Buying a car: Should you lease or finance?

year loans for cars and you know when you get into that kind of a situation you're going past when the warranty usually lasts you're going longer than that I'd like to introduce myself I'm David Coleman with CDC marketplace and we've been doing a story about car financing you may have lots of questions about car financing perhaps you're in an auto loan right now you want to know more you're about to buy a car what do you need to know well we've got the experts are actually here at the Toronto offices of car help Canada ready to take any questions that you have about auto financing about car loans long-term Carlin's gonna bring in Mohammed Bahama right now and he is here with the car help Canada ear too to be able to help us with all of our various questions including you know Mohammed when you look at the trend you know I remember when I was not all that long ago seeing three and four maybe five their loans but now we've shifted into something else well after the 2008 recession yeah big financial crises yeah leacy in practicum was dead I mean the GM Chrysler you know they went into bankruptcy they stopped leasing period so the industry you know they had to find another ways to sell cars and the only way they came up with it was the you know offering long term financing which makes you know monthly payments lot affordable yeah the problem with that is you're on the hook for seven eight years so you know if you have if you're not sure whether you're gonna keep your car for 78 years yeah then you might end up paid a huge price yeah and I know we talked to you when we did this story for a CBC marketplace we're happy to take any questions you have around particularly car financing but these are the guys to talk to about cars so maybe you've got other questions out there when we were talking about car financing one of the one of the big kind of risks is if you have a car on let's say a seven-year loan and a lot of people making cars without seven year loans right now if you're like a lot of people and you trade it in at year three you got yourself a problem a big time because now suddenly your car is worth a lot less than what you owe yeah and if you want to buy another car another new car with the dealership we do they were just rolling the difference the debt what we call negative equity they will into the price the new car then suddenly instead let's say take high-end a Rancho for example you can sell do you know if the car is worth fifteen in your new or another seven eight thousand dollars then the car suddenly you're buying oh you're always there in almost 40 grand yeah so if I mean for instance like you buy a $30,000 car you drive it off the law right away it loses some value absolutely but that loan is still for for you know could wear $30,000 exactly plus if there is interest plus there could be interesting that 0% exactly and and if you're if you get that kind of a situation they call it negative equity like where your loan is bigger than the value then the value of the car and a lot of people are encouraged just to roll in to roll in that you know negative equity into the price of the new car which means you know you just add up more debt more than yeah and at certain point it just becomes you know almost impossible to afford you know you have that car so so people really have to think hard have to be very careful because they could they decide whether they want to go long-term financing or not yeah I'm David Coleman with CBC marketplace and we're here talking about car loans card debts auto financing really anything to do with a car purchase because you know what these are the guys Mohammed Bahama here with me were in the Toronto offices of car Health Canada these are guys who help people buy cars that's really what you do as a business we help people buy cars but also we have people deal with their car problems including when people call us and they have huge negative equity what they should do yes we try to help well we tell people you know usually I try to convince people to keep the car yeah you know they keep the car and pay off more for the loan so it become easier now you know for example let's say you decide to train the week after two years I try to encourage them to keep the car initial year or cheers so Sally you know the difference is not as bad and you know I mean they can afford it and I have no additional two three years because you know the problem is a lot of people but and this is from our experience in the office a lot of people you know just want to change a car every tree for you because technology because you know cars they'll be nicer they're getting you know with a lot more options no oh I know how you know what I I like this car I want to change my car they don't think about the consequence yeah exactly here's a we got some questions we're happy to take all your questions Kerry's coming in you got a comment saying she I guess she's gone into the dealership she says I didn't know that their offer wasn't the end price I was surprised about the cost of adding insurance and warranty coverage after the offer and they said there's a difference oh let me explain to our viewers we got your question we'll help you do that in a second let me ask mister sure but how the process works yeah you go to a dealership buying a new car correct yeah then you know once you know it is adding the price of the vehicle know then they will take you to what we call the business office and that's where the real profits are that's really make your money absolutely so they try to sell you extend warranties insurance they try to sell you all kind of products right and those products usually the the profits are huge between three four hundred to five hundred percent so for example let's take a quiz I'm for us prove it no it cost him probably around three hundred bucks they will try to see Ritu for nine hundred dollars right so people have to decide what they want way before they go to the dealership they said what do you want if you don't want rustproofing decide what options do you want you know to go to deal to do at the dealership or you want to go outside and save some money yeah the extent same with extend warranty for example here in our office if people are leasing a car we tell them don't bother buy an extern warranty because it's don't need it if you're using the car for four years and the vehicle comes with a four year warranty why do you want to pay for the extent warranty I mean if you want to buy the car at the end of the of the list then yeah you can't question extend warranty after that but don't buy it because you're just paying more and more money and paying more profit to the dealership okay Ashley Williams is asking if I this is a question actually if I sign the papers for a new car and then after the deposit and everything if Ashley is remorseful can the contract be cancelled before taking delivery of the car even on the day of delivery can you can you cancel the whole dealer no you can't all right you see there is then that's another there you go actually sorry to say that but that's another myth your Ontario there is no cooling-off period yeah when you buy a car you sign the your name at the at the bar of the contract the car is yours that doesn't mean you can't get out of it but it's gonna cost you yeah so so really it's the same people I tell people look when you go to the dealership I know there's a lot of pressure on you to buy a car right there yeah but take your time if you're not sure tell them I want to go