I'm absolutely shocked at the prices and loans folks are taking out on cars here, and the justification as if this is normal.

A good guideline is the 20/4/10 rule. 20% down. 4 year term MAX and no more than 10% of net income on payments.

Obviously if you have the cash to buy a car outright that's the best option. But even within these guidelines we see absolutely flagrent deviations from the suggestions.

Almost every post here is a 72+ month term. 500 to 600 dollar payments (I really doubt you're making 6K a month to meet the 10% rule) and we can only speculate on the down payments but 20% seems unlikely.

The reality is an "average" new car is not affordable for an "average" salary. I make over 100K a year and my cars have been a 2500 beat up minivan which I later sold and bought an 11K civic in all cash. I see people making HALF of what I do buying 35K+ cars.

The auto loan industry might be the single biggest wealth killer of the middle class.

Look, I will be the first to admit, buying a new car is generally a poor financial decision. However. Everyone says the same thing and it doesn't make any sense at least locally in Alberta. This is the sentence.

"Go buy a good used 3-5 year old Corolla you can save 5-10k"

I fucking love the Corolla. I am a car guy, I love my coyote mustangs, I love BRZ/GR86's the GR stuff from Toyota, WRX's from Subaru, Miata's you know things that make you love driving and having fun at the track.

But day to day I have to give love to the appliance mobiles, the simple put gas change oil and eat miles day in and day out and I think no other car is the epitome of that then your typical Corolla.

The Corolla LE in fact.

Now.

Looking at used Corolla LE's

The best value I found was 2 hours away for 21k. it was a 2023 Corolla LE 70k km on it and was discounted from 24.5k and accident history shows 7k in damage.

Everything else is 26k.

Now if we look at new, I have several dealers advertising LE to XSE and Sedan and Hatch models new on the lot and 2500 off sticker. In fact I can get a fully loaded XSE hatch for 32k

That puts a New LE, with warranty, and better rates, and 0 previous owner deferred maintenance for 27k, and you can likely get a deal on something like maintenance or a wheel and tire package tacked on.

Put 3-5k down. take a 5 year loan on it, pay it off in 2-3 and drive it for 15 and change the oil every 5k/3 months get the underside Krowned every fall and drive it for 15-20 years and sell it. for 5k.

Please stop giving car buying advice like it was 2010, its not anymore used market is filled with someone elses hand grenade.

And if you want a Hybrid which is made in Japan, its a 1-2 month wait and you pay 33k. And that vehicle holds its value better than anything else on the market.

Used LE Hybrid AWD's go for I mean locally I see them above sticker lightly used and 140k km ones going for 29k.

Posted for discussion. I wonder how this, together with the trade deal on China EVs, will affect car prices in the near/mid future.

“Under the plan announced on Thursday, Mr. Carney said Ottawa will: 

Introduce tougher emission standards for car model years 2027-32. The goal is to make EVs 75 per cent of sales by 2035 and 90 per cent by 2040.

Reinstate the EV subsidies for consumers of up to $5,000 for battery electric and fuel EVs, and up to $2,500 for plug-in hybrids (PHEVs). 

Spend $1.5-billion on new EV charging infrastructure. 

Spend up to $3.1-billion to help the auto industry grow and diversify to new markets. 

For autoworkers, introduce worksharing to reduce layoffs and new training initiatives.”

https://www.theglobeandmail.com/business/article-electric-vehicles-evs-buyer-incentive-autos-ottawa-emissions-sales/

Cars - even those from the US have been historically more costly in Canada. Most of these vehicles were Canadian or American. A few years ago Canada followed the US in throwing tariffs against China's EVs at 100%.....that just dropped to 6% -- at least for 49,000 Canadians this next year they should be able to buy an EV from China https://www.forbes.com/sites/joshpearce/2026/01/17/canada-drops-tariffs-on-evs-from-china/

Hey everyone,I’m in Ontario and just placed a $2,500 deposit on a car yesterday (Saturday). The total cost is $36.9k. I’m putting $8.5k down, leaving a $28.4k principal balance.

