Many factors go into price of a vehicle
Posted Mar 11, 2010 By Brian Turner
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Tweet ThisEMC Lifestyle - The following is the third part of a series on buying a first car.
So far we've looked at the reasons for buying a car, how to determine what type of vehicle is right for you, and ran down the pros and cons of new versus used. How about we add some dollar values to the equation? Disclaimer, when it comes to discussing vehicle prices and liability insurance costs, figures can vary wildly. Almost everyone you'll talk to has a story of a great deal like that $1,500 car they bought and drove for 10 years and never put a dime into. Like most urban legends, when you dig a little deeper their tall tales tend to fall apart.
The best thing available today for pricing used (and new) vehicles are great web-sites like www.autotrader.ca or www.driving.ca. In minutes you can browse through hundreds of vehicles and get a really good idea of how much your dream machine is going to set you back. A helpful tip here is to remember the major price differences a small item like a trim level designation can create. For example a DX level Honda Civic has fewer features and equipment than a LX which has less than an EX and all are topped in price by the Si level. If creature comforts like power windows and air conditioning aren't of much bother to you, then shop for the best price. But if you'd like all the extras, then check the auto makers' own websites to familiarize yourself with the number and types of features and accessories than each trim level brings. A word of warning to the wise, any trim level specifically aimed at driving enthusiasts (or wannabe NASCAR dweebs) such as a 'sports' model in a used car should generally be avoided like the plague. These vehicles were designed with the image that they can be driven hard, and that is usually the way they were (mis)treated. In reality this just leads to higher repair bills and expensive parts.
In very general terms for vehicles in the non-luxury compact class, anything priced under $4,000 is not a vehicle you can expect to drive for more than a year or two in our climate without repair costs above and beyond routine maintenance. This isn't to say you might find a reliable gem for $3,000 or spend more than $40,000 on a piece of junk. And of course you need to remember the golden rule, if it's over 10 years of age or has more than 250,000 km on it, it's likely to need expensive repairs to keep on the road. If you're budget minded, keep your focus on vehicles around the five-year-old mark with less than 100,000 km. For many vehicles, this brings the largest savings in terms of depreciation while still having a useful service life without a dark future of astronomical repair bills. With the exception of Volkswagen, most European imports should be given a pass as a first-timers used vehicle. This isn't necessarily because they're less reliable, but because repair centres and reasonably priced parts are harder to come by on average for vehicles from the other side of the Atlantic.
A road to avoid when considering the limit on your car purchase budget is the one that leads to negative equity or as car sales reps everywhere refer to it, 'being upside down'. This is when a customer needs to trade in their old wheels for newer ones but they still have an outstanding loan balance on the old vehicle. Some people never completely clear off the loans on their trade-ins and after a few car purchases over the years they end up owing thousands on worn out vehicles. No matter what the temptation or what a dealership finance rep is telling you, never sign on the bottom line of a finance contract with a term longer than the vehicle in question is likely to last. So in a hypothetical example of a six year old domestic compact, the length of the loan on it shouldn't be longer than three years (always be conservative when estimating the lifespan of a vehicle).
If you've gotten over the sticker shock for a mid to high quality used vehicle, hang on to your hat when checking for insurance quotes. For a new young (under 25 years of age) male driver, a basic compact car can cost over $5,000 per year to insure in our area. You'll get a much better deal (usually less than half) if you can add your vehicle to your parents' fleet and thereby get coverage on their policy. While it's easy to web search prices on insurance premiums, nothing beats having a face to face advice session with your local broker or agent. He or she can give you the benefit of years of experience when it comes to choosing the right coverage.
Next time we'll cover what to look for when heading out to kick a few tires.
A recent event I witnessed on the streets of Ottawa left me shaking my head until I realized many drivers might not be aware of the potential for this specific disaster. I was behind a car waiting in the middle of a signalized intersection attempting to turn left on a green light (I was turning left as well). This particular spot was quite busy with both vehicular and pedestrian traffic. The driver ahead of me was staring straight ahead watching oncoming traffic, looking for a break when it would be safe to turn. What this driver wasn't paying attention to was the pedestrian walk signal, for as unlike most signal systems, this set of lights gave a 'don't walk' signal when the light first turned green for cars, and only gave a 'walk' signal after a certain number of seconds had passed. The pedestrian that was waiting to cross and was paying attention to both the car and pedestrian signals just happened to be in a wheel-chair and had an assistant dog. When the walk signal lit, the pedestrian began crossing (the left turning car was stationary) but just after entering the path of the car, it began to move. Fortunately the pedestrian let out an ear-piercing scream that attracted the driver's attention who stopped the car just in time (the scream was followed by the appropriate amount and types of obscenities). I resisted the urge to hit my horn, being afraid I would draw the driver's attention rearward, when the danger was at the front. The moral here is, don't assume that pedestrian signals will match car signals in terms of 'walk' and 'green' and don't assume pedestrians will always obey them anyway. You can be in the right and still have to live with the consequences of injuring or killing someone.
If you have any questions, opinions, or stories on anything automotive please drop me a line, (By email to emc@perfprint.ca listing 'Question for the Car Counselor' on the subject line or by post to Record News Communications, 5 Lorne St., P.O. Box 158, Smiths Falls, Ont. K7A 4T1).
Yours in service,
Brian Turner
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