home and think about it I want to discuss with my wife on this you know my children with my family all right know that when you're 100% sure and you want that car then you'll go ahead and buy it okay yeah here's a question how do you get out of a lease after one and a half years into a four-year lease that's very difficult to yeah because you know you'll end up paying huge penalties unless you really you can go to some websites like one it's called least Buster's you can go there and try to see if somebody can take over the lease otherwise if you know break the lease you know after you didn't have definitely you'll get pay penalties and I'd be back yeah especially after the after one year when you're in here yes in defence it would be a lot higher compared to three years in the least so what's least Buster's that's something someone else looking to buy a used car but take over the lease and they are looking for people to take over that lease right okay I'm David common with CBC marketplace is Mohammad with Shama who's with car help Canada we're taking any questions you might have around buying a car could have to do with financing or leasing or anything you've got these are the guys to talk we're in their Toronto offices Danielle is asking I want to purchase a used vehicle and has been I've been looking to buy from private sellers what are the risks what are the benefits is huge from Frasor you have no protection yeah so if you can buy it and usually but you think you're gonna get a better deal with the private cell that's very true but sometimes you don't see you gotta be very very careful but there are three things that people should do in there buy new scars privately make sure that you're not dealing with the curb-sider what I mean curb-sider means it's a person who is in the business of selling buying cars without license okay and usually they sell junk how do you figure that out ah that's what I'm saying you get when you go me if somebody tells you I meet me in a parking lot or meet me in a donut shop then that's a red flag okay yeah but when you go and meet this person ask them to see your drive their driver license match it with the ownership of the car it's their car okay you make sure first it's not a curb-sider because as I said most precise I sell drunk this is a really bad car okay so that's one way to know that it's actually their car they're selling avoid the herbs are that's the second thing second thing make sure you insist on taking the car for an inspection yeah to your own mechanic make sure that the car is in good conditions that it hasn't been you know in a in a collision right number three make sure that you cast you ask for car proof yeah it's a report that gives you the history of the vehicle the tells you where there are any liens on it and also you know if the vehicle has been any accidents before right so is there there's someone else have a lease on this yeah somebody owes money on that car okay so take take a picture of their license or take a look at their license make sure it matches the owner for the car if you're buying privately number two take it for an inspection absolutely I'm number three as for as I said for a car proof and by law just the seller yes to provide you with with the report called you've it the used vehicle information package that's that you can pick up there any service Ontario okay office but can I is the buyer do that yeah you can you can okay but as I said the seller has to provide it a lot okay yeah okay Daniel I hope that answers your question if you got any more please just fire that question right and Daniel is asking what if there's no debt and just lease is there anything I need to consider no I mean if it's a lease and you don't want your money the only thing you know you decide that you want to keep the vehicle at the end of the lease or you wanna return it but the other thing is a lot of people you're dating because they miss the car they don't care you got to be very careful you have to maintain that car you have to keep it you know you have to get maintain it all the time make sure there are no scratches make sure the tires are at least you know we are at half 50% there otherwise when you return the vehicle you're going to be hit with a bill right because they're gonna want to replace the tires if you've left it down branches and stuff like that so make sure you keep your car clean make sure you take care of it other things we need to consider whether it's the lease as I said I mean just just make sure let me near the sound at the end if you decide to keep the vehicle make sure whether the original value is fair what do you do you go to auto trader or qgg and compare the price of the real value of that car with the prices offered on those sites and if it's a good price then I will buy it yeah but they're not gonna I mean a dealerships not gonna give you the value of that car relative to what you see on a auto trader they don't make merchants all right they gotta make money on it no but we're lease no they can't hold that okay with it's a real value that's what you pay you can mark it up okay that's the manufacturer that decides that okay whether you got a question on a lease or buying a car car financing problems with a car you've got right now Mohamed's your guy we've got his partner-in-crime here sherry Primack as well and so any questions you got please just fire them in and we'll get to them as quickly as possible Elaine's asking I bought a jeep that had a manufacturer's warranty on it but less than 20,000 kilometers on it the engine went dealership refused to pay because the previous owner did not keep up with basic maintenance and refused to fix it is there a way to avoid this for future purchases well that's what I'm saying you take the car phone inspection if you buy for many years yeah make sure they do tell them you're but you're considering buying this used car and please make you know I want you to do very detailed inspection sometimes you know when the when the garage knows that some vehicles have some issues for example the engines well they'll do what they call you know an oil test when they you know test the cylinders and see you know if the vehicle is burning oil if there are leaks if the vehicle is overheating then they will advise the person just stay away from that car marry 20,000 kilometres in that's what she drove it depends you know how many Colombians when she bought it I assume she bought it used yeah let's say she bought it looks like kilometers all right 120 but again as I said I mean she has to find out if if the vehicle you know I had came with next and warranty a lot of people don't know this because a lot of people extent weren't easily buying new cars so when they sell them they still have some extent warranties they should ask these questions if you're buying a car from from a previous owner and some do you have the here's a question from the grind collective what is the recommended length of a warranty to consider when purchasing a certified used vehicle from a well-established dealership recommended length of a warranty that in my opinion I mean it's important to buy an extended warranty after the fifth fourth fifth year and three years well okay so when do you buy it at the fourth or fifth year no if you part brand new car yeah then what I will buy the extended warranty just before the end of three years oh yeah because you can buy from the manufacturer okay before three years the entry years or before 60,000 kilometers you can buy any manufacturer any manufacturer oh I mean if