# Which car you own? How much % of ur income you spend on it?



## gladaki

There are lot of blogs which says you should not spend more than 10% of your gross income on car. One of my friend who is a financial advisor by the way just spend 30% of gross income on his car...he got on 0% financing though

What abt u guys ?


----------



## KaeJS

I spent 55% of my gross income on my car(s).

I didn't finance like your friend because buying a new car is a waste of money...

I paid cash.

Keep in mind that all of these "should" or "should nots" are just a guideline and more or less useless. Everyone's situation varies. Some people can spend 100% of their gross income on a car. Some people shouldn't even spend 1%.


----------



## gladaki

cash is king  of course...but 0% financing is better than taking financing of 5% on used one


----------



## liquidfinance

gladaki said:


> cash is king  of course...but 0% financing is better than taking financing of 5% on used one



That was our thought exactly so we went new with 0% finance. Funds were left working in the TFSA brokerage accounts. By far this was the best decision.


----------



## Jon_Snow

My 14 year old truck has been paid off for a long time now. After insurance, gas, and maintenance it probably comprises about 2.5% of our monthly expenses. Once I'm retired (5 more work days BTW  ) the truck will comprise about 4% our our budget. 

Thoughts of a new car are sexy, but these low vehicle ownership costs are proving sexier these days.


----------



## MasterCard

It depends - the two main cost-drivers with the most variance are: insurance and gas. 
Insurance varies from person to person due to demographics, driving history, location, etc.
Gas varies by the car you drive (guzzler vs econobox), the amount of miles you drive, premium vs regular.

I recommend buying used and only used - but buy a quality used. Ask for the carfax (off the bat) - don't buy anything with major accident history. There is some tolerance here, but under $1000 to be safe - remember garages love to charge alot for repairs so claims are inflated. 
Then, ask the dealer if the owner gave in the service records - if the previous owner had it serviced at the original dealer - you know you're getting a good car.
Then look for cosmetics - it gives an idea of the previous owner and how they took care of the car.
Last but not least, buy a car built to last - Lexus and Acura come to mind as they last long but can be maintained relatively cheaply compared to their European counterparts (BMW, MB, Audi) as the labour rates and spare parts are very high for those cars. Avoid American (Ford, Dodge, etc.) used vehicles, they are only good new but even then avoid new due to the insane depreciation.

Hope this helped.


----------



## Plugging Along

gladaki said:


> There are lot of blogs which says you should not spend more than 10% of your gross income on car. One of my friend who is a financial advisor by the way just spend 30% of gross income on his car...he got on 0% financing though
> 
> What abt u guys ?


I don't understand the statement. Do you mean 10% is the cost of the car, the car payment or operating a car?

We currently have 4 vehicles. The costs varied from 5-25% of our incomes at the time. All were paid for in cash, so I don't see how there is a correlation between income which is a cahs flow, and paying for something in cash. Our car payments are 0%, and our operating costs are probably under 5% of our income yearly.

If someone has high networth, then it doesn't matter. A retired person could spend 2000 percent there income because their income is low, but then have millions in bank.


----------



## My Own Advisor

My 14-year-old Mazda has been paid off for almost a decade. Current car payment of about $400 per month should be dead in 2 years, intend to keep that car for another 10+ years. I'll drive my Mazda into the ground.

I would never have a car payment worth 10% of family net income, let alone gross income.

Cars are a wealth killer.


----------



## the_apprentice

Purchased a brand new vehicle last year that is about 70% of my income. Financed it for 2 years at 0.9% interest with $15,000 down. Intend to have it for 10+ years.


----------



## Ag Driver

10-15% of income for purchase. Cash is King, but I have done loans in the past.

My current vehicle is about 2.5% in maintenance alone....which I am finding to be too costly, so I am buying a new one. I buy 5 year old/100 000km vehicles and drive them for about 5 years and/or hit 200 000km.


----------



## sags

The way I look at it.........financing a new car at 0%.........we are paying for "future" use of a dependable car..........with "future" income.

How many people would consider paying their "future" utility bills in cash today.............as a good idea ?

How much the cost is as a % of monthly "net" income................would be a better barometer.


----------



## brad

We sold our only car earlier this year and have been happily living car-free. The money we save from not having a car will allow us to retire at least one year earlier, if not two. We can do it because we live in a city, near public transportation and bike paths, and with car-share vehicles within walking distance or a short bus ride away. The per-kilometer cost of owning our own car is twice the per-kilometer cost of using the car-share.


----------



## liquidfinance

sags said:


> The way I look at it.........financing a new car at 0%.........we are paying for "future" use of a dependable car..........with "future" income.
> 
> How many people would consider paying their "future" utility bills in cash today.............as a good idea ?
> 
> How much the cost is as a % of monthly "net" income................would be a better barometer.



0% finance really does make a compelling case for a dependable new car. 

In my example the money was left in the TFSA. Look at the missed opportunity cost. For sure we could have set aside the monthly payments to contribute to the TFSA but since the car purchase we have a baby, a second vehicle, a redundancy and a couple of trips to the UK and Newfoundland as well as many other expenses which may crop up in day to day life. 

Very easy to withdraw the money. Not so easy to put back. Paying a 0% loan.... Well you don't really have a choice.


