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April 02, 2021

Is now really the best time to buy a domestic car?

By Jason Buckland, Sympatico / MSN Finance

In this economy, our reaction to the demise of the Big Three automakers starts at, “Shucks, sad to see such North American institutions crumble like that,” quickly turns to, “The greed of those fat cats – good riddance!” and ends up somewhere in the ballpark of, “Hey, maybe there’s a deal for me hiding in all this mess.”

It's a pretty cruel progression, but we shouldn’t feel the need to apologize. If it’s not every-man-for-themselves out there now, it’ll never be.

So it’s with that in mind we present more fuel to the idea that now is the best time to buy a domestic car. It’s long been theorized that Buy Low logic applies to the auto market, but new information about retail prices, slumping sales and dealership incentives highlight just how low it really is.

Despite the gloomy business outlook for Ford, GM and Chrysler, prospective car buyers have little to worry about. “Very ironically, there’s never been a better time to buy,” a Ohio-based marketing professor tells Smartmoney.com. “Now they’re practically giving the damn things away.”

The Vancouver Sun reports Big Three dealers with slumping sales (down 9.6% overall in B.C. in 2008, for example, from a year before) are being forced to offer major deals or they’ll face going under. As a result, many now are more-inclined to toss around bargains like four-figure cash back incentives and 0%-financing to get you into their cars.

New numbers have also come to light that show why vehicles have rarely been this affordable for Canadians. Over the past 10 years, in terms of how many work weeks would be required for a Canuck to buy a new car, prices have been consistently dropping.

Down from a high of 24.1 weeks of before-tax family income in 1997, it took a Canadian household only 18.2 weeks to be able to afford new wheels in 2008.

All of this is moot, sure, if you buy a GM/Ford/Chrysler that turns out to be a lemon, but there are new developments on that front, too. When President Obama announced his government would back warranty claims from car owners should General Motors or Chrysler be unable to afford them, he surely put some confidence in those who wouldn’t even go near a dealership.

So as the Canadian government considers a similar kind of action to jumpstart sales, it’s at least conceivable that, yes, now might be a pretty decent time to buy domestic.

That’s what Tom Harris, from Nanaimo, B.C., tells the Sun, at least. He says customers have access to “the best deals he has seen in 25 years as a GM dealer.”

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A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

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