I realize I posted somthing similar to this before but I still haven't had any satisfying response so I will try again.

I want someone to convince me that it makes more economic sense to buy the Z brand new as opposed as relatively new on the private market. I am not sure how long I will be in a positon to keep the Z, so limiting any possible deprection losses on a future sale is very important to me. I anticipate keeping the Z for two to three years and the analysis below is based on that anticipation.

The way I have analyzed the situation is as follows:

If I purchase the performance model for MSRP at $45000 CDN, my total outlay, assuming no options, will be approx $54000 CDN INCL TAXES PDI FREIGHT.
If I drive it 20000 km per year and attempt to sell it the summer of 2004, I believe its value will be approcximately $38000 CDN (this is the approx value of a 2000 S 2000 with 40000 KM which is probably a good car to use for depreciation comparisons)
MY cost for two years of ownership in depreciation is $16000 CDN

ON the other hand if I buy a relatively new performance model with say 15000km, through a private sale for approx 42000 CDN, pay only one tax on that purchase price, my total outlay will be approx 46000 CDN. If I then sell that car two years later, when it has 55000KM, I will probably still be able to get 36000 CDN for it.
My cost of ownership for two years in depreciation ifs $10000.
So by buying privately I will have saved about $6000.

I want to buy the Z NOW, but I feel bound by this economic argument, I just can't seem to dismiss the $6000 savings.
Can anyone point to any flaws in this analysis such that I can relieve myself and place an order for the 350Z

Please help

 

The tax rate in Canada is 17%, so the one u mention is in US.
and Zless, u got a pretty good plan, but in fact, i don't think u can get a relatively new performance model at least not in this year or next year............ so u gotta wait for a long time, at least that's why we all pre order it first, cuz it seems that the z will run out of order after awhile, and maybe u gotta wait even longer than we do if u plan to order a new one by that time........

 

As mentioned by John, I don't understand why there is such a huge difference between the 45K vs 54K prices, and the 42K vs 46K prices.

I know I haven't added much to solve your dilema, but I hope you can now relieve yourself. Sometimes I put these same type of conditions on myself, but usually they are more along the lines of "I'm not going to pee until I finish reading this post". To hold it until you make a decision on a car purchase shows incredible fortitude!

Enjoy!

 

um......jmanz, the 14% u mention is the tax for civic or price around that, when the price goes higher, the tax rate will be added, so for the car that's more expensive than the civiv will get 15%, and for the high price car u will get 17% which the Z is in the range of 17%(this happen in BC as i reread jman's post)
but hey jmanz, i don't know much about buying car in another province but i know that there might be some strict rule to prevent u not to buy car across province, think about it, if they do then wouldn't it be just like US people come to Canada to buy the car?
The performance or touring model:
44900*0.17=$52533

for the model with nav with u have to add 3400
48300*0.17=$56511

 

ZLess, I don't understand this "economic argument" and your problem at all. You are trying to put into dollars and cents something that has nothing to do with saving money and everything to do with satisfying a desire. To save the most money possible, get a five year old Toyota Corolla: it's inexpensive and reliable and will have good resale value. What, but you don't like that solution as much? That's the point -- you get a new car instead of a used one because it feels better and will make you happier. If not, then get a used one. Of course you will save money buying used just as you will save money getting the Corolla or by not getting a new car at all. But that's not the point, is it? In two other response to your question I also gave some good economic points to getting a new car but I guess you didn't see those messages or didn't respond.

Anyway, my advice is to do what your heart desires -- life is short!

 

Big guy - just buy the Z and dont worry about the money. You only live once - too bad you have to do it in Canada - heheheh just playing, but if that is the real tax rate that is crazy!!

 

yup, canada tax rate is crazy, canada government is crazy............

 

Just to clarify some things for this post since I live in the same city as Zless,

New cars get taxed (2 taxes GST+PST) 15%

Used cars get taxed once 7% if sold privately, if sold by dealership, its still 15%

Freight here is like 800bux canadian I think (i'll have to check my order form).

The tax rate is not 17% here.

 

Here's how Canadians get a bit better deal on 350Zs:

US MSRP: $34,079
Canada MSRP (in US$): $29,741

US Sales Tax (assumption): 7%
Canada Sales Tax: 15%

Net Price US: $36,464.53
Net Price Canada: $34,202.11

If I recompute for Alberta Sales Tax (i.e., GST only at 7%) I get $34,202.11 or $$2,262.42 less!

Other factors have been removed (e.g., destination charges) as they are nearly equal in both coutries factoring out exchange rate.

You can argue a number of factors that have been removed are not insignificant, but I'll bet that the results will still favor Canadian Z pricing regardless.

 

Buying a preowned car is always cheaper than brand new.
You're paying after the other guy paid for depreciation.
having said that, buying an impractical car as a Z, should be
buying a Toy (that you can use 6 months only) specially if you
live in snowy part of Canada. My idea is to buy a Z as a toy and
to keep it for a long time, as a summer & fall car, and have
a FWD car for the winter. Whatever your purpose, you will
lose money buying any sports car! It's not an investment.

 

Zless,

Here is a different way of looking at this:

Assume that you've paid cash (I'm ignoring any cost of financing or any opportunity cost here):

NEW -> pay 54K today, get 38K in 2 years. Cost = -16.11% p.a.

USED -> pay 46K today, get 36K in 2yrs. Cost = -11.54% p.a.

Purely on this basis the cheaper alternative is to buy used.

 

From an investment standpoint, cars are bad.
Used cars are not as bad as new.
Broadly speaking.
Any questions?

 

zless,

I think z350z said it best -
If you are looking at the cost differential because of not wanting to put out a whole lot of money on something you are keeping for a short time, a lease might be better for you, as JmanZ suggested. Of course, that assumes the money you save is invested. Also, it assumes that the residual value of the car is high enough and loan factors low enough.

I have purchased a number of my cars used when they were about 1 to 1 1/2 years old. I saved on the initial depreciation for sure. I don't put down a lot of money on them and finance. However, I keep my cars for about 2 to 2 1/2 years because I have the incurable new car bug. What I basically wound up doing was getting the loan payoff to a level that the car was worth, but then having to pay for some sort of big maintenence (tires usually). I see this pretty much the same effect if had just leased it for 2 years.

The 350Z is such a beautiful car - that makes it even more difficult to take the balanced rational approach. Godd luck in your decision.

PS - My vote is to get it new!

 

Here's how it works IMO:

You buy a new Z NOW...

or you buy a used Z LATER.

I prefer to drive my Z now, so I bought one.

Cars are not an investment, they are a liability and a money pit regardless of how you run the numbers.

I just figured "I want it, but can I afford the monthly payment of $_____ for __ months?" and I said "HELL YA!"

Cars like the Z cannot be justified financially... it's always a poor monestary decision to buy a new car, period. But if ya want it, ya get it!

I don't work 60 hours a week to stuff $1000 bills into a mattress...