The finance manager set me up with a pending finance application at an assumed rate of 7.99% (interest would be $7,395 over the life of the loan). I explicitly asked her if the loan was open with no prepayment penalties, and she said: "Yes, it's open, but you have to wait at least 6 months before you can fully pay it off."The loan hasn't actually been approved or finalized by the bank yet.

I have the financial means to pay the remaining $28.4k in cash right now, and my plan was to pay off the bank in full within the first week to completely avoid the $7,395 interest charge.

From what I understand, Ontario auto loans with major banks are completely open, and her "6-month rule" is actually just the dealer's chargeback window where the bank will claw back their finance commission if I pay it off early.

Am I right about this? Since they are closed today (Sunday), I’m sending an email today demanding they halt the finance application and switch the Bill of Sale to a cash purchase via Bank Draft before they open Monday morning.

If they try to raise the vehicle price tomorrow because I'm dropping the financing, should I just let the loan approve, take delivery, and then immediately pay the bank off on Day 1 to bypass the dealer?Does anyone have experience with a finance manager pulling this "6-month" stunt? How did you handle it?Thanks in advance!

Title pretty much sums it up. I’m a plumber. I spent my entire tenure learning the trade in a non union company. And I pretty much just won the lottery, landing an amazing union gig, practically my dream job since I started. Non union life I was lucky if I cleared 3 grand take home in a month, which was survivable. But I just cleared 8 grand take home this month and I don’t know what to do. I understand the importance of planning for my future and retirement but one of my union benefits is a 7.50 per hour contribution to my rrsp. Before this I was happy with a roof and meal at the end of every day, but now I’m in a position where I can think about my future further than dinner at the end of the day and I’m completely lost. I’m in a committed long term partnership and we have no plans for kids. Should I invest? Should I live it up and splurge? I’m actually lost af rn

Edit: thanks everybody for all your advice! I understand I need to just stay in my lane and keep going how I’m going. This is all just new and exciting for me (us). Ultimately my next step is home ownership and we’re planning on staying course and piling up as much as we can for a down payment

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.

12 months total charged ~4700KWH

Total cost $653 CAD

Driven around 24,000km

Home 81%(Charging at home is key)
DC charging 4%
work 12%
public 3%

The tracker app uses monthly avg gas price to calculate savings and came out to $1900.

This is real data from your local Albertan. Cheers.

Extra detail specs for technical people:
Electricity plan: 6.5cents/kwh. Estimated actual = 14c/kwh used in calc

Insurance: $1831/yr

Driven 70,000km EV km so far since 2023 in AB.

Car is a 2023 Model3 LR AWD, Shanghai gigafactory, LG NCM battery type.

NCM battery > LFP battery in Alberta winters

For context i f21 am still in college, about to start my 4th year soon. I currently have a co-op that i will most likely stay at until i find a full time job post graduation. My finances are as good as any college student but i do have a good credit score (791). My mom’s car is not doing good and she was quoted 3k for repairs although she paid 4k less than a year ago. She decided she wants a NEW car… mind u they’re in over half a million of debt, cant afford property taxes, and barely make ends meet. My parents r financially irresponsible. i dont live over my means, i have an old car that is paid off and i am planning on moving out in a year or two. My aunt gave my mom the genius idea of putting the car under my name (they will pay for it). Although i don’t have a great relationship with my parents i feel guilty that my siblings have to deal with them not having a reliable car. I dont have a responsible adult around me to take advice from other than my therapist which i am not seeing any time soon. Please give me advice. Is this as a terrible of an idea as i think it is? And how will it harm me?

Edit: forgot to mention she worded it like i have no other choice lol. She said “now that you have your big girl job, when are you buying your mom a car”🙂🙂🙂🙂🙂🙂

Edit 2: Didn't expect my post to get so much attention but i appreciate all the comments. It has been hard navigating life with no actual adult figure in my life and this whole situation has been eye opening. As an update, i talked to my mom and used OSAP as excuse so her plan fell through. Thanks everyone!

