More than half of all car loans in Canada are for 84 months

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Comments

  • rpf65
    rpf65 Posts: 2,127
    Guess most Canadians hate math as much as most Americans.
  • nooshinjohn
    nooshinjohn Posts: 25,034
    Fools and money are soon parted... and I used to be the biggest fool of all.
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    “When once a Republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is either useless or a new evil.”— Thomas Jefferson
  • decal
    decal Posts: 3,205
    Most people live month to month. Long term lower monthly payments are all they can afford.
    If you can't hear a difference, don't waste your money.
  • VR3
    VR3 Posts: 27,966
    Sold cars for a few years... Brought an interesting perspective to my life.
    - Not Tom ::::::: Any system can play Diana Krall. Only the best can play Limp Bizkit.
  • motorhead43026
    motorhead43026 Posts: 3,892
    edited October 2018
    Car loans will be one of the catalysts for the next recession in the US, but it will also be a good time to pick up a truck on the cheap.
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    The best way to predict the future is to invent it.

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  • Willow
    Willow Posts: 10,862
    It's not a bad thing if you keep your car. But most people are like fish. The new shiny thing looks better and go after it. We bought our rav4 7 years ago cash. It was used, it's 11 years now and has only a bit of skin cancer otherwise great vehicle. Our rdx bought used @.99% for 5 years. Almost free money and yes we will keep it. So 84 months isn't a bad deal if you keep it.
  • mhardy6647
    mhardy6647 Posts: 32,926
    edited October 2018
    Not a bad deal as long as the interest rate is (as we say in New England) wicked low (zero is best!)

    We financed Mrs H's CR-V when she bought it because the interest rate was so
    low
    it made more sense than paying cash. 'Twas the first time we ever financed a car (other than "self-financing", which, when interest rates are high, can be cost effective).


  • NotaSuv
    NotaSuv Posts: 3,811
    Very smart Pappy
  • BlueFox
    BlueFox Posts: 15,251
    Paid cash for my current car, 2005 Mazda3, and will pay cash for my next, and last, car.
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  • ^^same here, paid cash for my current car (2014 CRV) I should be good for one
    more before my dirt nap.



    2 channel: Anthem 225 Integrated amp; Parasound Ztuner; TechnicsTT SL1350; Vincent PHO-8 phono pre; Marantz CD6005 spinner; Polk SDA2BTL's; LAT International speaker cables, ZU Mission IC's and power cables all into a PS Audio Dectet Power center.

    Other; M10 series II, M7C's, Hafler XL600 amp, RB-980BX, Parasound HCA-1500 amp , P5 preamp, all in storage. All vintage Polk have had crossover rebuilds and tweeter upgrades.

    The best way to predict the future is to invent it.

    It is imperative that we recognize that an opinion is not a fact.

    Imagine making politics your entire personality.
  • kharp1
    kharp1 Posts: 3,453
    Probably a lot of trucks or big SUV's in Canada, and, with prices approaching $100k it makes a 48 month payment pretty steep.
  • Emlyn
    Emlyn Posts: 4,346
    Apparently, the figure is around ten percent of US auto loans are for 7 years. The standard is still 5 years for US bank lenders. I suspect there are far more US buyers who lease vehicles for lower monthly payments than Canadian buyers though, but I haven't checked.

    People in Canada would not be getting manufacturer financing for 7 years, which means most are probably getting loans from finance companies similar to those that were selling mortgages to subprime borrowers last decade. And that didn't turn out so well!

  • Airplay355
    Airplay355 Posts: 4,298
    One car I own, the other has two years left on a 4 year 0% loan. New car prices scare the crap out of me. I love cars but I could never pay for one for that long. I think you can even get a 10 year loan now. Im glad it works for some people but I also see it as a way to jack up car prices. Isn’t the average price of a new car something like $30k now?
  • verb
    verb Posts: 10,176
    Leasing is becoming more popular these days.

    Often you can find a lease rate for extremely cheap. Here in the Detroit area you can easily find a brand new vehicle for $100 - $200 month, no money down.

    Yeah you turn it in after a few years, but you then get another brand new vehicle. Kinda like an appliance, according to the marketing research out there.

    Mileage is a restriction though. Those folks that drive a lot of miles annually, leasing is not a good option.

    And, the leased vehicles are usually fully covered by the warranty during that period.

    Not for everybody, but leasing gets you into something that you ordinarily couldn't afford if purchased.
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  • pitdogg2
    pitdogg2 Posts: 24,477
    I don't know a lot of the leases in my area ask for 4k down. To me that takes all the incentive away for a lease plus the mileage penalty at .25 per mile over so much a year.
  • mhardy6647
    mhardy6647 Posts: 32,926
    edited October 2018
    Leasing is totally impractical for us, as each of us puts ca. 20k miles on our respective car per year.

    Mrs. H's 2005 Ford Escape 4WD Hybrid on its Last Day (June 2016):