you have let's say you buy a Toyota yeah and right before the end of two years or before 60,000 we can go walk into the dealership say I want to buy extend warranty Oriol and they will sell it to you okay now in this case this is a certified used vehicle recommended length of a warranty yeah that give you a certified gives you one year warranty okay well with the automatic from the manufacturer right then after that I mean it depends on the mileage on the vehicle it depends you know give me some give me some considerations here so what if the V call house let's say a few thousand kilometres on it fifty thousand then you know I mean I would wait till probably 55 56 then I go to the dealership and say look I want to buy an extended warranty and I want to buy another show three four years okay and there's there is another thing that people don't know you can negotiate the price the extended warranty lot people they can't yes you can because there is a fifty percent sometimes fifty percent margin okay so you all set prices no no you can negotiate all right Tiffany if buying cash can you negotiate with the dealer on a lower price absolutely you know of course you can use with your listen with your finance your painters you can negotiate price now here's look I think Tiffany's raising a good point here because you know a lot of the offers now are you see you're gonna get $3,000 cash back or you get this better interest rate but it's one or the other do you still have the same negotiating if you're buying cash because one of the manufacturers are making their money off the financing and not off the selling of the car no there also many factory also make make a lot of money on your cards oh yeah big time but it doesn't matter as I said whether you're financing or you're leasing or you're paying cash you can always negotiate the price of the car that's what we do a car helped Canada everyday we help our members we will tell them what first of all the incentives are let's say you're buying a Toyota Corolla Yeah right and the dealership is the manufacturers itself is offering you let's say two thousand dollars cash back and you want to buy cash you want to pay cash so you'll get to two thousand dollars plus you can get additional additional thousand dollars discount from the dealership oh absolutely we do that every day at the office that's a yeah that's a lot of less money oh absolutely so people can negotiate even when they're paying cash Ryan's got a good question and thanks Ryan for writing in saying I bought my first new car this year how important is it to have it serviced at the original dealer it's very important to serve said the origin dealer what it have to be original as long as it goes to dealership that represents that that brand yeah okay Feliz a few buy a Honda it doesn't as long as you go 200 dealership okay okay but it's very important to go back to the the dealership for service at least for the first two years because because you want to keep that good relationship if you have an issue later on they can help you deal with the manufacturers right so and a lot of time to manage would say well you have not been servicing the car at the dealership yeah so you know what but why does that matter it's not like you have to mean the warranty doesn't require you to to service it at a dealership no it does not but I'm saying it helps you because loves let's say you know the one the the vehicle comes with 100 thousand kilometer warranty yeah and let's say you have been serviced in it's somewhere else 100 let's say one hundred and two hundred two thousand kilometers the engine is gone you think the manufacturers say okay we're going to replace it for free absolutely not because you were not servicing the car at the dealership but if you were servicing at the dealership it's going to be an incentive I mean the man would say okay well you will be coming back to the dealership or service we're gonna help you out okay so you're this all the time like that's an interesting perspective but I guess here's what I'm thinking I go to the dealership I'm probably gonna pay more for service than I would at my private guy absolutely I mean because there's a lot of people are gonna be watching this and say you know what I'm gonna go to the dealership buy the car and then never see them again because they'll charge me too much money for servicing an absolute a lot of people think that way but as I said I always advise people at least for the first year first your cheers go back to the dealership besides you don't need a lot of service if you're spiritual or it needs all changes that's it you know maybe I rotate the tires yeah that's all you need so you're talking probably a hundred fifty change but now if the district tries to sell you to sell your other stuff just say no yeah no I don't need it your neck is asking is it better to buy new or used well it depends on your situation yeah if yeah I mean usually I recommend people to buy used do you recommend people because you know you save a lot of money remember as soon as a new car rocks at the dealership or being driven off the dealership it was around 10 15 % of the value already so after 2 years the car already lost you know probably around 35 40 percent minimum it depends of course on the making there are different values for different mix all right but still if I am you know if I am budgeting you know let's say 15 20 thousand dollars okay I will really look at buying a useful a good used cars gonna last him for another five years and save a lot of money let somebody else take care of the depreciation how long how old would you go on a used car I mean some people are gonna go with what they can afford and so they might be looking at five or six years old what would you suggest probably I would say between five to six years that's a really good that's a good twice to buy a used car because you don't want to buy an eighteen year old car then sadly against not be a lot of money for repairs now are we surprised to hear you not say sort of two or three no because you know what I we have experienced this many many times the first year or two you don't save a lot of money on you sports yeah and especially if you compare to buy a new car with all the fire the incentives sometimes makes better sense to buy a new car compared to one your old car right because it actually becomes almost the same price right miss Tebow is asking how likely is it to get 0% financing these days there are quite a few manufacturer offer you know 0% absolutely there's offers of them but people get them it's the clock oh yeah absolutely I mean the only thing is you sometimes they would offer you 0% or cash no and it's your choice now you really have to sit down and make a new calculations and see which weather which which is the better option you want to go with 0% or you want to take the cash and go to your bank and you know get the loan you is a dealer required to provide there's a question from mark Jennings is the D are required to provide winter tires at no cost require none many factors some manufacturers offering yeah winter tires as an incentive but it's not required and I think with the Salafi now they are offering ya at $750 for winter tires for does it all the time yeah so Travis is asking what about what are the positives of leasing it's low monthly payments and changing cars every three four years you know you get the you know the option to take to taste you know those new cars you know every three four years those are really as the main two things about leasing but