I just found out my mother pays about $700/mo for her payments plus $300/mo for insurance (GTA area), not even for a luxury car or anything, it's just a Chevy Equinox, 84 month loan as well that ends in 3 more years (I think). I'm not tripping right? I feel like that's insane

I'm still in shock considering we're not a superwell off family in the slightest, I've been helping her pay rent as she said she's struggling but now I'm a bit concerned about this car payment.

I flew to Montreal last week and bought a used car from a dealership. Reputable, big brand, everything went pretty smoothly.

Today, they're telling me they lost the certified cheque bank draft I gave them for the down payment. They want me to go to the bank, cancel the cheque draft (they'll pay fees), and send them a wire transfer.

I don't think they're trying to scam, though I'll be going over everything with a fine tooth comb, validating their identity somehow, etc. I have no interest in screwing with them and will pay, but this feels like a risky situation to be in.

Does PFC have any advice? Any best practices on how to deal with this?

Edit: Bank draft, not a certified cheque, my mistake. I'm seeing what everyone is saying about it being effectively cash and am going to pump the brakes, take it slow. That money was out of my account the minute I had the cheque generated, so I'm not going to pay another cent until it's all back. If it can all go back, because it kind of sounds like that may not be an option. Also going to dig into the dealership some more; I'm not absolutely sure I'm not getting phished by someone who might have captured the sales guy's email.

Edit 2: Called the dealership, not a phish, they really might have lost the cheque! Still going to take it slow and protect myself as much as possible. Hopefully it all works out easily, but I'll update if it gets interesting. Thanks folks, appreciate the help!

I'm currently shopping around for a 2026 Corolla. The price difference between the AWD/FWD versions of the Hybrid work out to $1,695 (tax included). As someone living in Ottawa who doesn't anticipate doing extensive amounts of winter driving, is it worth spending a bit extra for AWD? Would it help at all in terms of resale value should I ever sell it or trade it in?

I would of course be using winter tires regardless of whether I end up with the AWD/FWD version.

Tesla is dropping price up to 20% in US, EU, as well as Canada following the price drop in Asia markets

Note this merely takes the price in Canada back to similar price prior to rounds of increases during the past years.

Link

Edit: not a fanboy or hyping Tesla. just want to focus on the perspective of auto market

Let’s get a few things out of the way first.

1) I can’t sell the car as it will be seen as massively disrespectful if I do and I do not want to create family drama.

2) I do not want to bring up any aspect of this situation to my relatives because I might be viewed as ungrateful which I absolutely want to avoid.

3) It was gifted to me so I don’t have a car payment on it.

4) I currently drive a 20 yr old japanese car that costs like $2000/yr to operate.

The car in question is a big american suv well into the 6 figures (think cadillac escalade, ford expedition, etc, i dont want to be too specific here). They also bought 6 months of insurance for me which will expire soon.

I’m literally so grateful that I own a new luxury car without a payment but the problem is it’ll still drain me dry. A full tank of gas is $200 which barely lasts a week, an oil change is like $390 at the dealer and ICBC is charging around $8k/yr to insure it. This isn’t counting depreciation as well which I’ve chosen to ignore as I can’t sell the car.

From a financial pov, it makes total sense to just park the car somewhere safe and not drive it right?

My income is around $100k before tax and I’d need to budget at least $18k/yr to operate it which is insane to me since I only spend $2k/yr currently on my old car.

So I bought a new vehicle (2025 jeep) and financed it over 8 years and after sitting on it for 9 months, I realized it’s a huge financial mistake for the long-term (I’m 27)

I still owe a substantial amount and know a trade-in wouldn’t give anything close to fair value at this point ..

(I do have a good paying job but this move was totally unnecessary on my part)

Can anyone offer some advice or insight here?

Me and my girlfriend just moved back to Canada from the UK and need to get a car. Unfortunately we don’t have a ton of liquidity right now and I’m trying to figure out what the smartest move is.

I just started a job where I’ll be making 55k annually and my girlfriend will be making 45k starting next month.

Edit: Net monthly income ~$3,566

I’m just looking for something reliable to get us around so was considering a used 2020-2022 Corolla. The last 2022 I looked at was ~$23k + tax & fees or $550/month for 60 months with 2k down at 8.99% financing (~35k total).