    28458485635_2f66101d8f_h.jpg039a by Mark Hardy, on Flickr
  • Dabutcher
    Dabutcher Posts: 2,588
    I always save up for next vehicle and pay cash. Lucky for me it works with no emergency coming up to have to finance. I have never owned a new vehicle. Closest I have gotten is a one year old Sienna and saved 8K over new. I love Toyota’s . Most reliable vehicles on the planet and all Sienna’s and Tundra’s are made in America. Which is a big deal to me. Americans making great cars and trucks. I love my ten year old Tundra.
    Love yours,Dxdtgmb3cg8e7.jpeg
    MIT Magnum MH-750, Monster HTS 5100MKII, Sony 77" Class - A80CJ Series - 4K UHD OLED,PS4, Def Tech 15” sub,LSIM 706c, Sunfire Signature Grand 425 x 4,Parasound hca 120, LSiM 702 x 4, Oppo 103D, SDA SRS 1.2, Pioneer Elite SC63 , Pioneer Elite BDP-05 “Why did you get married if you wanted big speakers?”
  • kevhed72
    kevhed72 Posts: 4,950
    I think the target market for leased vehicles is....rich people who always want to be driving a shiny new car.
  • lightman1
    lightman1 Posts: 10,776
    I'm homeless and have no need for a car.
  • nooshinjohn
    nooshinjohn Posts: 25,034
    lightman1 wrote: »
    I'm homeless and have no need for a car.
    But you could use some new underwear. The pair you have on now have at least 200k miles on them since the last washing...
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    “When once a Republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is either useless or a new evil.”— Thomas Jefferson
  • kharp1
    kharp1 Posts: 3,453
    Believe it, or not, but sometimes there are better incentives for leases that make them better options. I would have never believed that but saw it for myself today. Even with low mileage restrictions it was more beneficial to take the 4k incentive to lease and then buy it for residual in 3 years.
  • nooshinjohn
    nooshinjohn Posts: 25,034
    edited October 2018
    When they start 30 year programs, let me know...

    ks5sy4phy46u.jpeg
    The Gear... Carver "Statement" Mono-blocks, Mcintosh C2300 Arcam AVR20, Oppo UDP-203 4K Blu-ray player, Sony XBR70x850B 4k, Polk Audio Legend L800 with height modules, L400 Center Channel Polk audio AB800 "in-wall" surrounds. Marantz MM7025 stereo amp. Simaudio Moon 680d DSD

    “When once a Republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is either useless or a new evil.”— Thomas Jefferson
  • decal
    decal Posts: 3,205
    lightman1 wrote: »
    I'm homeless and have no need for a car.
    But you could use some new underwear. The pair you have on now have at least 200k miles on them since the last washing...

    You seem to know a lot about his underwear!!!!!!!!!
    If you can't hear a difference, don't waste your money.
  • nooshinjohn
    nooshinjohn Posts: 25,034
    decal wrote: »
    lightman1 wrote: »
    I'm homeless and have no need for a car.
    But you could use some new underwear. The pair you have on now have at least 200k miles on them since the last washing...

    You seem to know a lot about his underwear!!!!!!!!!

    There was a story in the news about them being more deadly than smoking a carton of Lucky Strikes daily for a hundred years....
    The Gear... Carver "Statement" Mono-blocks, Mcintosh C2300 Arcam AVR20, Oppo UDP-203 4K Blu-ray player, Sony XBR70x850B 4k, Polk Audio Legend L800 with height modules, L400 Center Channel Polk audio AB800 "in-wall" surrounds. Marantz MM7025 stereo amp. Simaudio Moon 680d DSD

    “When once a Republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is either useless or a new evil.”— Thomas Jefferson
  • tonyb
    tonyb Posts: 32,902
    kharp1 wrote: »
    Believe it, or not, but sometimes there are better incentives for leases that make them better options. I would have never believed that but saw it for myself today. Even with low mileage restrictions it was more beneficial to take the 4k incentive to lease and then buy it for residual in 3 years.

    Maybe, but not in my state. You'd be paying tax on that car, twice, under that scenario. The fine print is really fine in some states.

    Lease a car with no money down....sure you can, but in the fine print you may have to cough up some capital cost reduction. You pay sales tax on a car too, say a 30-40k car....would be an extra 3-4k in taxes. Buy it for residual after a 3 year lease, yep you pay taxes again.

    In my state, leasing is for those people who don't drive much and never want to deal with auto repairs, and don't mind having a payment their whole life.

    7 years on a car loan is crazy. Especially since some cars may not make 7 years without a major repair needed. These types of programs remind me of what went wrong with the housing market and their free money loans. The other day I saw advertised a 7 year loan for a mattress...a frickin' mattress.
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  • mhardy6647
    mhardy6647 Posts: 32,926
    I think most automobiles today are a pretty low risk in terms of major repairs for seven years.
  • Jimbo18
    Jimbo18 Posts: 2,310
    edited October 2018
    My wife and I buy slightly used cars (my latest one an Accord with 3,500 miles on it). Take a 4-5 year loan and drive the car for 10 years, alternating who gets the new one. So, we always have one car payment, but never 2. Most cars can easily go 10 years anymore without too many issues.

    Not saying it's the best way, it's just what works for our financial situation.

    Post edited by Jimbo18 on
  • My last 2 cars including my most recent (3 total), have been Honda Certified used. I let others take the depreciation. I have bought one new car in my life, that was 1974.

    I drive my cars 7-10 years minimum.
    2 channel: Anthem 225 Integrated amp; Parasound Ztuner; TechnicsTT SL1350; Vincent PHO-8 phono pre; Marantz CD6005 spinner; Polk SDA2BTL's; LAT International speaker cables, ZU Mission IC's and power cables all into a PS Audio Dectet Power center.

    Other; M10 series II, M7C's, Hafler XL600 amp, RB-980BX, Parasound HCA-1500 amp , P5 preamp, all in storage. All vintage Polk have had crossover rebuilds and tweeter upgrades.

    The best way to predict the future is to invent it.

    It is imperative that we recognize that an opinion is not a fact.

    Imagine making politics your entire personality.
  • pitdogg2
    pitdogg2 Posts: 24,477
    edited October 2018
    The most I've spent on a vehicle is 3500.00 and it is the one I'm driving now. 03 F150 Heritage 227,000 on the odometer still runs like new. Uses/leaks no fluids, i work on my own vehicles and I'll drive it until the frame rusts through. Spent its first 10 years in Florida so very little rust under it.

    @tonyb is correct our state just rapes you 7 ways from Sunday