people have to be very careful with the with the restrictions on leasing which is for example as I said if you get our Felice before cost you a huge there are penalties be careful with the mileage because you know they give you certain miles per year now if you go beyond that you have to pay penalties right and also you make sure you maintain the car you know what many facts tells you okay you know Travis you raised a good question about leasing and there's actually another guy in here I'm gonna bring up right now Sherri you come on up because he changes cars all the time by the nature of what he does but what do you think are some of the and I'll bring you right up here to see we got some light on you what do you think are the are the positives of leasing yeah I agree with many of the things that Mohammad mentioned the benefits are is that you get low monthly payments and you get a taste of a new car every few years it makes sense for people who who drive within the mileage restrictions and just like to be in a new car every few years however what most people need to understand is that the overall cost of leasing a car especially if you buy it out at the end of the lease ends up costing you more than if you were to finance it because at the end of a lease you have a residual value that you have to pay off yeah and dealerships don't finance that residual value you either have to take a bank loan or a line of credits without a higher interest rate so the overall costs of buying a car if you buy it out if it's Elyse is more expensive if you were to finance um how long is should you owned a new car before upgrading anything sherry there's a question from Dan Brooker it depends on the car not all cars are judged the same way certain cars have a good reputation for reliability and low cost of ownership such as Honda Toyota Subaru and others a car like that you can easily own for ten years even longer and it'll be a perfectly good car for you some cars don't have quite as good a reputation for reliability or they have reputation for being very costly to repair out of warranty cars like that I would probably keep for the warranty period not much beyond that a YouTube viewer was asking what are some of the best brands for used cars I think you sort of listed a lot of them off there Suzanne Bagon Dean is asking what brands of car have high resale values there's definitely some that stand out more than others I would say Subaru has very good resale value across-the-board Honda Toyota both have very good resale value as well even some other manufacturers now like Mazda have good resale value so there's quite a few and there's a pattern right most of those are Japanese because they have the good reputation for reliability and people know that they're not they're in expensive to repair out of warranty that's what keeps them expensive what are some vehicle brands that are not good for used definitely high-end luxury cars European EMW milks wagon od they depreciate the quickest that's partly because they're so expensive to buy initially then once they fall out of warranty the value just plummets on those cars for lower-cost cars domestic cars certainly like Chrysler General Motors for their resale values are not quite as strong as the Honda's Toyota's and Subarus Alireza Jessa is asking how important is 0% financing on a new car versus the used car rates because you won't get 0% on a used car that's right in fact the financing rates are one of the main attractions to why buying a new car can often be more advantageous than buying a used car because if you were to buy a used car you'd have to get financing on your own say through a bank and the interest rate can easily be four or five percent or even higher than that whereas if you buy a brand new car you do get the incentives of a low inch straight from the from the dealership so 0% is very common nowadays but the norm is definitely somewhere between zero and say 3% most new cars offer that and that does save you money and when you look at the balance between I mean there are so many different things to consider but if you're just looking at do you go and get a car the same car for 0% financing or do you go and get a 2 or 3 year old version of that car and pay a little less for the car but slightly higher on the interest if if you're looking at cars that are one or two years old I would stick with the brand-new car in most cases because a one or two year old car the savings are just not there you're gonna have to finance it on your own through a bank at a higher interest rate that's gonna add a few thousand dollars to the cost of the car and it just doesn't make sense when brand new cars have a lot of incentives so if you're looking if you're thinking that a 1 or 2 year old car is gonna save you a ton of money well you might want to look twice because new cars have really good incentives here's an interesting thing for a freckle on YouTube saying I like this don't let them sweet-talk you I did all my negotiations through email you hear absolute there's a lot of consumers who send emails to five six dealerships and let they let them compete yeah you know and you know some but you got to be very careful through emails there's a book can promise you the moon but once you get to the dealership then suddenly things start changing so you got to be really very very careful mm-hmm yeah I agree with that that's definitely becoming a modern trend that people email and do all their trends almost the entire transaction on the internet nowadays there's there's concerns with that like Mohamed mentioned but yeah it you have the dealerships competing for your business and that could end up saving you more money oh yes Ahmed is asking a great question here what what time of year should one go for a new car yeah that's a good question uh it used to be mm-hmm it used to be you know June July August yeah that because you know that's the end of the model year and a lot of many fairs you know offer huge incentives the problem with that is you have to be flexible because you might not get the color you want you might not get the options you want okay because they stopped producing for that year so you get whatever there is there that's it yeah now really in this day and age there is no there is no time because of lot of organizations like ours who help people buy cars so we know exactly what the price should be and you know the other and the consumers end up saving a lot of money regardless now the only thing is as I said if you are flexible you I would wait probably to maybe July and are those are the two best man when the dealership offering huge incentives in which ones July and August you are not they want to get rid of you know the inventory that's right because they want to bring in the new the new year okay so here we are in November July and August a long way away and about which way until the end of the month not necessarily waiting to the end of the month like Mohamed said the incentives the clear out events usually come out in the summertime the summer months and at the same time you're not only getting the best incentives at that time but you're also getting the best availability of inventory because the dealerships still have plenty of current model year cars available for you to choose from moving into the fall the month of November like we're and now by now most of the 27 teams have pretty much cleared out so you can't take advantage of the incentives anymore you have to buy a 2018 model year car that doesn't have them I'm David common with CBC marketplace