10 ultimate tips for buying or renting a car

Well, here we go, you want a new vehicle. You ask yourself: should I buy a new or used car or rent one?

Make a list of your needs

First and foremost, take a blank piece of paper and a pen and list your needs:

• How many passengers (you, couple, children, carpool)?
• Use: work, leisure, both?
• What is the daily mileage according to use?
• How many years will you keep the vehicle?
• Are you going on holiday by car, where?
• Which models interest me?

Set your budget

List all expenses related to the automobile of your choice. Use the CAA calculation tool on the cost of using a car. Financing matters a lot: choose the cost over the year, not the week. And compare the rates offered by the dealer and your bank. Borrowing from the bank could allow you to benefit from a cash purchase discount at the dealership.

Shop

Consult the guides. Read the experts’ comments in the media. Note the strengths and weaknesses of the models of your choice. Complete your search on the internet. Then make a list of dealers to visit.

Rent or buy?

On the sheet just now, draw a vertical line and write “rent” and “buy” on each side. In each column, quantify the advantages and disadvantages (see table). Compare the prices and resale value of each model on the internet and in the classifieds. If it is low, the rental may be possible (luxury vehicles depreciate very quickly). And if you make a lot of mileage, forget the rental. Also consider the consumption of the vehicle, especially if you are traveling long distances. If you have made up your mind to rent a car, why not check the chase freedom rental car insurance?

LEASING

Advantages

• Less expensive than buying
• Fewer problems in case of vehicle theft

Disadvantages

• Fees are required if you exceed the mileage listed in the contract (between 18,000 and 24,000 km / year)
• Insurance is more expensive because of refurbishment in the event of an accident
• Administrative costs are often high
• The cost of the possible repurchase of the vehicle exceeds the resale value on the market
• You are inevitably billed for damage (normal wear rate) at the delivery of the vehicle
• Interest rates are higher than buying
• You have no assets

PURCHASE

Advantages

• No mileage limit
• You own your car longer than with renting
• Insurance less expensive than renting
• Possibility of resale
• Interest rates are lower than renting
• We can negotiate the purchase price or the options
• Your asset can last a long time after you finish paying it

Disadvantages

• The monthly purchase is higher than the rent
• Your car loses between 30% and 40% of its value as soon as you leave the dealership
• Annual depreciation of about 10% (popular models)
• The depreciation varies greatly depending on the make, model and condition of the vehicle
• Resale to an individual requires time and energy

 Call your insurer

Before buying or renting, ask your insurer or broker for an idea of ​​the premiums for the models of cars you want based on your usage.

Ask questions, negotiate

At the dealership, bring in written questions and attractive offers from your competitors. Look independent to have control of the discussion, introduce yourself at the end of the month (sellers must achieve their goals), avoid unnecessary options (anti-stain treatment, loan insurance, new value insurance, life insurance) , negotiate on their costs or get freebies (extended warranty, remote starter, power windows, gadgets), opt for vehicles in inventory to negotiate a discount on the price, be polite and wear nice clothes (you will be better served) , require free services (oil change, winter tire installation and storage, alignment). Bear in mind that the profit margin on the most popular new models is around 6%.

Above all: take a test drive (never when it rains) and demand a written offer. If the salesperson or sales manager is pushing, shop elsewhere.

Have the right “timing”

The best time of the year to buy is now (February to March). As the new models have arrived: you can get a special liquidation. And choose a less popular model.

Used vehicle

Ask for the dealer’s OPC license and have the vehicle inspected. View the transaction history of a used car at the SAAQ. Take a test drive to the registration office, where you will pay for the vehicle.

 

Say yes to high interest savings accounts?

With rates not exceeding 2%, high interest savings accounts are not ironically the most profitable, but they are an ideal vehicle for savers who want flexibility.

Current interest rates are historically low. But given the current situation, “as soon as you benefit from a 1% savings account, you can call it a high interest,” says Paul Marcotte, an independent financial planning advisor whose clients hold a few savings. Millions of dollars invested in these high interest savings accounts.

Online banks first on the charts

With a rate of 1.45% from the first dollar deposited, and low transaction fees, Manulife Bank’s Advantage Account has the best interest rates available today. It is followed closely by Tangerine (interest of 1.30%). “Before, we suggested our clients save with ING (former Tangerine), but since the institution was acquired by Scotiabank, their offers are much less aggressive and we transferred our customers to Manulife”, admits Marcotte.