----------



## DayTek

Bought our '08 Honda Civic brand new for $30,000. During that time, the government was giving credit incentives on hybrid vehicles, so we got a rebate of $4,000 after we bought the car. We put it on a HELOC @ 3.00% and paid it off in 2013. The car just rolled over 174,000 KMS and still runs excellent. We've had 0 problems. But we have also been extremely diligent about maintaining it; The car tells you what is due for maintenance along with oil changes (tire rotations, brakes, fluids, etc.) We get the car serviced at our local Honda, which may be a little more costly, but they have every single one of our records of maintenance - Honda has offered us very good trade-in value on the car on several occasions because they know it's history and it is in really good shape. And hybrids apparently sell like hotcakes  

If you want to count insurance, gas and yearly maintenance, the car runs us about 10% of our net income annually...Majority of that is gas and my husband commutes out of town.

Our plan is to drive it into the ground - No car payments are awesome! I would also definitely buy new again. I like being the first owner knowing exactly how the car as been treated.


----------



## OptsyEagle

brad said:


> We sold our only car earlier this year and have been happily living car-free. The money we save from not having a car will allow us to retire at least one year earlier, if not two.


You must be planning on retiring pretty early because the lack of a car can usually take many more years off of work then one or two.

Difficult for many to do 100%, but where the real waste is found for most families is the "second" car. Eats away at your retirement plan just sitting in the drive way and probably sits in the drive way 95% of the time. At least make this car a "used beater type car" and not a lexus. I mean do you really want to work until you are 80?


----------



## Ruger

*Listen to the Music*

I drive a 2013 Ford F150. I pay about 15% of my net income per month on it, and my interest is 5.9%. 

It all started back in 2011 when my old truck died and I needed a new vehicle. I ended up buying a brand new 2011 GMC Sierra. Not the brightest move financially but the truck served me well. The about 2 months ago, it wasn't meeting my needs. For reasons I won't go into here, the F150 fit the bill perfectly. The dealer pushed hard for me to buy a 2014, but after seeing how much I lost with depreciation on the 2011 I bought new, I refused. Instead I bought a 1 year old lease return with 35,000kms on it. It's had a few hiccups but they've all be sorted out now. 

Unfortunately, I need a reliable full sized pickup for what I do and paying cash hasn't been an option. I'm just glad I make the money to afford it.  

However, this will be the last truck I finance. I'll also be keeping this truck until it dies.


----------



## Gimme the Green

I bought new, just happened to find the exact vehicle I was looking for at a crazy discounted price, (this was early 09 when you couldn't give trucks away). I went with a plain jane ford ranger, 4cyl engine, pretty good on gas. I financed it but paid it off in a couple years. Doing a quick calc now, I can see that insurance, gas, and maintenance cost me in the neighborhood of 7% of my yearly income. That seems high to me but it is what it is. Going forward, I will pay cash for any other vehicle and it will be used. Let someone else pay the freight and crazy depreciation new vehicles experience.


----------



## Gimme the Green

Jon_Snow said:


> My 14 year old truck has been paid off for a long time now. After insurance, gas, and maintenance it probably comprises about 2.5% of our monthly expenses. Once I'm retired (5 more work days BTW  ) the truck will comprise about 4% our our budget.
> 
> Thoughts of a new car are sexy, but these low vehicle ownership costs are proving sexier these days.


Congratulations. I am beyond jealous!!!


----------



## brad

OptsyEagle said:


> You must be planning on retiring pretty early because the lack of a car can usually take many more years off of work then one or two.


I was estimating conservatively. I tallied up all the money we spent on our previous car (initial purchase price, annual registration, repairs, maintenance, insurance, and fuel) and altogether it came to about $45,000. We kept that car for 9 years, but didn't drive it very much so the cost per kilometer was high (about 42 cents/km).

We still need our monthly transit passes to get around, plus use of a car-share and rentals (probably about $1,500 to $2,000/year although it may end up being less). So you have to take those costs out of the savings of not having a car. We're about 10 years away from retirement age. If we had gone without a car starting in our 20s of course we'd shave even more years off our "able to retire" age, since we'd save $45K several times over.


----------



## My Own Advisor

That is the only way I'd pay for a new car, with 0% financing.

Even then, you are paying money every month for a depreciating asset, so might as well keep the car as long as you can.


----------



## gibor365

I really don't understand question  ...we don't buy cars every year, so % of annual income is not really relevent.... In any case we have Sienna 2006 and Honda Civic 2010 - both we both in cash (you can negotiate discount when buying in cash, so imho it's better than even 0% financing)... We pay $300 for insurance (2 cars + home) and regular maintenance


----------



## nobleea

I assume the OP means purchase price as a percentage of gross income.
For us, that would be 12% based on the purchase costs (one bought new one used). Of course they weren't bought the same year. Used car is paid off, the new one has a few months left (it's a 2013).

If you mean ongoing/financing/maintenance costs as a % of gross monthly income, then the % is 5%. After the car is paid off in a few months, that drops down to 1.4%.

Spending 30% of gross income on a single vehicle would be a ballin' vehicle for us. 25% is probably the most I would consider, and that would be cash for a used M5 or 911 as a fun car.


----------



## Xoron

The 0% financing is a smoke and mirrors game.

The cash price you'd pay for a new car would be less (and sometimes much less) than the inflated 0% pricing you'll get. There is no free lunch:

http://www.canadaloyal.com/Leasing/zero_percent.php


> *Myth:* With 0% financing, I'm guaranteed to get the best price, right?
> *Truth:* Offering 0% financing may inflate the price of a vehicle to make up for lost finance charges. This may make it more challenging to negotiate a lower price. A reputable dealer will allow you to negotiate the best possible deal before the 0%.


