Civ Nation – Car #2
Civ Nation – Car #2
Hey everyone. Hope you all have been good. A little delayed on this post this week. Work has started up again and things are crazy busy now. We knew it would be nuts though, with the 2 kids. Finish work, pick them up, play hockey a bit, cook dinner, shower, veg a bit and then put them to sleep. Fun, Fun!
My body has taken a beating getting back into shape going from 0 – 100 so I have been just watching some tv and movies the last couple nights and going to bed early instead of sitting down and writing a post. It feels great though to be back at it and I love working outside and the free workout.
This is the journey we call life…. haha!
Speaking of which our 2nd car decided to basically call’er quits…. We both knew it was coming but was hoping it would hold out a little longer since we replaced our escape August last year.
The Old Car
Our old car was a 2006 honda civic and this car was one of the best cars we have ever had. We bought it in 2009 and other than 2 new starters and a new air conditioner, there was no problems. Sure there was a little bit of rust around the wheel well, but aesthetically she still looked pretty good.
We got 350,000 km out of her but I knew we needed new summer tires, front struts and then driving sometime last week the muffler decided to become performance exhaust and drop off. All together we were looking at about 2k in repairs and used tires off kijii to keep her going. I decided to look into some new cars and realized it wasn’t really worth forking out the money to fix it this time.
It was time to look for a new car.
I had it in my head to just buy another civic, as we already have a suv for the family. Really the car is just for me to get to work and back and do some normal errands. Our previous civic treated us incredibly, so that previous experience basically made it a no brainer.
I was originally thinking of getting like a 2010 or something for like 7-8k but the budget slowly increased as I kept looking at cars. lol!
Some cars I really liked and thought were a great deal and then I see they were in a accident, which turned me off.
The New Car
We ended up buying a 2013 honda civic with 110,000km on it for just over 12 thousand all in. Yeah I know, threw that budget out the window didn’t I?
There were certain things in our new escape that I absolutely loved that I always thought were over rated until I actually had them and enjoy those features a tonne now. Heated Seats and Bluetooth.
Heated seats? Yes I thought they were a huge gimmick as well, I got to say my ass loves the heated seats! Especially after a cold, damp day at work. (I’m a landscaper if you didn’t know)
Bluetooth? I’m not a big phone talker guy, but boy oh boy do I ever enjoy my podcasts. I drive half hr – 45 minutes each way for work and the radio gets boring really fast. I really enjoy my morning drive with a hot coffee and some MapleMoney, JoeRogan or ChooseFi. So yeah, get me the bluetooth!
I ended up getting a pretty sweet ride with all these features and leather seats. Ive never had leather seats in a car, oh so comfy. With work and the kids, leather is a nice bonus as well because of how easy they are to clean.
Its got a sunroof too, meh….. I get enough sun during the day. This is something that is super overrated and I worry it will break or something and the car will flood…. arg hopefully not!
Ecoride
The newer civics (well newer than my previous 2006) have a ecoride option in them that makes the engine more efficient and saves money on gas. Our previous car was good on gas but so far I have been averaging 6.9 liters of fuel for every 100km I drive. That seems awesome to me!
There is also this cool thing on the dash showing how much gas your using when your accelerating in real time. Pretty dam neat and I find myself easing into accelerating vs just hammering the gas, like I used too!
Those civic’s really are a great vehicle for fuel efficiency.
Payment……
I was really debating getting a newer car or just fixing the old one. But after the week and a half I have had it, I’m glad we decided to bite the bullet and just get the upgrade. I really was starting to dread driving the older car vs our newer escape. Unfortunately there’s a cost to the car and we don’t keep an emergency fund.
I really feel that our money is better in the market working for us than sitting there in a crappy savings account. We have line of credits and credit cards if something really popped up.
To me new cars and loss of employment would be big hits, but other than that most emergency’s are small and we could use the line of credit or credit cards to pay them and then pay them off asap.
Our line of credit was at 8% interest and the dealership offered us 6% financing on the car but we decided to just sell some stocks to pay for the car in cash vs having any new monthly payments. While we are lucky to be in a position to just do this, it does suck to lower our investments yet again……….
