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If I had to pick the worst personal finance decisions people keep making, spending too much on vehicles would be on the list for sure.

I could tell you to stay open to cars instead of SUVs, to compromise on features and to save a bigger down payment so your monthly financing costs are manageable. But vehicle buying trends of the past few years suggest this advice isn’t resonating.

Fortunately, there’s help at hand for vehicle buyers. As sales slow and the supply of new vehicles increases, dealers are offering more low-rate financing and cash incentives to generate showroom traffic.

You can see the slowing of new vehicle sales in a report this week from DesRosiers Automotive Consultants. It shows that sales for the first half of the year were up 0.5 per cent, but June brought a drop of 8.6 per cent.

An e-mail I received from Hyundai last week says a lot about the new vehicle market as the economy slows: “Finance from 3.49 per cent and get a $500 bonus on select trims.” What’s happening at other automakers? Ford Canada’s website recently mentioned “employee pricing” deals, including financing as low as 1.99 per cent and thousands in price adjustments. Chevrolet Canada’s website mentions a Canada-wide clearance with some zero per cent financing available. Honda Canada’s website mentions some leasing deals with rates as low as 2.99 per cent.

Borrowing costs are falling these days, but the financing deals being offered these days on some vehicles stand out for cheapness. The prime lending rate at banks fell to 6.45 per cent after the recent cut in the Bank of Canada’s overnight rate.

Still, some vehicles are still gridlocked from a cost point of view. We checked in on a Toyota Prius recently and were told supply issues have resulted in an 18- to 24-month waiting list of people who are willing to pay the full list price. Online, Toyota says the financing rate for a Prius over five years is 6.89 per cent.

We’re still looking for a new vehicle. I suspect that the longer we take to decide, the better the deals will be.


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Rob’s personal finance reading list

Five vehicle-buying mistakes

Basically, ways to spend less money on vehicles. This is huge – the latest data from J.D. Power tells us the average vehicle price was about $48,000 and the average monthly loan payment was about $880, which is shocking.

Who wants to be a real estate agent?

A clear sign that the Toronto real estate market is cooling is the drop in the number of real estate agents in the past year. The easy money in Toronto real estate has been made, but maybe not in St. John’s. Here’s a story about how the hot market there is crushing affordability.

Squeamish about reverse mortgages

This look at reverse mortgages reflects the ambivalence many in the financial world feel toward these borrowing tools for seniors with lots of home equity. Here’s my latest on reverse mortgages.

Investing and saving for singles

Advice focused on the single person, which is an area that we in personal finance could focus more on.


Podcast fans

Subscribe to Stress Test on Apple podcasts or Spotify.


Ask Rob

Reader comments: “Hi Rob, I truly enjoy your articles every week. Thank you for all of the effort to put all of the information together! I wanted to reach out after reading the article about the car that drove one million kilometres. I drove my 1992 Honda Accord for 15 years and 295,000 kilometres. The biggest mistake that I made was not doing any rust protection. I then bought a 2006 Honda CRV and took it to Krown Rust Control every year. I just sold it, with 384,000 kilometres.”

Do you have a question or comment for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.


Tools and guides

A quick guide to the basics for TFSAs, RRSPs and FHSAs


In the social sphere

Social media: Average debt by Canadian city.

Listen: In the first episode of the new Wealthy Barber podcast, David Chilton has a wide-ranging conversation about personal finance with guest Preet Banerjee.

Money-Free Zone: Big Swimmer, the recent album from King Hannah, is a mix of slow burn and crunchy rockers. A track that bridges between the two styles is Big Swimmer, which features the excellent Sharon Van Etten on vocals. A favourite live concert moment was hearing Van Etten and her band play Serpents many years ago at a club in Ottawa.


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