When I went into a Mazda dealership, the first thing I asked was "what's the best price you can give me on this car". The sales guy replied with "are you buying it or financing it?" I asked again. Same response. After a few go arounds, I said screw it and left without even taking a test drive.


----------



## Ethan

In the last year I bought a 2013 Ford Explorer and my wife bought a 2013 Volkswagen Golf. We paid them both off within a year. Total cost of $70,000 which works out to ~28% of our gross annual income.

We owned our last vehicles for 11 and 5 years. We plan on owning these for at least 6 years when the warranties run out.


----------



## Ihatetaxes

Xoron said:


> The 0% financing is a smoke and mirrors game.
> 
> The cash price you'd pay for a new car would be less (and sometimes much less) than the inflated 0% pricing you'll get. There is no free lunch:
> 
> http://www.canadaloyal.com/Leasing/zero_percent.php
> 
> 
> 
> 
> When I went into a Mazda dealership, the first thing I asked was "what's the best price you can give me on this car". The sales guy replied with "are you buying it or financing it?" I asked again. Same response. After a few go arounds, I said screw it and left without even taking a test drive.


This.

You can often get $2,500 or more as an additional discount if you pay cash vs. 0% financing. Last vehicle I paid cash for was a new Acura MDX and the total discount was close to $10k.


----------



## gibor365

Just try to negotiate price with 0% financing or payments, when you get final quote, tell "now what discount I get if I pay all in Cash"  In majority of cases you will get good discount....it applies not only for cars... I paid for my mother implant 2 weeks ago , after getting all discounts and final price.... I got another 20% discount for paying in "hard" cash


----------



## athwds

The calculation should be:

a. ( Purchase price subtract expected resale value ) divided by (number of expected years in service)
a1. yearly payments if on a payment schedule
b. yearly insurance
c. yearly gas
d. yearly maintenance

Add all of the above up and divide by your after tax income.

For me, it's about 10%.


----------



## Sherlock

Am I crazy for wanting to trade in my car for a Corvette? I no longer need the practicality of a sedan. With my budget, it'd probably be a 2006-2007 model, which would cost me slightly more than a third of my annual income. Anyone ever had one, how are they on maintenance?

Here's a nice one unfortunately it just sold: http://www.autotrader.ca/a/Chevrolet/Corvette/Toronto/Ontario/5_20445604_ON20080116103501500/


----------



## m3s

gladaki said:


> There are lot of blogs which says you should not spend more than 10% of your gross income on car.


This rule doesn't make any sense to me at all. I think of the cost of cars very differently.

I think in terms of depreciation, insurance, lost opportunity, and fuel/maintenance (in that order) I've always bought cars in cash, after all my priorities are paid (including TFSA and RRSP) I buy what I can in cash, and save money for the next one while driving it.. I mostly worry about depreciation, and I have managed to buy/sell cars privately with little depreciation costs by doing my research and knowing the car market. To minimize insurance I never pay for collision because the rates will skyrocket if you make a claim anyways and your depreciation will take a huge hit (carfax!...) Note that if you finance a car you must pay for full collision and if you don't have cash you can't self insure. Lost opportunity goes both ways imo, as a nice car enhances my life and I need a car to work so fuel/maintenance are negligible costs to me.

I never thought about % of income. I thought about what cash I have to blow on a car after my priorities are straight.


----------



## RBull

^Makes no sense to me either. 

Absolutely the same here, other than most of my vehicles have had collision insurance. The question actually baffled me for a while until I thought about it the same way you answered. 

Gladaki, did you ever end buying the Honda you posted about or the Kia I suggested you have a look at?


----------



## fraser

Bought a full load Toyota Camry new in 1997. I was able to write 50 percent off against income since the car was used for business. Kept it until last fall and now my son drives it. 325K plus mileage and no issues. Just made sure that we changed all fluids, etc. according to the specs. 

Next was a 2006 Honda Accord. Full load. Purchased in 2010 for exactly 1/2 of the price of the new model. It only had 40K on it. Took us 3 months to find this car for my spouse. It can be difficult to find a good low mileage car that has not had any accidents. Took three tries to get it. Three times we were told "no accidents" but auto club searches revealed the truth. Trust but verify!

In the mid 2000's we had the misfortune to get a new car from my employer every year. All but one spent as much time with the dealer for warranty service in 12 months than the Toyota did in 17 years. Everything from SUVs to high end luxury models to standard sedans.


----------



## dubmac

Ethan said:


> In the last year I bought a 2013 Ford Explorer and my wife bought a 2013 Volkswagen Golf. We paid them both off within a year. Total cost of $70,000 which works out to ~28% of our gross annual income. We owned our last vehicles for 11 and 5 years. We plan on owning these for at least 6 years when the warranties run out.


I'm 53, my wife, 52. We do the same as Ethan - buy good vehicles (ours is a 2008 Subaru Forester - we only put 15K miles on it per year), and take excellent care of them, and drive them to the extent of their useful mechanical life! I bike to work and elsewhere - we live without the need for a 2nd car-at least until both my boys will may need one wherein we may get a 2nd "beater" for wih 4-5 yrs left on it. 

