Car financing
 

Hi there, first post so please be gentle :)

The wife and I are on the rocky road to Canada and I'm trying to get everything in order before we especially the finances.

I'm trying to calculate how much we can spend on a house and other items ( got to have that big screen TV!!).

One of the areas which is definately improved in Canada is the prices of car finance compared to the UK. Mazda and Ford both offer 0% over 5 years!!

Now this seems like a good deal to me ( espicailly considering how well second hand prices seem to hold up). Has anyone got experience getting these rates or are they ficticious? My wife is Canadian and has some kind of reasonable credit history so I hope that helps.

Finally, has anyone managed to get these rates on second hand vehicles bought from Ford or Mazda?

Thanks for the help!!

Re: Car financing
 

Yes, but... if they're anything like one manufacturer I know of, they'll offer very low finance rates but give the dealer a $1000+ rebate if they sell a car for cash, which you could potentially negotiate into a price discount. So effectively the interest has already been included in the price of the car.

Re: Car financing
 

The rates are real, but probably only for those with established good recent credit records here, so a lot is going to depend on how credit worthy your wife is. On the other hand the big domestic makers (and Mazda are owned by ford) are so desperate to make a sale they might be able to swing it for you anyway.

Used car rates are more like 8%, and are generally not financed by the auto makers themselves but through a third party. As a newby years ago the best I could do was lease a new Jeep with a large security deposit and a rate of 9%...not that I cared as it still seemed cheap at the time (but not now with hindsight)

If buying new its well worth paying a nominal amount to find out what the dealer invoice prices are and driving a hard bargain...there are plenty of other car makers out there ready to cut a deal... if you dont like what they are offering, dont be afraid to walk away, that tends to focus their attention:)

Re: Car financing
 

We got 0% finance on our mistibushi plus some freebies thrown in plus a tinsy bit off and a $1000 gift card. We got a 3 yr deal on a work permit which wasn't quite that!!

However we were told we would pay more like 8% on secondhad cars by a number of places.

Gryphea

Re: Car financing
 

Hi,

I am still here in the Uk and heading out to Clagary in March. Have manged to order my new car a Ford Escape from a Ford Dealers in Calgary. The credit checks are done with your permission with Ford UK so assume other large manufactures like Mazda (owned by Ford) can do the same. My credit check was approved almost immediately via the UK. $1000 deposit for the car and got discount and a great interest rate think 2-3%. They could not be more helpful and it was easy. My friend moved out last Saturday and ordered a car as well. He arrived into Calgary around 10pm and the sales man brought his new car to the airport to save him hiring one or having to get a taxi the next day. Car dealers in the UK take note. Real customer service.

Hope this helps.

Rob

Re: Car financing
 

It's also worth noting that you may have to pay tax on a used car if it's ex-lease, since the lease-holder only paid tax on their payments, not the full cost of the car; something I hadn't realised until recently.

Re: Car financing
 

In Ontario at least you have to pay both GST and PST on all used vehicles if you by from a dealer. Over the life of a vehicle the government can actually collect more than the whole value of the vehicle in tax if its sold several times.

Private sales are PST only, they collect it based on the bluebook value when you register it, so there is no avoiding it:(

Re: Car financing
 

We got a 3% rate on $5k after putting $20k down cash. that was straight off the plane, but we did have our equifax report and my job id/SIN/health card etc for ID and proof of residency, so this helped with the application, as well of course as putting down most of the money.

Re: Car financing
 

We leased a Ford Escape at about 3% over 3 years. We could have got a 0% purchase rate over 5 years with Ford and a couple of other brands but cos our work permits are only 3 years they said we couldn't get it. Leasing worked for us - just $3000 downpayment, circa $400/month payments, and option to buy at known price at the end, or to lease another car. GST is spread out over life of lease, and then on final payment price. It seems to work out better than a regular finance deal - in either case it's the finance co. which owns the car until the end, not you. We were newbies to Canada (4 months in) but had bought a house here and had our UK credit reports from Equifax. Ford were very keen to have us.

Re: Car financing
 

That's close on $20,000 over three years and you don't own the vehicle, plus paying interest in tax?

Re: Car financing
 

We got 0% Financing from a Ford dealer on a new Escape as soon as we got here. No probelms with credit check at all. Most difficult thing here has been getting a sensible credit card as at first we had to put $5000 in an investment just to allow for a $5000 credit card. However after a couple of months the threat of us taking our debt elsewhere convinced the bank to waive the investment and increase the limit to $10000.

Actually that reminds me of another point I should have put in my 'email to a friend' post, I was having to pay off the credit card every week or so to start with because of that tiny limit and it being the main method of payment!

Re: Car financing
 

Actually $400 x 36 months is $14400. We've already paid $3000 dollars down, and can buy the car at the end of the lease for about $17000. The car is worth about $34000 new so that's sounds about right to me. We don't own the car now, but we can definitely purchase it at the end of the 36 months. We could have bought the car outright, but this way we get to keep a lot of our cash whilst we are setting ourselves up with furniture, appliances, deposits, mortgage etc. My point was that even if we had purchased the car we still wouldn't have owned it until the end of the 3 years - the finance co. would be owners until then. And the payments over 3 years under a finance deal would have been almost $1000/month. Lease works for us, but I can understand it's not for everyone, esp. if you don't have the cash to purchase the vehicle at the end of the term.

Re: Car financing
 

Sorry to be pedantic, but $400 x 36 is $14,400 as you say +$3000 down is $17,400.

Re: Car financing
 

Yes, so total cost of car over 3 years is circa $34,400, and price of new car bought outright today is about $34,000, so the lease costs us about $400. Not a bad deal I think.

Re: Car financing
 

The other benefit of course to car leasing over 36 months or less is that you can give the car back to the dealer before it's warranty expires and it starts falling to bits. (Assuming it's a North American built vehicle). I can't imagine exercising the purchase option on my Jeep at any price!;)