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Originally Posted by Martian
... This is apparently not your situation, however you might consider keeping the Sunfire on the road as long as possible and putting the money that would otherwise go towards car payments into a savings account, which will allow you to make a larger down payment when you do finally purchase your car and thus pay less interest. Set a specific date for yourself; next September if you can manage it, or maybe immediately before renewing your registration. However, be prepared to abandon that date if the Sunfire gives up the ghost prematurely. In other words, drive it 'till it dies, then use whatever you've managed to save up in the interim as leverage to get yourself the best deal possible.
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Yeah, I understand about saving. I know I'm new around here and anonymous posters are assumed to be young and foolish. I'm not. I saved for a large deposit and got a mortgage, I have 6-8 months of living expenses saved up, I have been making small RSP contributions since I got my degree.
My car could quit tomorrow. I've decided I'm not going to dump any more money into it. I have about 2000 that I've been putting aside into a car savings fund. I always was of the frame of mind that you should buy a decent used car. If I had 12-15k ready to go, that is what I would do. I'd rather finance comfortable payments then dip into my savings.
But now that I'm researching it, the whole "you lose 30% of the the value of a new car the second you drive it off the lot" is bull. You lose tax value and whatever dealer prep charges they can stick you with. It seems steeper for the first 36 months or so, then it is a pretty linear and shallow depreciation.
It does depend on what car you buy how much value it drops, and the numbers can go either way depending on how you manipulate them. I contend that under my conditions- financing new at 0% vs financing used at at higher rate, there isn't a clear choice. NPV, estimating future values, comes out roughly even. On paper, you spend a little bit more on a newer car; but in the end that extra expense went into car depreciation instead of the bank's interest charges and you have a car that is 5 years old instead of 8-10 years old that is paid off.
A lease isn't really an option; it'd be cheaper in the short term but the whole concept seems flawed to me.