Does anyone out there have a Mercedes Smart-Car? A friend of mine recently bought a one - he charges it (with 120V) each night and it has a 100 km range - it like a golf cart on steroids. Costs 25K. Seems like an interesting alternative.


----------



## m3s

dubmac said:


> Does anyone out there have a Mercedes Smart-Car? Costs 25K. Seems like an interesting alternative.


I thought the Smart Roadster looked interesting for a second, but it was discontinued after so many problems. BMW's Mini Cooper outsells them by a long shot, and Smart is a huge loser for Mercedes (like billions in losses) Mini and Smart both have poor reputations for reliability, and little ground clearance for the winter. A motorbike for a fraction of the cost carries 2 people, uses less fuel, more reliable, faster, easier to park.. etc etc


----------



## cainvest

m3s said:


> I thought the Smart Roadster looked interesting for a second, but it was discontinued after so many problems. BMW's Mini Cooper outsells them by a long shot, and Smart is a huge loser for Mercedes (like billions in losses) Mini and Smart both have poor reputations for reliability, and little ground clearance for the winter.


I think the diesels are still the best option overall and more of them are being offered now. I'd much rather have a VW TDI than a fourtwo, just wish they'd start bringing out sub compact low HP diesels, would likely be in the 3.5-5 L/100km range for fuel.



m3s said:


> A motorbike for a fraction of the cost carries 2 people, uses less fuel, more reliable, faster, easier to park.. etc etc


Ya but in some places the insurance (like in MB) is crazy, $1500 for 6 months! Also, no good in winter. Scooters on the other hand are way cheap but of course you still have bad weather and likely can't be used in winter depending on your location.


----------



## J Watts

gladaki said:


> There are lot of blogs which says you should not spend more than 10% of your gross income on car. One of my friend who is a financial advisor by the way just spend 30% of gross income on his car...he got on 0% financing though
> 
> What abt u guys ?


Financing (0%): $260/month
Insurance: $130/ month
Gas: $160/month
Service/maintenance: $150/year

Total: about 19% of net income


----------



## My Own Advisor

If the OP question is what % of income do I/we spend on cars, we're <10% net income. 

That includes 1 x payment + 2 x insurance + 2 x gas + 2 x maintenance and licensing. 

I think most cars are a wealth destroyer.


----------



## Synergy

My Own Advisor said:


> I think most cars are a wealth destroyer.


I agree for the most part but I'm able to expense my car and auto expenses through my business so I'm not too concerned over the "wealth destroying" aspects at this point. I do still try to keep those expenses to a minimum and buy good quality used cars.


----------



## Karen

Obviously, when we are buying a car, our choices depend on where we are in life. I bought a new 2014 Kia Forte in late 2013 when I was 70. I paid cash from my savings account, so the percentage of my gross income was irrelevant. I bought a prepaid service contract with it, and I don't do a lot of driving (well under 10,000 km/year) so my only major ongoing expense is insurance. I don't even give a thought to the crazy gas prices in B.C. because I only have to fill up every six weeks or so. I expect this car to last me for the rest of my driving life, and I realize that my choices were very different from what they would have been at a different stage of my life.


----------



## OurBigFatWallet

I drive a toyota corolla and love it. The maintenance is cheap, tires are cheap (15 inch rims) and it is awesome on gas. I can make a tank of gas last 3 weeks of regular driving in the city. I bought it new in 2008 but plan on keeping it for another 6 years (or more)


----------



## Berubeland

I finally got a much newer car, I have been thinking about it for a while as my 1999 Toyota Corolla has 380,000 km on it. I could predict it was going to die one day. I put 40,000 km on it since October. Plus no matter how good a car is, you should always have a spare in case of breakdown. 

We looked at cheap new subcompacts and my husband even brought me to test drive a new Micra. (meh) When I spoke to our mechanic he recommended another Toyota because they are so reliable and cheap in maintenance to drive. 

Our nephew came to live with us and he's like 6 foot 7 and very substantial. So the Corolla and all of the subcompacts shrunk. I wanted a hatchback as well. So then it was the Matrix for me,it's a Corolla with a different body. The Globe had an article about how boring and reliable it is. I don't really need much excitement from my car. 

I wanted to spend about 10K on a used Matrix hopefully with less or about 100,000 km but them my hubby found a used 2010 with 20,000 km on it. I paid 16K and I found the bill of sale for 25K in the glove box. I was happy I got a "new" car without the new car price.


----------



## jcgd

We just bought a new car because our Civic was written off by hail. It's old enough and needs enough work that I didn't want to keep it. 

We bought a 2014 Honda Civic brand new and added a dealer installed car starter. Came to about $24000 taxes in here in Alberta. My fiancée bought it on her own, zero down, 7 years at 0.99%. I have some higher interest debt I will put the buyout money against instead. The loan is open so we will try to pay it off in 2-3 years.


----------



## 1980z28

jeep grand cherokee ltd 2013

paid cash

9 months salary


----------



## gt_23

m3s said:


> This rule doesn't make any sense to me at all. I think of the cost of cars very differently.
> 
> I think in terms of depreciation, insurance, lost opportunity, and fuel/maintenance (in that order) I've always bought cars in cash, after all my priorities are paid (including TFSA and RRSP) I buy what I can in cash, and save money for the next one while driving it.. I mostly worry about depreciation, and I have managed to buy/sell cars privately with little depreciation costs by doing my research and knowing the car market. To minimize insurance I never pay for collision because the rates will skyrocket if you make a claim anyways and your depreciation will take a huge hit (carfax!...) Note that if you finance a car you must pay for full collision and if you don't have cash you can't self insure. Lost opportunity goes both ways imo, as a nice car enhances my life and I need a car to work so fuel/maintenance are negligible costs to me.
> 
> I never thought about % of income. I thought about what cash I have to blow on a car after my priorities are straight.


