When shopping for a deal on any new car, you will realize fantastic dividends by taking the time to crunch the numbers - in detail.
Paul Timoteo, president of the pricing service www.CarCostCanada.com, has done just that for three small cars - popular models that Canadian buyers want and can afford. The winner? The 2010 Mazda3.
"What makes the Mazda my No. 1 choice is the much cheaper finance rates," says Timoteo.
Story continues below advertisement
Let's look at three deals.
2010 Mazda3: Timoteo argues, and I agree, that the base MSRP (manufacturer's suggested retail price) of $15,995 is already a good value. But there's more.
"New cash rebates just came out -- $1,500," says Timoteo.
If you qualify for the "grad" award, take off another $500.
Story continues below advertisement
"So the net is $2,000 off, or only $13,995, plus freight and options, less a dealer discount of $400-$600," he says.
Let's price out a popular combination of the 3, the GX with automatic transmission and air conditioning:
- MSRP including freight, AC tax (air conditioning) and other charges: $19,884.
- Factory discounts: $2,000
- Dealer discount (average): $500
- Final price: $17,385 plus GST and PST.
"That's a lot of car for the money," says Timoteo, striking a reasonable conclusion.
If you choose to finance the purchase through Mazda, the rates are great, but kiss off that $1,500 rebate - it's not "stackable" with the rebate. Still, if you want to borrow, you can get Mazda money for nothing - 0.0 per cent interest -- for 48 months or 2.9 per cent for up to 72 months.
Story continues below advertisement
Car #2: Honda Civic.
"Honda has been blowing out their leftover 2009 Civics and they've lowered the MSRP on the 2010s," says Timoteo.
Here's a look at a Civic equipped similarly to the Mazda3 GX, this one the 2009 Civic DX-A sedan:
- MSRP including fright, AC tax: $20,985
- Factory rebate: $2,500
- Lease maturity credit: $500
- Dealer discount: $800
- Final price: $17,185
"That's close to the Mazda, but it's a 2009 (Honda), versus a 2010 Mazda," says Timoteo.
Story continues below advertisement
As for Honda's finance rates, they start at 3.9 per cent for 36 months and range up to 6.9 per cent for five years.
This is where the math comes in to play.
Buyer A takes out a $20,000 loan for five years and opts for the Civic and Honda's program. At 6.9 per cent, the payment is $395.16 a month for a total of $23,709.60.
Buyer B takes out the same $20,000 to buy the Mazda3, using Mazda's money at 2.9 per cent. The monthly payment comes to $358.51 a month for a total of $21,510.60. The net savings is $2,199.
"That's huge," says Timoteo. "Plus, if somebody has a really tight monthly budget -- and who doesn't? -- with the Mazda they can get 2.9 per cent for 72 months, which drops the payment to $303 per month for a total of $21,816. Net savings: $1,893.60, which is still great."
Story continues below advertisement
But as CarCostCanada's Timoteo adds, the difference in monthly payment is $92 a month.
"That's huge for someone in this price range -- $300 a month is a magic number for a lot of people. So $303 is no big deal, but $395 blows them right out of the water."
Finally, small car No. 3, the 2010 Kia Forte - an all-new model for 2010:
- MSRP including fright, AC tax: $19,750
- Factory rebate: $950 for cash buyers or $700 for finance buyers (who can get 0.0 per cent financing for 36 months, 1.9 per cent for 60 months or 3.49 per cent for 72 months.
- No payments for four months
"Plus everyone - the Kia buyer -- gets a $300 holiday prepaid Visa card," say Timoteo.
Looks like small cars are on offer in November.
Story continues below advertisement
(Pricing provided, by www.CarCostCanada.com .)