snowshoveller

I've often wondered why this is so, in comparison to how cars depreciate in the UK particularly bearing in mind how cheap new cars are,

I suspect it is the UK that is out of step but i'm not sure.

My 10 year old jeep cost me $5k last summer, I wouldn't have paid more than a thousand pounds in the UK and it wouldnt have been half so rusty!

s

JonboyE

It is because people keep their cars longer. Not too many people are that bothered about having a shiny new bit of metal on the drive every couple of years.

If you expect a vehicle to last 15 years (and many do), then it has still got 5 years worth of value in it at ten years old.

snowshoveller

its a curious thing, it either means you get a new one or a pretty old one, theres little financialpoint getting a lightly used one - it just seems odd that this being the case the price of nearly new ones hasnt naturally dropped so that dealers are able to shift them

XCMTBer

Maybe it's because the Government takes sales tax every time a car is sold, even a private second hand deal! So whereas in the UK you could "wheel and deal" with cars changing hands more frequently, here you need a compelling event to make you trade and i think the double/triple and quadruple dipping by the tax man makes you think twice.

Aviator

Not quite that simple. There is no GST on private used car sales, some provinces collect PST on private sales. If a car is traded in to a dealer the tax paid is only on the difference between the trade in value and the new car. The person who buys the used vehicle pays tax, again if they trade they only pay on the difference.

High used values are a good thing, why on earth would anyone want vehicles to depreciate rapidly, everyone loses. On my new truck I figure I lost 25% just driving off the lot, not an inconsiderable amount. I have a 15 old beater I use for the airport and the resale value has not changed much in the last 5 years. I guess sooner or later it'll give up the ghost, but it owes me nothing.

Auld Yin

I've always found that Brits have a thing about "what car do you drive" whereas Canadians don't really care and do keep their cars longer. I imagine part of the reason for the Brits' passion for cars is that the working man came into the car world much later than his counterpart in North America. As a previous poster said, this reflects in the price of used cars as there are less available. Used car dealers cannot get enough autos to satisfy the demand so I suppose the law of supply and demand kicks in. I personally doubt that the tax situation really has a significant influence in the matter.

dboy

Look at this way. If you sell, you will get more for it than you would in the UK

snowshoveller

folks who prefer not to buy new cars would appreciate the depreciation. I quite like to buy older cars run them for a bit and swap them. Usually something at bit more interesting than a hyundai or whatever, just cos i like a change. In the uk you can do it with precious little investment - 1k tops, but in canada its more of an investment, and so less fun, it just amazes me how much canadians will pay for an old beater.

Novocastrian

What Auld Yin said^^. A car is a car is a car. Who cares about the suckers? As long as they don't break, they're all the same to me.

XCMTBer

I know its not that simple, but a contributing factor, if you take for example the POS ford focus I bought as a panic buy on landing for lets say $6k, I paid the tax on that of $480, so real cost to me was obviously $6480. Now 6 months and 5,000km later I'm sure the fact that if I tried to sell the car I would be taking the $6480 into account and not the 6k when working out where to price the car to sell and the buyer would also be adding the PST onto the asking price, hence used cars look expensive.....

and yes no one really care what you drive....i know a few people driving clapped out blazers in the winter with huge amounts in the bank! There seems to be no relation between status/bank balance and the wheels you drive in this part of Canada.

Mike Gas

Belief me there is no shortage of used cars in Canada

dakota44

When you trade in a vehicle, you get a credit (based on current trade value applied) for the tax paid. Based on 8% Provincial plus 5% GST....a $10k trade allowance results in a tax credit against the purchase price of your current vehicle purchase of $1,300. So there is not really double dipping in that instance.

dakota44

With a 10 year old Jeep, I wish you luck. Worked for Chrysler for 17 years. Plan on spending money.

Piff Poff

We sold our rust free one for about half that and that's all we could get for it

We have found that if someone has spent money on the car in the past - new tyres or brakes or something then that price gets addedon to the resale. It is possible to pay reasonable prices but you have to really look to get a good deal - for every ten we look at we might offer on one.

dakota44

Missed this before I posted. Spot on.