What about lost opportunity of not having a car...Time is money.


----------



## naysmitj

Bought used low mileage Santa Fe cash. Runs about 5% at 25,000 KM annually.


----------



## brad

gt_23 said:


> What about lost opportunity of not having a car...Time is money.


First, time is money only if you place a dollar value on all your time, working and not working. I don't place a dollar value on my non-working time; you can arrive at a dollar value through contingent valuation but I think it's a silly exercise. I'm not a money-making machine.

Second, not having a car saves time as well as taking time. No more trips to the garage for repairs or maintenance, no time spent shoveling out the car after snowstorms (if you park on the street), no time spent stuck in traffic, no time searching for a parking space. In my city (Montréal) I have timed how long it takes to get downtown from our house by car, public transit, and bike -- they all take consistently about the same time (if the bus is running late, public transit can take longer). I no longer have a car, but when I did I found that for errands nearby a bike was faster because I didn't get stuck in traffic or spend time looking for parking, and could avoid traffic lights by taking bike paths.


----------



## m3s

gt_23 said:


> What about lost opportunity of not having a car...Time is money.


I think driving a car is a huge waste of time. You can be productive while taking public transit (reading, audiobooks, emails etc) I once did the math that the extra time riding the bus would actually pay better than my job.. (money saved from not owning a car vs small amount of time..) Biking to work is also productive as it is cardiovascular exercise that everyone should spend time on anyways. I own a car because of convenience and because of North American culture/environment/city design.


----------



## nobleea

It entirely depends on your city and job. It takes me 8 mins to drive to work. There is never any traffic. It would take 55mins (according to google) to take transit. Biking would be a death wish as most of the drive is in an industrial area.
I would rather spend the extra time with family or sleeping. A good used car cost about $150 a month in maintenance and depreciation. The insurance and gas is almost the same price as a bus pass in this town. The supermarkets are a 10min drive away. I can walk to the corner store or safeway, but there's a cost to that as it is usually priced 20-30% more for comparable items. I'd rather go to the supermarkets. That savings covers the monthly depreciation and maintenance on the car.

I loved Copenhagen where one could bike, safely and efficiently any where in the city in any season. Edmonton is not that.


----------



## Spudd

I think in Toronto a car is a luxury item, but if you live in suburbs or a less transit-friendly city, then it becomes more of a necessity. 

When we lived in the burbs we had 2 cars, now we live in Toronto we have none.


----------



## CraigM

dubmac said:


> Does anyone out there have a Mercedes Smart-Car? A friend of mine recently bought a one - he charges it (with 120V) each night and it has a 100 km range - it like a golf cart on steroids. Costs 25K. Seems like an interesting alternative.


My brother bought one - his commute is well within the electric range (~25km). The lease deal on the Smart EV is pretty good, along with the Ontario rebate for EVs made it a pretty good deal. I think he's under $300 per month - The lease +electricity is less than he was spending on gas for his Volvo S80 (which he kept - he was replacing a less reliable old hyundai accent with the Smart). The lease of the smart and parking together is less than bus passes for him and his wife, and where they live they were likely going to have two cars anyway. 

I think if you have two cars and one is a commuter only, you're probably ahead if an EV can get the commuting job done.



dubmac said:


> I'm 53, my wife, 52. We do the same as Ethan - buy good vehicles (ours is a 2008 Subaru Forester - we only put 15K miles on it per year), and take excellent care of them, and drive them to the extent of their useful mechanical life! I bike to work and elsewhere - we live without the need for a 2nd car-at least until both my boys will may need one wherein we may get a 2nd "beater" for wih 4-5 yrs left on it.


I'm kind of different - I'll spend up to $5000 on a car, but I usually look for well maintained cars - mileage is much less important to me than rust and interior/exterior wear and tear, for instance. I've got 3 cars (one to be either disposed of or replaced now), but I'm fairly handy - one of those cars is a hobby, and I use the knowledge I gain there to let me run older cars as daily drivers. It's much cheaper to run 8-15 year old cars if you do 80-90% of your maintenance yourself, and you can get VERY good buys if you'll consider cars that need some work to pass safety. 

For myself and transit, where I work has poor transit service. If my next position is at almost any other location we've got in the city, I could get rid of that car. The only way transit really works for me is to run 4km to a transit stop (way home, opposite mornings) - it's about 20 min faster and cuts out two buses that never transfer right and are both always late.


----------



## Torrey

Ihatetaxes said:


> This.
> 
> You can often get $2,500 or more as an additional discount if you pay cash vs. 0% financing. Last vehicle I paid cash for was a new Acura MDX and the total discount was close to $10k.


I went for 0% financing on my 2010 Mazda 3 and was able to negotiate $2,500 off the price as well. Maintenance costs are minimal as the car is very reliable to operate.


----------



## My Own Advisor

Happy to own my old 14-year-old Mazda, been paid off for 9.5 years now.

I wish we didn't have a car payment but not much I can do, we needed a newer car. That payment will be done in 23 months. Can't wait!