The only drawback he sees in Manulife’s offer is that clients are forced to go through an investment advisor to open the account, after which transactions can be made directly over the Internet or over the phone.

CIBC eProfit Savings Account

CIBC prides itself on offering competitive rates of 2%. But if you take a closer look, this is a promotional offer that applies to new deposits of $ 5,000 or more that will end on March 31st. After that date, the 0.95% interest bonus will no longer be available, and a regular rate of 1.05% will apply again on any balance over $ 4,999.99. Below this amount, no interest will be returned to this account.

Again, the rates are not extraordinary, but it’s always better to put $ 2,000 in a high interest account than to let that money go into a current account that pays nothing. “Especially since financial institutions make money every night, but they do not pay anything to their customers with an interest-free account. It’s shocking!” Exclaimed Marcotte.

National Bank or the Caisses Desjardins?

1.20% is the rate applied by both institutions. While the National Bank account only pays interest from $ 5,000, Desjardins offers this rate of 1.20% on every dollar saved. “The interest rate may change from time to time depending on market conditions, but it will still be better than our other traditional savings accounts,” reads National Bank. This is a policy applicable to all high interest savings accounts.

The other advantage at Desjardins: the account is eligible for non-registered plans in the same way as for RRSPs. Like most of their competitors, both institutions insure their clients’ deposits up to $ 100,000. HSBC Bank offers some of the best high interest savings accounts.

The club of 1.05%

Finally, RBC, Scotiabank, BMO and TD Canada Trust are playing games at 1.05% each. Each institution has its particularities that they detail in the very small lines at the bottom of the sites – when no interest is, for example, payable on pay bands under $ 5,000 and over $ 5,000,000 at TD. Scotiabank is doing the same, but setting its limit at $ 2,000,000.

HSBC, meanwhile, proposes a progressive rate (from 0.5% to 1.15%) but especially the possibility of accumulating savings in foreign currencies such pounds sterling, even euros, but to a lower interest rate.

Repay your mortgage on an accelerated basis, is this a good choice? In most cases, yes, and here’s how to go about it.

Since interest rates are low these days, repayment of the mortgage is not necessarily the priority.

“First of all, We must think about repaying any credit card debt whose interest rates are prohibitive (19.9%) and provide a cushion for any unforeseen,” warns Sylvie de Bellefeuille, lawyer, budget advisor.

Nevertheless, it is an effective source of savings to which Lyne Sanfaçon, mortgage broker, sees “only benefits”. Except obviously “for those who already have a tight budget.” According to her, there are four ways to go about it:

1- 10/10, 20/20

In the case of a closed term mortgage, it is possible to have a “10/10” or “20-20” clause in your loan agreement. The first 10 (or 20) means that you can make an additional payment once a year (or in installments) for up to 10% (or 20%) of the original amount. The second 10 (or 20) means that you can increase your payment (every week, every two weeks or monthly) by 10% (or 20%).

2- Payment every week or every two weeks

The easiest way to pay off your mortgage faster is to increase your payments by having your deductions weekly or bi-weekly instead of monthly. But the best is still to slightly increase each of these refunds (accelerated two-week payments, for example). For a loan of $ 200,000 over 25 years at 2.99%, the bi-weekly payment saves only $ 189 whereas if you spend the milking from $ 436.08 (every two weeks) to 472.73 $ (every two weeks accelerated), the cost of the loan drops to $ 73,377.81 or $ 10,072 in interest savings. Mortgage broker and Mortgage banker are both important people when it comes to taking a mortgage, but which one does what? People often confuse between the two.

3- The Mortgage Line of Credit

The anticipated clauses cap the possibility of accelerated repayment of the mortgage loan. In order to repay a large sum at one time, for example, if you pay 20% of the purchase price of your property in cash, you can obtain a margin as soon as you sign a mortgage loan. The rate of such a margin varies among financial institutions, but currently, it is typically 3.5% (Bank of Canada index rate + 0.5% generally added by institutions). It must then accommodate a portion of the purchase price, which will allow a refund without limit and without charge at the pace desired by the buyer. This operation does not involve any additional costs if it intervenes as soon as the mortgage is set up.

4- Decrease the duration of the loan

Finally, when renewing the loan, it is advisable to reduce the remaining term of the mortgage. “The payments increase slightly while the savings on interest are huge,” says Lyne Sanfaçon. In the case of a $ 175,000 25-year loan with a rate of 4%, after five years it would be sufficient to reduce the three-year term (from 20 years to 17 years), which would increase monthly installments of $ 106.5 to save … $ 17,000 interest!