I've never had the money to spend on cars, particularly new cars, so I've never put a lot of money out on them. But more to the point, cars aren't that important to me, and they certainly fall far behind other things that are important to me, such as securing my retirement. So, if this was my choice, I would choose the $39K option, but the $39K would be meted out as follows:
- $10-15K on a good used car.
- $120/yr on a BCAA Roadside Assistance membership.
- $25-29K in my retirement savings plan.
"But, Kelco," you say, "I don't really have $39K. I'd have to borrow it and they don't give loans to put in your RRSPs." (Frankly, I think they should, but...)
If you're borrowing to buy it, which I assume you are, that's even more reason NOT to buy it. Don't take loans to buy depreciating assets. Instead, buy the used car and insurance that I outlined above, and then pretend that you have a car loan and "make the payments" into your RRSP/401K.
(BTW, I am actually driving a nicer car right now than I ever thought I was going to own. Two years ago, my wife and I stumbled upon a really, really attractive Mexican girl who was living in Vancouver, while her rich, older husband was living in Mexico. He was literally paying her to move back to Mexico (including having a brand new Mustang convertible on order so that it would be in the driveway when she arrived). So, she was liquidating everything she owned, and money wasn't a big deal to her. We got her LOADED 2012 VW Passat for $14K CND, with only 30,000 miles on it. I should have flipped it, bought a lesser vehicle for about the same money, and put the difference in the sale prices in my RRSP. But driving it was just so nice. 🙂)