I think cars are one of the biggest wealth killers you can spend your money on.


----------



## jwsclark19

22% of our gross combined income. 37% of my gross individual income. I commute 1 hour each way to work every day, and wanted to buy a brand new, fuel efficient and reliable car. I got a 2013 Toyota Corolla when it was brand new. I got a good deal, and 0% financing when they were clearing out that model year. I'm hoping to have it for 10+ years. Also, Toyotas retain their value reasonably well compared to some other brands. It was 0% interest for 7 years, so the monthly payment is pretty low. I can pay it off faster if I so choose, but when it's 0% interest, I might as well keep the money in my bank and just enjoy the low payments.


----------



## RBull

My Own Advisor said:


> Happy to own my old 14-year-old Mazda, been paid off for 9.5 years now.
> 
> I wish we didn't have a car payment but not much I can do, we needed a newer car. That payment will be done in 23 months. Can't wait!
> 
> *I think cars are one of the biggest wealth killers you can spend your money on*.


Yes, that might be an understatement. I just did some quick numbers.

Since 2001 I have spent ~ 209,000 net (after trade/sale of previous vehicle) on vehicles - not including several company vehicles I leased to own and subsequently sold. 

Currently the fleet is worth maybe $60K so around $150k or 10K per year out the window. This is one of my longer term goals to reduce this amount to 1/3 of this.


----------



## gibor365

We have Toyota Sienna 2006 and Honda Civic 2010... We bought cars new and paid cash (we never take loans to buy cars). I cannot imagine life in North America without car... You don't go to provincial/region parks? You don't do aport/recreation? (how would I go witout car to my hockey games with all equipment?!), my girls have figure skating 4-5 times per week, competitions all around Ontario, our friends/family live in different cities, to visit them it almost 1 hour driving....
btw, when I drive I listen to audiobooks and music, learning Spanish and other foreign languages


----------



## brad

gibor said:


> I cannot imagine life in North America without car... You don't go to provincial/region parks? You don't do aport/recreation?


True, you need a car for that stuff but it doesn't mean you have to _own_ a car. We've been car-free for the last seven months and it has worked beautifully so far. We still drive pretty frequently, but using car-share or car rental whenever we need a car. The car-share is so convenient. I would have to spend about $5,000/year on car-share or car rentals before it starts to make economic sense to have my own car. I ran the numbers based on the last car I had, which I kept for 9 years. I spent a grand total of about $45,000 on it including the purchase price, insurance, repairs and maintenance, registration, parts (new snow tires, etc.), and gasoline. Spread over 9 years that comes out to $5,000. In the last 7 months we've spent $1,744 in car-share fees, which includes gasoline and insurance, so assuming we spend twice that much each year ($3,488) we're still saving more than $1,500/year as well as a lot of hassle (no more trips to the garage, no more shoveling out the car after snowstorms, etc.).

Of course you have to live somewhere with good, convenient public transit, bike paths, etc., so it's not an option for everyone. But for the way we live and where we live, it's pretty much a no-brainer; I don't think I'll ever buy a car again unless we move out of the city.


----------



## gibor365

brad, it all depends on your lifestyle and where you live.... for our family 2 cars are essential


----------



## newfoundlander61

2014 Honda Civic Sedan, purchased cash.


----------



## nobleea

gibor said:


> brad, it all depends on your lifestyle and where you live.... for our family 2 cars are essential


and how many kids you have.


----------



## nobleea

I think it's the depreciation cost per month that matters. Not the purchase price. Would you rather buy a 25,000 car that you can sell for 20,000 in 5 years with no maintenance costs? Or a 10,000 car that you can sell for 3,500 in 5 years with an added 2K in maintenance costs?
I look at it on the expected monthly costs. You know how much you're paying for the car upfront. You can get a reasonable estimate of how much the car can be sold for in 1, 2, 3, 4, 5 years by going on kijiji and picking a reasonable price on a 1, 2, 3, 4, 5 yr older car of the same model. Repair costs can be roughly estimate depending on the warranty, and if off warranty, the brand. Maintenance costs such as oil changes, tires, brakes, coolant, etc are a constant regardless of the price of vehicle and, depending on the amount to drive per year, are probably slightly less than a bus pass for one person.

I aim for cars that have a depreciation cost of $100/mo or less. In the 5 cars my wife and I have owned and sold, only one of them has been over that amount (it was a new car lease). The two cars we have now are probably going to be a bit higher than that, likely around 250-275/mo combined. They're both 2013's, one purchased new, one used.


----------



## gibor365

nobleea said:


> and how many kids you have.


2 kids....one is already driving


----------



## RBull

brad said:


> *True, you need a car for that stuff but it doesn't mean you have to own a car.* We've been car-free for the last seven months and it has worked beautifully so far. We still drive pretty frequently, but using car-share or car rental whenever we need a car. The car-share is so convenient. I would have to spend about $5,000/year on car-share or car rentals before it starts to make economic sense to have my own car. I ran the numbers based on the last car I had, which I kept for 9 years. I spent a grand total of about $45,000 on it including the purchase price, insurance, repairs and maintenance, registration, parts (new snow tires, etc.), and gasoline. Spread over 9 years that comes out to $5,000. In the last 7 months we've spent $1,744 in car-share fees, which includes gasoline and insurance, so assuming we spend twice that much each year ($3,488) we're still saving more than $1,500/year as well as a lot of hassle (no more trips to the garage, no more shoveling out the car after snowstorms, etc.).
> 
> *Of course you have to live somewhere with good, convenient public transit, bike paths, etc., so it's not an option for everyone.* But for the way we live and where we live, it's pretty much a no-brainer; I don't think I'll ever buy a car again unless we move out of the city.