we're here at the Toronto offices of car help Canada Muhammad was Shama is here with us as a Shari Primack we're taking your questions anything to do with buying a car whether it's financing or the cars in particular or leasing throw it out there we don't know the answer we won't know the answer but we're gonna try to answer your questions we got lots of them coming Ryan we've got yours Christian we got yours Dan broker's got another one Ryan we'll start with Mohammad are there benefits to purchasing a hybrid or electric car new at this point well it depends on your driving habits yeah if you do a lot of city driving I would say you do 70 80 % okay then yes I will definitely consider a hybrid and in my opinion the best hybrid out there is Toyota okay I mean one of the early ones with the Prius briefs or the Camry they make you know I mean the best really Hybrid now as far as the electric cars you got to sit down this outer it's worth the cost because they're really the cheapest one I think is what around thirty five forty thousand dollars that's right except for the leaf that's gonna come out the Nissan Leaf new one probably is gonna be priced a little bit cheaper the right now I think in my opinion the best electric cars there is is the GM bolt the bolt yes they're the volts I mean the what is is really it's what they call it it's not a pure electric it's got a gas engine exact it's hybrid yeah actually a plug-in hybrid that's what's called the bolt you know it probably has a range of around 340 350 350 kilometres yeah which is really good and the price setting is what around thirty five forty thousand cars right here yeah now that's you know that's diamonds they're an electric car that's the one I will do became it look yeah I agree with Mohammed the bolt is a very good choice as an electric car they do make sense for certain people I mean if you have a place to charge them you know that you're gonna be on driving routes where there is a place to charge and you have a garage to store its I mean it can save you a lot of money because you don't have to spend the money on the gas and less maintenance as well hybrids to hybrids make more and more sense nowadays because the price is coming down they're more comparable in price to conventional gas cards so if you're gonna save thirty forty percent on gas tubing most of city driving like conventions then why not consider the hybrid I would definitely consider it okay we go backing up with questions here so we'll just try to get through these quickly Christian is it better to finance or pay cash sorry if there's huge cash incentives I'd consider buying cash but if not it's more interest rates than finance then finance it okay Dan Brooker for used cars what are the benefits of buying from a dealer rather than private dealer you are protected yeah there are laws that protect you when you buy from a dealer when you buy privately there is no protection whatsoever and you have to be very careful you have to do your homework what if you what do you gonna save $1,000 yeah that's fine as long as you do your homework as long as you know that the car is very good car that the car has never been in a huge collision that the car doesn't have a lien on it remember you know I mean something they don't disclose that yeah and I know you've said in an answer to a previous question there are three things they want to do buying privately number one is check that check the person selling it make sure the registration yeah exactly make sure the registration of the vehicle is to that person look at their driver's license the second one was get the car proof on it make sure it hasn't had any accidents and the third was now forgotten and the Chinese get what they've called a car proof report card proof and what was it okay what's the report the tree you know inspection yeah by Andy oh and now the other thing is if you're buying from a dealer yeah especially you know if your man from used-car dealer and you want to know whether that dealer has a good reputation or has been charged before you can go to the on vick website they publish you know they are they publish this is you know I mean discipline yeah on dealers so you can see Ontario specific yeah yeah okay Dan Brooker that was Dan's question Jeff Cora daddy is asking and I'll throw this one to you sherry how much depreciation will highly modified four-by-fours and trucks bring they've been off-roading a lot or even smoked in probably pretty significant because not just for this type of car off-roading any car that gets highly modified or gets let's say abused because of the type of driving you do yeah that's gonna affect the value significantly because when people are buying a used car they want a car that's in the best condition possible they want to know that it was baby taking care of by the previous owner so yeah it's definitely gonna have an impact for sure and especially there if the vehicle has been modified might lose the warranty if I manufacture we do not allow you to modify anything in the car oh really you do that you lose the warranty warranty could be void okay here's a YouTube user asking what is the recommended of warranty to consider when purchasing a certified used vehicle from a well established dealership but as I said I would say probably around three years that's the average three years you know that's good and as they said again make sure you negotiate the price of the warranty mm-hmm you can save some money okay i'm david common with cbc marketplace we're here in the toronto offices of car health canada Mohammed with Shana Shari Primack are here with us we're taking your questions about buying cars car finance really anything to do with the whole car purchase process selling your car if you got those kind of things we're certainly happy to take them what are you know just help me understand because we see so many different interest rates that are out there now how do you know which one you're gonna get well if a dealership were manufacturers advertising and interest rates as long as you have good credits and you qualify there's no reason why you shouldn't get that interest rates I mean it's not a deception game here where they advertise 0% financing but everybody that walks in the dealership ends up getting three or four percent it's not really like that when it comes to interest rates as long as you have good credit here's a question from Ryan Shellington this is a good one is buying a car in the US and importing it worth it or just too much red tape well first of all is the dollar yeah you got a you know he's gonna cut or slightly better now yeah that's a city of paint 30% more yeah right number one number two you have to check whether you know many factory in Canada is gonna cover the warranty because a lot of money for here if you bring car from the state they will not cover the warranty how do they make that argument oh because you know you bite outside of the country that's it this is a used car we're talking about okay you know what it Ryan doesn't say yeah Ryan doesn't say but what if it's one year old car then then find out if the metaphase gonna cover the warranty or not yeah okay otherwise you're gonna have every time you go back to if you are inserting on tear you have to go to Buffalo or something like they make it so I mean here we are in Toronto they make it the the manufacturers make it very difficult I can't just go down to Buffalo and buy okay and not only that is American dealership they find out you're a Canadian they will not sell you a new car okay they won't