Prion Posted June 17, 2011 Report Share Posted June 17, 2011 Is it a wise way of spending it? I know new cars depreciate quickly but I'm looking to keep my car and perhaps pass it to a family member somewhere down the road. I know it's cheaper to get a used car. But with so many good deals going on this summer for various new models, it seems very tempting to go with something new especially with various financing incentives and discounts. Link to comment Share on other sites More sharing options...
mavrik13 Posted June 17, 2011 Report Share Posted June 17, 2011 Not necessarily a bad idea with some of the promo's I've seen... but keep in mind buying a car (any car, not just new) can drastically impact your student loans. I'm no expert, but this is what I've learned in my search on this topic. Your #1 goal (if you're coming from the traditional student background, i.e. not married/common-law, financing your own education) should be to try and stay as high above the "debt forgiveness" level as possible (I believe it is $7000) , because any debt you incur above that level (on a yearly basis) is forgiven, a.k.a. you're given free money towards your tuition. This often can translate into about $7,000 a year of money you don't have to pay back - pretty sweet deal for being a poor student. You should double check this with your student loan provider (the above is what I've heard about OSAP, haven't checked with other provinces), but I think the cutoff value for a car is around $5000 before they start taking money away from your student loans. So, if you buy a car worth $15,000, you stand to lose $10,000/year from student loans. That is quite significant... especially when you consider that $15,000 car could cause you to lose upwards of $40,000 in student loans. Clearly, that is a worst case scenario... but be sure to buy carefully. Link to comment Share on other sites More sharing options...
The Ace of Spades Posted June 17, 2011 Report Share Posted June 17, 2011 I'm compromising and keeping my old car for now, but will buy a new car when I enter third year of med school. By then I'll have a better idea of where I am financially. Link to comment Share on other sites More sharing options...
Prion Posted June 17, 2011 Author Report Share Posted June 17, 2011 Yea that's what I feared as well. However I hear there are ways of protecting your provincial loan entitlements by purchasing it under your family member's name or leasing? Can anyone comment on it? But yea mavrik, lots of good deals going on. I was looking at some good promos at Honda/Nissan for example, which is where I got the idea of getting new car from. Thanks:) Link to comment Share on other sites More sharing options...
NAD(P)H Posted June 18, 2011 Report Share Posted June 18, 2011 Yea that's what I feared as well. However I hear there are ways of protecting your provincial loan entitlements by purchasing it under your family member's name or leasing? Can anyone comment on it? But yea mavrik, lots of good deals going on. I was looking at some good promos at Honda/Nissan for example, which is where I got the idea of getting new car from. Thanks:) Hey Prion, Just bought a new civic, and my dad "owns" it. Therefore, it will not affect any student loans/bursaries Link to comment Share on other sites More sharing options...
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