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Julien Gauthier

Financing Question - HELP

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Hi guys,



Big dilemma right now. Here's my situation:



  • Currently have a 2013 Edge Limited AWD 3.5L V6
  • Bought used at a dealer this year, with a solid carry over from my last vehicule.
  • Edge has 68 000 km (yep, I'm canadian !)
  • Currently on a 6 years financing at a ridiculous bank rate of 6.5%
  • Payment is 276$/2weeks

Talked to my dealer. He has a demo 2015 that he needs to sell:



  • 2015 SEL AWD 3.5L V6 with all the options I want.
  • Only has 3 000km
  • Would finance me over 7 years (I know it's long, but eh), at a much better rate of 2.99%
  • Would take my current car with all the balance
  • Payment would be 290$/2 weeks

MY QUESTION



Now what's better ?



276$/2 weeks, on a 6 year term at 6.5% (used 2013 with no warranty)


OR


290$/2 weeks, on a 7 year term at 2.99% (new 2015 with warranty)



Somebody good in maths could help me on this one !? I work on the road and expect to do around 25 000km/year.



What should I do ? Do I make the move ? I've only had my 2013 for 6 months now !


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Here is your maths:

 

2013 Edge Limited:

If paid over the 6 years @276$/2weeks = $43,056

 

2015 Edge SEL:

Paid over 7 years @290$/2 weeks = $52,780

 

You'd be paying almost $10k more over an extra 1.5 years (assuming you have 5.5 years left on the 2013).

 

If this is a purely economical decision, obviously you should stick with the 2013.

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Thanks KnickerBock.

 

But obviously, I'd pay more interests with my 2013 at 6.5% than 2.99% on the 2015..

 

52 780$ has more ''capital money'' than the 43 056$ right ? In proportion...

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Never consider the car an investment.

 

There would be almost no "capital money" on 7 year old vehicle with almost 200K kms...

Edited by Vadimus
  • Like 1

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Yes, you'd pay $7,481.68 interest for the 2013 or $5,210.67 for the 2015 over the entire term.

 

While you're 'saving' on interest, you're going to be 'paying' more in depreciation for the 2015. If you can afford the $290 payment, you could increase your payment on the 2013 and have it paid off 4 months early and save $433.62 in Interest.

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If you're just trying to justify the 2015 based strictly on $$ you can't. If you want the 2015 and you can afford the higher payment then go for it. Whether the $10k is interest or principal isn't really relevant - it's still money out of pocket.

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Here is a better way to look at it.

 

Would you rather have the 2015 or the 2013 with $10K sitting in the front seat?

  • Like 1

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Thanks guys ! Your answers are helping ! Still no decision made here...

 

I knew it would be more, but not that much...

 

Have to take in consideration that my 2013 has no warranty left. 2015 would be full covered for 3 years..

 

Would the repairs and possible mechanic problems justify the difference, I don't think so...

 

Any other advices here ?

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The warranty and less interest paid are good things but still not enough to offset a $10K bump.

 

If you can afford it and you want the newer one get it. If you're waiting for financial justification you're not going to find it.

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Haha Thanks Akirby !

 

I wanted it to make sense, but it doesnt. I'll stick with my 2013 !

 

Thanks for all your answers guys !

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In Canada do they split the payments up into 2 week increments?

Edited by 27Sport

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In Canada do they split the payments up into 2 week increments?

My dealer's business manager has assured me we can do bi-weekly payments. You can also choose the day of the week it comes out of your bank account for auto payments.

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