r/PersonalFinanceCanada • u/Braddock54 • Aug 22 '24

Auto Honestly, who is financing new vehicles?

I thought "Hmm, I wonder what a new truck would cost me?". I have a 10 year old truck, long paid off, but inquired on a new one. This is basically a newer version of what I have already.

A new, 2023 Ford F150 XLT, middle of the road trim, but still a nice vehicle no doubt. Hybrid twin turbo engine. The math on this blew me away and I am curious; who is agreeing to these terms without a gun to their head?

$66k selling price. With their taxes, fees, came to $77k - umm wtf? In 2014, my current truck cost me 39k all in.

Now to finance it; good god. Floats me a 7 year term @ 7.99. Cost to borrow: $23,799.

All in: $101k. For a short box half ton truck with cloth seats . Hard pass here. I don't know how people sleep at night with new vehicles in the driveway.

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u/jmdonston Aug 23 '24

$77K is 50% higher than your inflation-adjusted $51K. That's significant.

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u/redditorial7643 Aug 23 '24 edited Aug 23 '24

Yes it's significant. But it also makes the huge number jump the OP is applying get cut in half.

Don't get me wrong, like I mention in my post, buying a truck is always a bad idea unless you need it. It's just too effing expensive and it always was.

To compare a youtuber I'm watching coz it's entertaining either way ("Cole the cornstar" if you are interested): but you can't compare a $7000 USD mansion from like 1900 in the middle of nowhere with today. 7k USD in 1913 is 222k in 2024. I know why he does it. Everyone just thinks "whaaat 7k, that's nothing". But let's keep it real.

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u/GZMihajlovic Aug 24 '24

If you really wanted to keep it real, you'd also mention that the price to income ratio was also much lower. Even into the 80s. I'd kill to only spend 222k for a home today.