie,

 

Just to answer your question before i head home, diesels used to have a real hard time starting in cold. This is because diesel dont use a spark to ignite the fuel, only compression (generates heat). Phys 101, the colder something is, the denser, the harder to compress, and hence harder to ignite.

 

However modern diesels have really good glow plug systemss that warm the mixture prior to starting. No need to plug the car in, these are built into the car, you only need to turn the key, wait a few secs for the glow plugs to heat (indicate by light on dash) and turn her over.

 

Last year we hit -40's with windchill and my car was always outside, often left for a week without beeing moved. Even on the coldest of days, she'd turn over on the first try. This is the general consensus with modern diesels.

 

Best of luck.

 

OS

[Guest vitegeist]

The 'rents bought a corolla in 2003 and it's worked out really well. Not an ugly car, it's very fuel efficient, fits 4 people(+luggage) well, and has had no problems thus far. It's driven around town on weekdays, and 800km of NWOntario highway every second weekend.

 

The shelf life on those corollas and camrys is pretty good, according to consumer reports. I don't know if that'll help. Happy shopping anyway!

[Guest megs29]

My family has a 1995 Toyota Corolla and we love it. We've had almost no problems with it at all. It's like brand-new. I would definitely recommend one. It's great on gas (especially if you get a standard) and it's very reliable. Parts are a little more expensive because it's foreign, but we haven't had to buy any in 10 years, so it's not really a problem.

 

Megs

[Guest HenryTheBig]

Hey,

I'd say go for a japanese make and a used one. You can get a used Honda or Toyota for a low price. Those Civics, Corollas, Tercels, or Echos are relatively cheap and trust me..they won't cause any problems. They just keep going. Leasing is not the best way to go if your short of money (ie. a student). A new car will depreciate so much in the first year so it really isn't worth it at all. Used and japanese is the way to go.

Henner

[Guest satsumargirl]

Somewhere earlier there was a question about whether the car affects student loans.

 

YES. I can only speak about OSAP.

 

LEASED or owned OSAP will consider it an asset.

You can have a car at 5k or under without penalty. If over 5k they will take the difference (eg. 6k if your car is worth 11k) and subtract from what you are entitles to (e.g entitled to 8K OSAP...you will get 2K).

 

At Ottawa in your clerkship years you will be entitles to a 10k car without penalty since the Univ will make an argument that you need your car for your studies.

 

If you need a car and need OSAP consider leasing a @#%$ car that will depreciate fast. That way you will drive a car and have more OSAP and you don't own it so you won't care.

 

The financial aid consellor I saw warned not to get a honda! They don't depreciate!!

 

As for buying or leasing it depends on your situation.

I leased. Had 24k/year. I've had it for 3 years and only have a total of 41k on my car. So I am way under my limit.

You can also buy it at the end if you want to. You can buy it out at anytime actually.

 

Anyway, leasing or buying is a personal decision and depends on so many things. A car is a rusting heap of metal with wheels, so I don't mind not owning it. I just look at a lease as renting wheels. At the end of it I likely don't want the responsibilities of repairs and new tires and the time to bring it in etc..

 

But either way it will affect your OSAP entitlement