It seems you've contradicted yourself. For those of us in a rural area with no availability of other transportation services owning a car is pretty much the only reasonable option.


----------



## My Own Advisor

newfoundlander61 said:


> 2014 Honda Civic Sedan, purchased cash.


That's very good! Geez!


----------



## brad

RBull said:


> It seems you've contradicted yourself. For those of us in a rural area with no availability of other transportation services owning a car is pretty much the only reasonable option.


I don't see any contradiction. I was responding to the statement that I quoted, "I cannot imagine life in North America without car... You don't go to provincial/region parks? You don't do aport/recreation?" My point was that you don't necessarily have to own a car in order to live in North America, go to provincial/regional parks, get out for recreation, etc. Last time I checked, I was living in North America. If you live in a city with car-share, public transit, etc., you can easily get by without owning a car. Lots of families, including big families, in my city don't have cars. It doesn't mean they're stuck here with no way to get around. I lived in rural areas for most of my life and always had a car, I recognize the need for sure.


----------



## RCB

Two cars, both 2006 new off the lot, a KIA Rio5 for me and the kids, a Sorento for hubby to work and golf. Both were paid off in 2009. My Rio has about 32,000 kilometres on it. Took $60 to fill when gas was 1.37, should be about $30 to fill now. Don't know, been running on the same tank since November, even frequently using the remote start.

At this point, the car has cost me $1,666 per year (purchase price), plus 2 x $50 oil change/ yr., 1 new battery $200, 1 new set of tires for about $800, and annual, full insurance of about $850. Even having student rentals, maintaining the houses, running kids here and there, I go through no more than a tank of gas a month. I researched for what I needed, and it works. If the northern potholes don't kill her, I think she'll make it another 10 years.

Transit in northern Ontario sucks, so does walking or waiting for a bus in -20C snow squalls off Lake Superior. I'd rather pay for a car and a northern Ontario house, than car share and pay for a southern Ontario house or condo. That said, TTC rocks for those of us in the hinterlands.


----------



## gibor365

> Last time I checked, I was living in North America. If you live in a city with car-share, public transit, etc., you can easily get by without owning a car


 Again, if you don't have kids, don't go to parks or camping, don't travel within Canada, don't play hockey and many other "don't" -> yes, you can live without car in NA.


> car-share


?! Last time I've seen it was 25 years ago when I lived in kibbutz  you should've sign upfront from what time to what time you can take a car, system of priorities etc... It's a joke! 
I don't want to share car or share house with strangers


----------



## john3322

*Buy a car*

i think 10 to 16 % of income you can spend for buy a car . because of its not a too much amount and you doesn't fill any burden on your mind . so i will suggest you to spend at most 15 % of salary .


----------



## cainvest

Sure you can live life without a car, I know people that have never driven and don't even have a licence. The real question, is it worth it to you?
Personally, I enjoy driving so I have a few vehicles and wouldn't do without them even knowing it's nearly a total a waste of money. I do a good job minimizing the costs of ownership but don't go to any extremes.


----------



## Spudd

gibor said:


> Again, if you don't have kids, don't go to parks or camping, don't travel within Canada, don't play hockey and many other "don't" -> yes, you can live without car in NA.
> ?! Last time I've seen it was 25 years ago when I lived in kibbutz  you should've sign upfront from what time to what time you can take a car, system of priorities etc... It's a joke!
> I don't want to share car or share house with strangers


Car share is not what you imagine. There are companies offering it. The cars are parked in your neighbourhood, and you just go to a website or use an app to reserve a time. You can do it ahead of time, or right when you want to use the car (assuming they are available). The cars are nice and new, low km, very clean (they send teams around to clean them regularly). Insurance and gas are included in the rental rate. You just drive and return it back to the parking spot where you got it. You have a card that is used to unlock/lock the doors. 

It's not like you wander over to JoeBob's house and take his car from the driveway.


----------



## hboy43

gibor said:


> Again, if you don't have kids, don't go to parks or camping, don't travel within Canada, don't play hockey and many other "don't" -> yes, you can live without car in NA.


Some people "get" that a car is not a necessity for everyone, others don't. That is fine.

I did not have kids at the time, nor did I play hockey, but I did plenty of camping and travelling in Canada without a car. 

The bicycle I purchased on April 11, 1977, a Raleigh Super Grand Prix for something like $400 has something like 75,000km on it. Yes, that is the exact date I purchased it. It is likely the single best thing I ever bought. It went between Ottawa and Southern Ontario about a dozen times . It went from Winnipeg to Vancouver. It went up and down the streets of Ottawa for years. I still have its carcass in the barn. Oh, where did I stay while out of Ottawa, why I camped of course.

So yes, your lifestyle "needs" a car. I accept that. Don't really care one way or the other. I would just hope that you can accept that others can and do live differently. 

I never had ownership in a car until age 35, and since then most years it has been only one. Not owning a car all those years is likely the largest single determinant in my financial well being now. I tell people that not owning a car all those years paid for my first house, which it did and then some when you run the future value of an annuity on car ownership figures for 19 years or so. Frankly if I remained single and in Ottawa, I still would not own a car and accept ownership of one (but only one) now out here in the hinterland.