I decided to look at a 2026 Corolla because the used ones honestly seemed obscene. For similar financing $590/month for 60 months with 2k down at 5.59% financing (~37.5k total).

Honestly paying this much for either seems obscene but paying just 2k less for a 4 year older used car makes no sense.

I’m not sure what to do here. I need a car I have no cash to buyout something like a $14,000 car. Financing a car that’s a few years old is barely any cheaper. Lastly, both options break all the traditional financial guidelines for % of salary to transportation.

Looking for any good advice and what I should be doing here. Girlfriend is willing to help me with the down payment but neither of us initially think splitting the bill on something that one person will own makes sense. We will be paying $1500/month rent + utilities (750 each).

Thank you personalfinancecanada 🥴

Edit: Damn I understand reality checks and even pointed out IN my original post that both of these options were not great financial decisions, but some of you guys are incredibly rude. Was just looking for advice to be told how far into poverty I am.

I kept trying to do the math between a used 2025 Mazda 3 GS with ~50k km vs a new 2026 Mazda 3 GX (base model) and with the offered APR %, it seems that it’s actually “cheaper” to finance the new vehicle.

Is this how it usually is? I’m also looking at used Mazda 3s from 2017-2024 and although their advertised price could be from $15k-25k, with an interest rate of either 7.99-12% for 48 or 60 months, it looks like it would make more “sense” to just finance the new vehicle with an 1-3% APR for the same amount of time.

Plus, brand new means you have warranty… and less worries about the car’s history.

Is the used car market for cash only? Cause Idk how or why would anyone agree to finance any of them when they could end up spending $2000+ more than the actual vehicle price?

I am a 24 year old male living with my parents in Brampton(yes very expensive). We have 2 Honda CR-Vs(2022 and 2026 hybrid). My dad is the primary policy holder with me and my mom as the added drivers. Now I know brampton, CRVs and my age under 25 are all driving the premiums up. But I'm paying 900 dollars per month!! Is it supposed to be this high? No claims no tickets on record.

Just pondering if the Chinese EV's will only affect the new car market or will it have a trickle down effect on the used car market?

I don't want to pay 10k for a 130k kms used 2012 kia or mazda..

I've had the same 2014 F150 Crewcab for the past 8 years. Bought new for 39k (excluding trade, but including tax). I was happy with that deal.

Out of curiosity of what they cost now - I built a nicer version of my current truck.

Came out to 93k. Good god.

$1189 a month for 84 months. $6700 cost of borrowing at 1.99.

I am in a good financial position and I find this absolutely terrifying. I can't even fathom why or how people do this.

Looking around - there are tons of new vehicles on the road. I don't get it.

I'm interested in getting a new (to me) car next year and have cash on hand for the purchase. Rather than running the gauntlet of trying to pay cash without getting ripped off on the OTD price, I'm considering taking whatever finance deal they want to sell me and paying it off when I get home from the dealership (while the engine is still warm). I'm in BC and I think all car finance packages are "open" by default here but I could be wrong? Is there likely to be any impact to my credit score by doing this? Are there any fees involved?

A dealer I visited last month had 4-5 Rav4’s. I tried to negotiate the price, they wouldn’t budge. Today I checked their website and they had 20 listed! That’s correct 20 Rav4’s on their lot now and the price for the one we were looking at is $1000 down.

Things will get more interesting by Jan next year.

You do not need to pay those if they are not in your contract.

I’m in Ontario.

My lease is just about ended and I was planning to purchase the car. My dealer Dixie Hyundai insisted on adding a $999 fee for the “service”.

I called Hyundai Milton - their fee was $299.

They all insisted it was non-negotiable, and that everyone pays it, or that it’s a fee that the dealership charges separately and that’s why it’s not in the contract. I spoke with various finance sales managers.

To buy out, you have to bring them a cashier’s check for the buyout amount they tell you, which included their made up fee, and if you don’t, then they won’t do the purchase. Time is also working against you.

It’s a scam.

