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Mr. Red Sleeper wrote:Cars are supposed to work for you-;not the other way around.
Trinbagoviews wrote:[size=150]Unless you're very wealthy with money to burn you should not be purchasing a new car especially when taking out a loan. The costs are just way too high for the average Trinbagonian to absorb. The new car smell and the big "sawatie" feeling just isn’t worth it.
What you have to sat made alot of sense.....There are good used cars out here........Trinbagoviews wrote:Unless you're very wealthy with money to burn you should not be purchasing a new car especially when taking out a loan. The costs are just way too high for the average Trinbagonian to absorb. The new car smell and the big "sawatie" feeling just isn’t worth it.
Here's why:
The High Loan Interest Expense.
Riding a wave of emotion and persuasive arguments buyers often neglect to see what they're signing up for in terms of the tremendous financial expense they will now by saddled with. Here's an example:
New Car Cost : $200,000
Down payment: $20,000
Loan Amount: $180,000
Annual Interest Rate: 12% (Could be much more)
Length of the loan: 5 Years
Number of Monthly Payments: 60
Loan Interest paid after 5 Years: $60,240
Total Payments to Bank: $240,240
Total Acquisition Cost: $260,240
In other words a car that cost $200,000 winds up costing you: $260,240 after 5 years when you finance it.
Here's where you lose even more:
Higher Insurance Cost
Insurance cost is much higher on new cars and especially so when cars are financed. Once the car purchase is financed the bank makes it mandatory for the purchaser to take out a full comprehensive insurance policy to safeguard the financier's collateral. This means that your yearly insurance cost is much higher than if a cheaper second hand car was bought. Had you bought a cheaper second hand car not only would your insurance cost be lower but you could opt for third part, fire and theft insurance which is substantially cheaper than full comprehensive coverage.
Higher Maintenance by Local Car Dealers
New cars purchased in Trinidad and Tobago are required to have their vehicles serviced by the new car dealer in the early life of the car. These services are required to maintain the warranty on the car purchased. Even after the mandatory services to maintain the car's warranty have passed many owners often feel inclined to continue to service their cars at the local car dealers at very exorbitant costs since they worry that having the car serviced elsewhere could have negative consequences. Its even worse if the car gets into an accident and needs to be repaired.
Significant Loss in Value Once New Cars Are Driven Out the Showroom
Reports indicate that as cars drive out the showroom they immediately decline 25 - 30% in value since the car can no longer be considered a "new car" or unused. This is a terrible personal business decision and should be avoided by the average car buyer who cannot afford such a hit against their personal finances. Moreover new cars lose 70% of their value in the first four years. When you buy used, the original owner has already taken that major depreciation hit. You, on the other hand, can get a great four-year-old car for a good price significantly lower than the cost of a brand new car. Accidental nicks and scratches in the early life of the car also have the effect of eroding the car's value much faster.
Read the rest of the article here: http://www.trinbagoviews.com/2013/02/wh ... d-not.html
dogg wrote:Source of???Trinbagoviews wrote:
Annual Interest Rate: 12% (Could be much more)
Moreover new cars lose 70% of their value in the first four years.
Aaron 2NR wrote:The local used car industry id stifled because the volume of roro being imported therefore owners believe they have to sell below roro prices. ...
Personally people have to be mad to pay 100k for a roro tida....
Remember wheb a local used vehicle is sold some of these are still under firm warranty which is transferred to the new owner...
cinco wrote:what else will trinis spend their savings on btw?
a new house in any "decent" area is upwards of 500k
De Dragon wrote:cinco wrote:what else will trinis spend their savings on btw?
a new house in any "decent" area is upwards of 500k
Decent in Claxton Bay maybe! Try double that, real estate here is ridiculous.
kg494EJ-1 wrote:De Dragon wrote:cinco wrote:what else will trinis spend their savings on btw?
a new house in any "decent" area is upwards of 500k
Decent in Claxton Bay maybe! Try double that, real estate here is ridiculous.
I have to agree, I'm 25 looking for my first home and the reality sunk in, is either I rent or continue saving my cents by my parents. I went to look at a property in Curepe and nearly dead when I saw it, guy was asking just under 1mil for a property with a certificate of comfort and the house was just a fancy shed. Housing prices locally are ridiculous and a huge joke.
Locals don't seem to understand the concept of pricing, people can preach supply and demand all they want but these prices are ridiculous.
metalgear2095 wrote:I'm paying 4.1% for my new car. Much better than taking a loan for a used car IMO. I prefer to have piece of mind and don't mind paying a little more for something new. My wife's car was two years old when she bought it. Four years later it's finally done paid for. I'll be paying $500 more a month for a new car which will be five years old when I'm ready to sell. To me that makes more sense. I do agree that buying a house is close to impossible for the average joe though.
Sky wrote:AllTrac wrote:buying a used car is always a gamble and more than likely you always come out losing. Its either you buying someone else pride and joy or you buying someone else headache, 90% of the time its the latter. For someone who like to tinker and has a fair technical knowledge on cars also if your livelihood does not depend on having your own transport then I say go for it, save the extra dollars and buy it used. For a woman, first time owner, someone who doesnt have the time to run by mechanic and older people, save yourself the headache in the long run and buy new.
I think what OP isn't getting is the relative value of money.
If you ask most people if they would pay 2800/mo for a totally reliable vehicle with very little attention needed and very little chance of drama, they would ask what's the catch.
Some people can't afford to NOT have a vehicle available.
Also, the cost of time needed to tend to an older vehicle adds up.
I'll exclude the stress behind a broken down vehicle or not having one, because stress is also relative.
So in this country we fall into 3 categories when it comes to investing in a vehicle.
Absolutely need one, so it has to be new
Need one badly, but could handle a lil stress, so it could be RORO or local used under 15 years.
Just want a ride/too poor/ having a car isnt that big of a deal/praying to the B14 gods will have people buying old used cars.
Another thing.
While the RORO vehicle is cheaper, it's also older and the loan has to be paid off quicker.
This lands you into some higher installments.
If you have a lower paying, but very stable job, buying new will actually be more comfortable financially if you need to have a good vehicle.
When I was shopping I worked out the difference.
I had a choice between going RORO and pay $900 more every month, or go new and pay about 49k extra in interest. That 39k was a bit too hard to swallow, as it was more than the selling price of my previous car. I couldn't handle knowing that I was paying all that extra imaginary money so I went RORO.
Sky wrote:metalgear2095 wrote:I'm paying 4.1% for my new car. Much better than taking a loan for a used car IMO. I prefer to have piece of mind and don't mind paying a little more for something new. My wife's car was two years old when she bought it. Four years later it's finally done paid for. I'll be paying $500 more a month for a new car which will be five years old when I'm ready to sell. To me that makes more sense. I do agree that buying a house is close to impossible for the average joe though.
I'm fortunate enough to be paying for both house and car.
With the length of time you can take paying off a new car, sometimes people need that low installment.
If I wasn't fortunate enough, I would have been getting a new car instead, because they're mostly cheaper than a RORO monthly and gives you access to other things. Some people prefer this.
I took the RORO because I could handle the higher installments and it made no sense going new and pay that much more.
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