For any 20 somethings without a solid job this summer I invite you to: find a buddy, a used $500 mountain bike, panniers, tent, sleeping bag and head out across this vast and great country for a month or four. It will be the experience of a lifetime at a cost of $1000 in capital investments and $20/day (maybe $10 if you are really thrifty). You will be the fittest you will likely ever be in your lifetime. You will be able to eat as much of you want of anything you want, and still lose weight. It will be the most freedom you will ever experience. I envy you. I'd join you if I could.

hboy43


----------



## dave2012

I really wonder how much better you can do on negotiation by paying cash vs financing at 0%. We have paid cash on our last 2 or 3 vehicles and usually do really well on negotiating a great price. Thoughts?


----------



## gibor365

_



I would just hope that you can accept that others can and do live differently.

Click to expand...

 _ I fully accept it and I mentioned that it depends on everyone lifestyle.... For example my mom doesn't have and doesn't need car  I also encourage people not to have cars, as it already too much traffic  



> I really wonder how much better you can do on negotiation by paying cash vs financing at 0%. We have paid cash on our last 2 or 3 vehicles and usually do really well on negotiating a great price. Thoughts?


Every case is different , but usually you can get nice discount...... don't tell up front that you want to pay in cash..... negotiate price with financing first....when you get final price , ask what discount you gonna get if you pay in cash.... no additional discount, just wasl away....


----------



## Video_Frank

It's hard to say. I've bought 4 new cars, all from either brokers or Car Cost Canada. CCC gave me a no-haggle price which, I believe, was lower than I could have negotiated on my own. The prices for accessories and trim packages were also reduced. It was at the end of that process that the method of payment was discussed. I would not have received a lower price by paying cash so I took the 0% Toyota financing. I had the cash ready to buy the car outright so I took the 0% and put the cash into a People's Trust savings account at 1.8% interest.

To each his own.


----------



## hystat

I saw a zipcar parked on a camp site in Algonquin park last summer. 

I still have my 07 Crown Vic. I paid $13K for it in 2008 with 38,000 km on it. It has 124,000 km now. It has cost me a set of brakes ($400 or so did it myself), rear axle seals twice ($100 - did it myself) one battery ($100) and a set of tires ($800). then oil changes, and I changed the trans fluid once and the rear axle fluid twice. It runs and drives like new- seems decent on gas, but I have never tracked fuel costs.


----------



## brad

hystat said:


> I saw a zipcar parked on a camp site in Algonquin park last summer.


Depending on the price of gasoline and whether your credit card covers some of the insurance of a rental car, using car-share can be cheaper for long trips (up to several thousand kms) than renting a car. We use Communauto (Montreal's version of Zipcar) and used it to take a few long trips last year, including beaches in Massachusetts. It was cheaper than renting a car.


----------



## HaroldCrump

Renting a car for cross-border trips is brutal.
The top agencies like Enterprise, Avis, etc. impose mileage restrictions, and other fees.
Some of the smaller, local agencies don't even allow it.

brad, is Zipcar easier in this regard?
Sounds like it is.
Can you elaborate how they handle cross-border trips?


----------



## brad

HaroldCrump said:


> Renting a car for cross-border trips is brutal.
> The top agencies like Enterprise, Avis, etc. impose mileage restrictions, and other fees.
> Some of the smaller, local agencies don't even allow it.
> 
> brad, is Zipcar easier in this regard?
> Sounds like it is.
> Can you elaborate how they handle cross-border trips?


Actually Budget allows you unlimited miles even for crossing into the US, so I've been using them for my longer rentals. At least that's the case here in Québec.

I don't know how it works for Zipcar, but with Communauto all you do is reserve a car at the long-distance rate and specify that it's for the US. Whenever you reserve the long-distance rate (in which you're charged by the day rather than the hour), the web reservation interface asks you for your destination (e.g., elsewhere in Canada, in Québec, or in the United States). I assume the insurance rate is slightly higher; insurance and gasoline are included in the car-share price so I don't know. But when I've done cost comparisons, Communauto usually comes out a little cheaper than Budget, even with unlimited kilometers for Budget.

Right now with gasoline prices at a relatively low level, it might make more sense to rent from Budget for longer trips. Also, if I had a credit card that covered insurance for car rentals, that would make renting a better deal as well. It's really the insurance and the fuel costs that tip the balance toward Communauto as the more affordable option. I'm going to apply for another Visa card that covers car rental insurance to make longer trips more affordable with a rental car.

The best thing I've found with Communauto is timing: with Budget you have to bring the car back during business hours; if you're late you're charged for an extra day. Sometimes I come back from long trips late at night. With Communauto it's no problem because you just reserve the car for a pickup and dropoff time, there's no attendant, so you can return it at 11pm (or 3am or whatever) if you need to. 

The only downside I've found so far is that Communauto restricts long-distance use around the holidays, apparently because cars are in such high demand. Other than that I've had no problems at all, it's very convenient.


----------



## Spudd

With returning to Budget late at night, can't you do this using their dropbox? All the car rental places here have that - if I return after business hours I just park it in their lot and put the keys in the dropbox. It's charged as though I returned it at opening time of the following day. 

If that's what you meant already, then just ignore me.


----------

