Buy new or used car (Debts and Insurances Money)

Netixx wrote: ↑ Hi there, need some personnal finance advice.. (Sorry in advance english is my second language)

Totaled my card the other day and I'm gonna receive 20 700$ from the insurances company. I had a 2010 Subaru Impreza with 120 000km on it. (Had some options on my insurances : value paid + 5% / per year)

Anyhow, I don't know what I should do.. I have 17 000$ left on a line of credit at 3.67% so I could use the insurances money and completly pay it off.

I could buy a new car where my Dad's work and get a 2017 Cx-5 GS AWD at cost. I still don't know how much It would be since my dad is still in vacation (Around 450$/month for 84 months at 1.9% or 500$/month for 72 months at 0.9%)

Or I buy a used car with the 20 700$ and still have 17k left on my line of credit..

UrbanPoet wrote: ↑ Your LOC interest is probably higher then the 1.9% loan.
Since you got a hookup to buy it at cost (assuming they are telling the truth and its not just a sales tactic)... I would actually just use the insurance money to pay off the LOC. That will leave you with a few G's left over. Then just finance the newer car @ 1.9%

Netixx wrote: ↑ Thanks for the advice. My hookup is my Dad (the director of sales) so I hope he doesn't screw me over haha

UrbanPoet wrote: ↑ If thats the case... Then great. If you're in the market for a new car, go for the mazda @ 1.9% since its a good deal and low interest rate.
This will leave you with a few G's you can put into your TFSA. Or new custom rims for your mazda. Just kidding, do the responsible thing & put it in your TFSA.... or should you? O_o

Epiclemon wrote: ↑ We are rfd so I'm gonna suggest what I think most of us here would...why not get a used car? In the long run you're saving much more money.

Epiclemon wrote: ↑We are rfd so I'm gonna suggest what I think most of us here would...why not get a used car? In the long run you're saving much more money.

titaniumtux wrote: ↑ Although the interest rate on that LOC is relatively low, still better to pay it off. Car loan interest rate at 1.9% is lower.

bewiseman wrote: ↑ Careful with this assertion. Often the car will cost less if you pay with cash. After accounting for this, borrowing at 1.9% can feel more like 4 or 5% since you're paying that 1.9% on a higher base car price.

Netixx wrote: ↑ I could probably qualify for the -1% interest promotion by Mazda but I'm not sure yet. So that could put that 84 months at 0.9% instead of 1.9% and the 72 months at 0%

titaniumtux wrote: ↑ 0% for 72 months would be awesome. Kind of a no-brainer if it's the vehicle you want.

abc123yyz wrote: ↑ I personally buy used cars (3-4 years old). Cars depreciate the most in the first 3-4 years. Why put money in a depreciating asset? My family drive is a 2014 Chrysler town and Country I got last year. Under $17k, buying the same car 2017 model would have been $32k.

I would pay off the LoC and put the remaining towards a used car. See if you can add some money on top and purchase a good used car with cash. Be debt free!

In my opinion you should only borrow money for things that will provide a ROI. Education, housing, investing.

Netixx wrote: ↑ Hi there, need some personnal finance advice.. (Sorry in advance english is my second language)

Totaled my card the other day and I'm gonna receive 20 700$ from the insurances company. I had a 2010 Subaru Impreza with 120 000km on it. (Had some options on my insurances : value paid + 5% / per year)

danishh wrote: ↑ How sure are you on that number? A car insurance payout should not be INCREASING the longer you own a car, unless we're talking about cars that appreciate in value (eg collectible luxury cars). Normally replacement value is either determined by current market price of a similar car or some fixed formula, for example value paid - (MINUS) 5% a year.

Unless it's an STI, I don't see a 2010 Impreza with 120k selling for 20k, and if it is an STI I have no idea how you got it for just 15k in 2014.

Netixx wrote: ↑ That's why I'm debating between the two.. On one end, It's probably my last chance to get a really good price on a new car since my dad is gonna retire in a couple of years.. And I also put 5k (repair/maintenance) in my Impreza over the last 4year so I'm hesitant to get a used car..

On the other end, there's the lost value of a new car.. :/

Chickinvic wrote: ↑ Buy a car that is a few years old. Have it inspected by a mechanic before buying (I used Car Inspected in Montreal area). You will pay so much more for a new vehicle and the depreciation is expensive. The odds of needing anywhere NEAR the repairs on a good quality used vehicle that you will pay in cost differential to get a new car are astronomical. I bought a used 2013 Subaru Crosstrek in fall of 2016 with only 43,000km on it. It is the Limited edition (fully loaded top of the line model). I paid only $18K for it used. It has had zero repair issues whatsoever. None. Buying this car loaded like that brand new would have easily cost me an extra $20K more than I spent. How likely do you think it is to need $20K in repairs?

Netixx wrote: ↑ I had that option from my insurance :

Protect it against depreciation for up to 5 years.

In the event of a total loss, based on the option you choose, you’ll receive the equivalent of:

- The price you paid for your vehicle, increased by an annual percentage (For me it was 5%/year for 5 year)

danishh wrote: ↑ seems odd to me but a quick google search says Desjardins does it.
I'm curious to hear what the premium was on your insurance for this. Obviously, because you totaled your car, it paid off for you, but I'd imagine for most people it could be quite expensive.