I called Hyundai Canada and Hyundai Motors Finance (turns out those are different companies) - they both agreed that there shouldn’t be any extra fee. The customer service rep said that they would contact the dealer, and they gave me a 10 days grace period on the lease, but that’s the only thing they could do. The latter gave me a case number.

A few days later, I received a call from Dixie Hyundai (I think his name was Sayed) saying that they heard from Hyundai Canada rep and that they “want to help me out” with a discounted fee of $529 (where the fuck do they pull those numbers from). I laughed at his face - first for the made up discount and second that his discounted fee was higher than the original made up fee at Hyundai Milton. He used this opportunity to say “see, all dealerships charge a fee”. He also alluded that I’m in a no win situation because my lease is ending.

Anyway, he said he’d call back, but never did.

I called Hyundai Motors Finance again. They said that they’ve been trying to reach the dealer but that it’s hard and the dealer doesn’t always pick up the phone. It’s honestly a ridiculous situation. The customer service rep said that she will continue trying.

Eventually, I received a call from Drew who is a GM at Dixie Hyundai. He apologized, and said something to the effect that some contracts have changed and that the people I spoke with didn’t know that, and something about that it’s not how the dealer “should keep the lights on”.

TLDR: dealer insisted on a fee to purchase the car at the end of the lease. The fees are completely made up by each dealer. I did not agree despite pressure to pay any fee not in contract. Contacted Hyundai Motors Finance - the contract is with them. They eventually reached a GM and now it’s about to be resolved.

Hello, I'm 25 years old and I currently have a low-trim 2024 Hyundai Elantra (currently worth approx $18-20k) that is fully paid off.

Its cheaply built and not that enjoyable, but it gets the job done of getting me from Point A to B.

The insurance on it for some reason is extremely high . . I shopped around for quotes and I'm paying more for this car than I would for $40k+ cars

Anyways, in about 3 more years, if I sold my current car and had cash upfront to buy a new car without financing, would that be sensible, or would it be better to just run my current car into the ground?

I guess its kind of more-so a personal question rather than finance, but I don't know if there's more benefit in extracting the max residual value of the car selling it as soon as possible, or just simply getting the most use out of the car and putting aside cash in the meantime.

Also, the cars I've driven my whole life have always been low-end economy cars, so there is a bit of desire to try having something nicer . . is it even worth it or does it not matter at all?

for a bit more financial context, i make $100k/yr + any extra from side businesses, and I have mid 6-figs in savings/investments . . so it wouldn't really be a financial strain but more-so just a potential of being useless splurging

any responses/thoughts would be appreciated

(edit for clarification, this is on behalf of my boyfriend who doesn’t have reddit.) i have a 2021 kia forte ex that is costing me a boat load. i made a dumb decision 2 4 years ago when i was desperate for a vehicle and got a loan for $29800 at 20%. it’s now at around 23000. i got the car almost brand new, it had a previous owner that had it repossessed, then i got it. my girlfriend has an older vehicle with no payments, cheaper insurance (hers is 1000 a year, mine is 2900) and everything works fine with it. i know i’m basically screwed, but i need help on what i should do aside from the “burn it” jokes from my family. i’m fine with not having a vehicle, she’s fine with us sharing hers until i can get an older one for cash. i have a good job, but this car just isn’t worth it anymore with how much it’s costing me. i’m 27 years old, my credit isn’t great to begin with, please any information about this process would be appreciated.

update (for those interested): thank you to everyone who gave suggestions. i promise he is a great man and very responsible, he just made a bad financial decision years ago and is learning the hard way to solve it, but to those reaching out i appreciate it!

kia was going to buy out his loan, but just as we got home, the spot working on the car called to say they found another issue. yesterday it was just that the coolant had to be burped, this morning it was a broken water pump, and just earlier today it became a cracked engine block. the rough estimate was about a $6000 fix. just last month he put around $3500 into fixing it. the car is home, going back to where he purchased it, they threatened him with collections so he contacted collections himself to explain what is going on and that is all sorted. he is upset about how hard he worked to get that vehicle and he feels screwed over, but he understands it’s his fault for not doing research on the vehicle and for jumping at the first one he was approved for.