I mean they might sell you I mean six one over car when your old car barn a brand new car so is that worth it is it worth it and all the red tape you got to go through if it's used I don't think it's worth it at the moment because the savings are just not there the only time I really hear people importing cars from the United States nowadays is if it's a very specialty car a very rare model that's very difficult to get here that's the only case Aleksandra stoick is asking what the best value for a minivan out there is grand caravan grand caravan absolutely and I mean a lot of people think it's that good it's a great van and the price is so cheap you know you can't buy it I mean you can buy minivan now for around twenty to twenty three thousand dollars and you can keep it for seven eight years yeah it's crazy like that absolutely all of its competitors are easily ten thousand dollars more more than that actually so really the Grand Caravan is at the best value for the money Paul Maurice is asking can you still negotiate if you get 0% interest can you negotiate on the price absolutely yes you can I mean the first thing you do don't ask about the the interest rates don't ask about the financing don't ask about the trading first thing is negotiate the price that's the first thing you do negotiate the price right then you tell them I have a trading and what's the interest rates and so forth because you want that you don't want to give them the opportunity you don't try you know to play you know tricks with you yeah I mean no just go there so I want to buy this car what's the best price once you this on the price then you you go on to the next step whatever they want to play that game I just walk away and walk out that's it and I mean just tell them look this is what I want what kind of price you want to charge me but make sure that the consumers already have some information before they go to the dealership yeah so for example what we do here in the office when somebody calls we tell them this is the pressure should be paid so when they go to these if they know exactly how much they're going to pay yeah that's it so now they can negotiate the other stuff wopo is asking do I really need the rust coat the optional extra on the bottom of the car well I mean it's pens on whether you're gonna keep the car long-term or not I mean if it's a car you know you're only gonna keep for a few years then no you probably don't need to do it if you know you're gonna keep it for the long haul like 10 years or more then yeah it's definitely good maintenance to do you can do it every couple of years you don't have to take it to the dealership you can take it to a third third party company there's many out there such as Crown such as rust check doesn't cost a lot of money and it's good peace of mind because the car will be safer because you're maintaining the structural integrity of the car and it's gonna look a lot better cosmetically not having rust do you know if it helps from the resale value okay that's victime yep do you think it matters Mohammad where you live because you know in western Canada they're not using salt on the roads yes it matters where you live there's no question about it if you live in East Iran in eastern Canada or and the Atlantic provinces I would definitely use the rust proofing every couple years as a sherry said I will go to crown it cost around one hundred twenty and twenty-five dollars do it every year every other year and you'd be fine Alex we've got your question but Tina came in first Tina's asking what's the best small car to buy there's quite a few an independent dependent on small cars yeah I mean there are subcompact cars like the Honda Fit the Toyota Yaris the Kia Rio which I just finished test driving a very nice car all affordable great features good value for the money and longevity excellent longevity on all of them if you want something a little bit bigger but still considered a compact car I mean there's the Honda Civic there's the Toyota Corolla the Mazda 3 the Chevrolet Cruze the Hyundai Elantra they're all very popular but they're all very good cars it's a matter of picking which one you like best because in terms of reliability quality and price they're all very comparable what's happening with the Civic it just keeps getting bigger it's like young growth hormone yeah alex is asking do you have any advice to reduce car insurance premiums here we are in Toronto that's a good question because there are huge insurance premiums for basically everybody depends the problem is in Ontario it depends on the postal code yeah believe it or not okay your postal code will determine whether you can pay very high premiums or not that's number one number two de pasión your driving records you know if you were in collisions before that fault fault collisions if you had tickets you know speeding tickets and stuff like that now if you work in a place where they have group insurance I will check that because usually you say between ten and fifteen percent on group insurance we said every day we know for example our members you know we have group insurance and our members say between ten and fifteen percent so he's right you know that Ontarians pay the highest premiums in the land the it's the averages around I think twenty to twenty three hundred dollars yeah yeah you know and that's just way too much other ways to save is if you're a member of a professional association sometimes insurance companies give you a preferred rate for that you can also save a little bit of money if you use winter tires in Ontario because insurance companies give you a discount on that as well but best advice is to hire a really good insurance broker because they can shop around you and find you invest rate really Kelly is asking Kelly Lynn I don't know we're talking to you here from Canada I don't know if you're in Canada or if you're in the United States the question is is there really much of a deal on Black Friday for buying a new SUV well there are incentives on Black Friday from manufacturers like you do see we're coming right up to it here yeah exactly yeah so there are manufacturers that come out with Black Friday InnoCentive 's not all of them do they're not always any different from any other types of incentives that exist at this time of the year so for most manufacturers I would say you know I don't think there's any additional incentives for Black Friday but some do and I think you know as I said the most important thing that you should do homework before you go to the dealership find out what the price should be you know there are there are a lot of - how do you find out it well for example we do that with our member car help camera yeah we do that we tell them what the dealer pays how much you should be paying so they know exactly how much so you the consumer should do that before they go to the dealership so they know exactly how much they are gonna pay I mean yes you can go there to start negotiating but if you don't have an idea you never know how much you're you know you're paying Christians asking a question here I will just point out very quickly I'm David Coleman with CBC marketplace we're here in Toronto in the offices of car help Canada Mohammed Bahama and sherry Primack are joining us taking your questions about buying a car the process the car financing leasing types of cards where you got throw it at us what kind of you know air freshener quick quick decision I like new car smell new car smell Christian when you negotiate the price how do you know you're getting a good deal can I check the value on my own somewhere that's a good flow coming out of so you do that here yeah neither can i they said our members you know always call us in there buy new cars all your scars and we tell them what the price should be and usually we end up saving them between probably five six hundred three four thousand dollars it depends on type of vehicle you know that they are buying but definitely it's a good idea to find out before ok YouTube viewer is asking when buying a used car is a history of being used as a rental car or a fleet vehicle considered a downside even if the vehicle looks like it's in good condition usually we don't we don't recommend buying the rental price because you know as you know David when people buy a rental car they don't give it that so he abused them you know and sometimes what happened even over the rental cars something they are in collisions but he cannot see it under reports because the insurance comes they have their own body shots and they fix it themselves so you wouldn't know yeah so there there's such a significant difference between a rental car and a regular user that some provinces like Ontario are required to disclose my mother that the car is a rental or not when you're selling it yeah dealer the dealer is okay privately no that's what I'm saying the dealer you are protected AMT does high mileage still matter on modern used absolutely but has the bar changed well here's the thing there's no doubt that cars have become a lot more reliable the quality has improved significantly but the problems that we used to have that don't no longer exist are replaced with new problems because cars are much more complicated nowadays there's a lot more electronics there's a lot more software and computers involved and that creates a level of complexity that means additional costs to the owner when the car ages older so yes a high mileage car can still be a costly one it depends on the type of car because they all have different reputations Christopher Inglis is asking what about buying a new car in its first model year is that a good idea or should you wait a couple of years it depends on the brand if it's a Toyota or Honda relaxes you know I don't think it's gonna be a huge problem you know unless they come up with a totally brand new engine totally brand new transmission then yes I will wait but if it's really just the design of the car the the look of the car this change I don't think we may be looking for in the car I Drive is 2009 it's eight years old right now but I think it's the same engine being sold in the current model year yeah yeah I mean even though they came up with new fit I would buy it it's a great car yeah yeah and one muhammad's saying is that in most cases with these good quality cars even when they redesign them if there are any bugs or issues in the first model year they're usually very minor ones like software that can easily be taken care of at the dealer Eric Hong is asking can we trust apps like true car cuts a car buying app do you know about it oh I oh I know about it but in Canada no you can't in Canada in the u.s. yes I mean they are big in the u.s. in Canada no I mean I really would talk to Canadian organization you know if you want to know the price yeah true car and carvanha there's these new online research websites they're good research tools they're good for doing your homework ahead of time mm-hm but there's there's good there's positives and negatives to them just like everything right yeah Ryan Clark asking are there any benefits to going to another province to buy a new car are the warranties still valid for instance the Archie is national yeah it doesn't matter you know when manufacture sells the car the warranty is the same for every province now actually believe it or not the best place to buy a new car now is the GTA this is GTA it's so competitive yeah I mean we have our members we go by Honda Civics they paid 300 bucks over cost there is no way you can get that in Alberta or even in Montreal you can't it's impossible because there are you see the G she has the highest concentration of dealerships in North America oh really oh yeah and these are so competitive here you can't get the best deal so does it make it I mean would it make sense for someone from let me say Kingston Ontario to come to Toronto to buy a car David I'll give you an example we had a game came from uber Scotia a lot about here in Toronto he flew he has family here and he got a little bit back because he saved $3,000 really yes so it makes sense makes title it makes sense you know to come to the GTA to buy car sometimes yes alright there's another reason for the restaurant Oh YouTube you viewer a user is saying I want to buy the safest car for the winter is it worth buying the upgrade to all-wheel drive oh that's a good question that's such a big misconception that all-wheel drive is a safety feature it's not it's a performance feature enhances the performance in terms of the way the car accelerates and gets off the line but in terms of your ability to stop sooner braking in terms of your cornering grip on slippery roads all-wheel drive doesn't do anything for you that's what winter tires are for so if you're thinking about safety look at winter tires instead of all wheel drive there's another question this one's coming from Brian what's with all the charges on the invoice can I negotiate some of these some charges are definitely negotiable because they're not mandatory by law but there are some that are considered mandatory fees that you can't negotiate such as freight and PDI all provinces of that fee there's nothing you can do about it if you're buying a brand new car but other fees yes some of them are negotiable and not on that some some other fees you don't even pay you shouldn't pay say for example sometime they will try to charge you what we call a window edging oh yeah we've done a story on that there's almost no police force in the world in Canada that sort of recognize yeah I say no if they said I'm walking away so they're not gonna let you walk away for 250 bucks or just say no you know if the administration fee you some depends where you go there are this you will to try charge you 700 800 men fee I wouldn't pay more than 300 bucks you wouldn't pay more than absolutely no other what is PDI anyway what is it free delivery inspection pre-delivery inspection yes which means you know with the car brand you came in you have to check you know the the fluids check everything is working you know and I thought you end up paying a lot of money for that that's crazy that's another way making little bit more money for the dealers you have to pay for them to look at the car when it comes off the truck yes Regular Show yes that's right and it's you have to pay it yes yeah unfortunately you have to would you hear that in the ads all the time frame with Freight okay I mean the the example of Corollas or the savings where they come from they come from Cambridge and Alliston yeah but you still pay what even hundred well the freight alone eight nine ten eight hundred thousand bucks for free they come only from Allison so and here we are in the Toronto area you just take the bus up there whereas you have some cars that are manufactured in Europe yeah in Japan and brought over to Canada and the freight can be the same price or even less yep makes no sense okay Brooklyn is asking when buying a used car from a dealership will I be able to find out the depreciation value of the car or will I have to trust on bargaining and will the depreciation depreciated value of the car affect the taxes okay let me break that up because it's in it's in pieces when buying a used car from it chef will I be able to find out the depreciation value of the car in advance no well I mean it's really I mean what does he mean by find out the depreciation so much you can depreciate it like so if you're buying a car will they be able to tell you what it'll be worth within a well no three years they do that with a lease say do that because they haven't what if it's are just a new car purchase even if it's on even if it's all alone well I mean the manifest can't do that but they're not gonna do it for financing they don't but for at least they have what they call a mathematical formula it's very complex that will calculate the value of the car three years four years five days out the road they'll calculate but also they're independent organizations like JD Power and Consumer Reports that also calculate the depreciation on cars and they'll publish those figures on an annual basis so for example last year the car that with the highest resale value turned out to be the Jeep Wrangler I believe it retained around eighty percent of its value after three or four years so organizations calculate those things and consumers can look them up yeah YouTube users asking is purchasing a used car from a repo loss car that's been repossessed is that advisable see the problem is I don't think they will let you take it for an inspection that's the problem you know if they let you take it for an inspection and get the history of the vehicle then absolutely I will consider it and find out what the way the price is good I will do it but if they don't let you take it for an inspection you know what I'll think twice about that too risky yeah too risky so I would be very very careful I'm David common with CBC marketplace and we're here at the Toronto offices of car help Canada Mohammed Bahama and Shari Primack are answering your questions about buying cars Carley saying you name it we've been taking any kind of question we only got a few more minutes for questions so please fire them in and we'll take those so that we can jerry is asking arc its consumer reports a great place to look at car ratings it's a valuable resource it's definitely worth looking at but I would look at it with the grain of salt you have to be careful because it is a member organization so the sampling that they do the data collection comes from their own membership base it's not like they survey all of the United States are all of Canada and accumulate all of that data to come under their ratings so you have to treat it with a grain of salt what's an alternative then well I'd probably disagree a little bit with sherry on this because consumers port is independent mm-hmm they buy their own cards they test their own cards they buy them and like in a lot of other places where the journalist gets cards from the manufacturers they buy their own car they test them you know so I mean their ratings I would trust there any more than you know other journalists I already do the other one is GD power the primary gjd power most of time is they do it for the first six months yeah which doesn't give you the idea of longevity how long do they do sometimes you know them but not very often you do either for I think four or five years but that's not very often so but consumer report I would personally I would trust Consumer Reports with their ratings very rare that I see them after a kiss you know they made mistakes right jaesi party a is asking what's a good interest rate on a used vehicle it's only a few months old that also you can negotiate your certainty with your bank but today I think right now if you go to your bank and it also depends on the on your credit where credit now so let's say this is someone with with a good credit good right now you're looking between four or five percent four and five percent yeah which is significantly more than the interest rate that many brand new cars can have because like we said many new cars you can have 0% interest rate or at the rid the most really new 3% so Christopher wicks asking what's your opinion on extended warranties if you plan on keeping the vehicle for six or seven years I mean Mohamed I know you recommend yeah I really do because especially right now you know and mean cars give you an example we had a case last week when the engine is gone on a BMW it was gonna cost her eleven thousand dollars that's right that's a lot of money if you had an extended warranty you have covered yeah right so it comes with compass car especially European cars you can keep let's say BMW or Mercedes or an Audi for over six seven years absolutely I will buy it next and orange because some people look at extended warranty I mean you've responded this in another question is that that's a place that a dealership that a manufacturer makes extra money is by selling it one extended way but if I am buying a Honda or Toyota I'm gonna keep it for five years I wouldn't buy it but if I'm going to keep it for eight years absolutely I will consider by an additional two three years it really you know it's like an insurance yeah that's what it is if your air conditioning goes after the fifth year right remember for example air conditioner comes only for three years yeah on most of course only three years so if your air district goes after four years you can be paying around twelve hundred bucks the people that can pass on the extended warranties are the ones that are buying a car with a really good reputation for reliability low cost to repair like Toyotas on the Subarus and they do low mileage driving if you only drive ten thousand kilometers a year then you can pass on the extended warranty because you probably won't benefit from it or if you are leasing I wouldn't my next n1 TV because sometimes you try to certain extent won't you and you at least I wouldn't because you're Christopher is also asking is MSRP a good guide to knowing the true cost of a car no MSRP that's what they're supposed to sell it for it's called the many factors you exist the retail price that's a Miss RPG but the cost is weekly something different it's less oh that's why you know we do things like this we work in our in this office because we have that information we know what how much the dealer pays so we know where and know the difference between MSRP and with the dealer pays and we can give an idea how much do you know should be making yeah that's right it's like one of our services is we help consumers get a great price on a new car and we try and come up with a fair price so that the dealership makes a little bit of money we also maximize the savings for the consumer because we want them to get a great deal okay so we run at a time here at the Toronto offices of car help Canada thanks very much to Mohammed bujjamma and Sherri Primack who work here in this office I'm David common with CBC marketplace thanks for about some great questions there really appreciate them and guys at car help Canada are always here you got your own TV show as well in the Toronto area where you where you talk to people of those kind of things anyway thanks very much folks here's a question for you

Channel: CBC News

Views: 518,407

Keywords: cars, buying a car, lease or finance, lease, vehicle, sales, dealership, haggling, consumer, consumer reports, Marketplace, CBC, CBC News, David Common, Car Help Canada, Mohamed Bouchama, Shari Prymak, How to buy a car

Id: xl5Pld2-OG8

Length: 60min 38sec (3638 seconds)

Published: Wed Nov 22 2017