2 new cars in 7 months, hurts! They should last us another 8 plus years though…… Drive them into the ground!
Stock Sales
Oh man I hate writing this stuff, but this is our journey….
We sold our position in Russell Metals and locked in a 38.5% gain plus the 8% yield on cost of the original investment. This stock did very well for us, but maybe I should of sold when it was around 30$ a share and we were up about 80%. Either way no complaints! Ultimately this one doesn’t fit the mold anymore. I want to focus on dividend growth stocks and they haven’t raised their dividend in a long time.
This was one of our very first stock holdings and I never added to it. The sale netted $1,095.
We also sold our entire position in Shaw. This one has a lot of potential with freedom mobile, but they haven’t been raising their dividend as they focus on improving their network. The entire position was only up 1% since I bought it plus the 4.3% dividend yield we were collecting. This sale brought in around $8,800.
It sucked to sell a position that was dripping every month and will be missed, but from a dgi perspective telus and bce may be the better Canadian telco dividend stocks.
The remaining 2k we decided to use our line of credit and will pay the balance off this month.
All together the 2 sales lost us $446.94 in forward dividend income though….. Ouch!
End
All in All, this wasn’t a post I was looking forward to writing. Destroying that much dividend income seriously hurts and is a big blow. Factor that $223 that was lost from the other car purchase in to and yeah we really are hurting the power of compounding.
Sometimes I think is country living that good? City life and buses doesn’t seem that bad on days like this…….
Looking forward though, we now have 2 reliable, long term cars for our family and still no car payments. Its time to put on my big boy pants and get that dividend income back up.
Civ Nation Baby!
What are your thoughts?
Would you of sold off some stocks or financed? Should I of sold different stocks? What has been your best car?
Cheers!
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
Hey Rob,
At 6%, I think you made the right choice. Think of it as equivalent to being able to buy a risk free government bond yielding 6%: wouldn’t you jump at the opportunity to do so in this environment? The only difference here is that instead of buying the bond to get the cashflows, you are in a sense “buying back” the financing cashflows you would otherwise pay by forking over the cash up front. I love my stocks, but it would be pretty risky to assume that they will earn you more than 6% (remembering that you would pay your loan with after tax income) over the duration of the loan.
I don’t follow the names you chose to sell, although I am a Freedom customer (on a grandfathered plan where I pay $39 for unlimited everything plus unlimited US roaming). I do agree that I would take Telus and BCE over Shaw in the mobile space, so kudos in keeping those names (full disclosure: I own both).
I’m the polar opposite of you in a sense in that I live in the city beside good rapid transit, so I don’t drive much. But the new wheels sound solid! And I definitely support the inclusion of heated seats. These things are a game changer when it comes to comfort in our climate.
Take care and enjoy the new wheels.
haha
Dam John im jealous of your phone plan! That is amazing.
Glad to hear you agree about the sales, I know i was hearing arguments from both sides of the fence.
No payments is really simple, i like the kiss approach.
gotta love those heated seats.
Go leafs/Raps Go!
Congrats on changing the car for the 2013 model. Good thing you didn’t buy the 2012 model because it was a crappy release. I remember how civic enthusiasts were complaining about it, but Honda quickly reacted and made improvements in the 2013 model. Enjoy the ride. It should serve you well for the next 10 years.
wow German
You know alot about cars! Great to hear as i was looking at a 2012 that was cheaper but couldnt get the bluetooth to work and was a burgandy red color which i hated.
Glad i made the right pick!
cheers man
Hey Rob. My wife’s car is a 2006 Corolla. Like you, hoping to milk a few more miles out of it. When we need to replace, I have been thinking about a Honda CRV EX-L AWD compact SUV. Our other car is a 2009 Camry and we need something with a little cargo space. Tom
hey Tom
My wifes first caR was a Corolla, also a great car!
The crv sounds like a nice pick. Suvs are nice for their extra space for sure. Great for camping.
Hope your car continues to roll along for ya.
cheers!
Hey Rob,
It sucks to hear that you had to sell some stocks to purchase a car but I think it’s a good decision to pay in cash instead of financing it. At least you were in a position to have a choice!
You probably won’t be familiar with the car our family has – 2009 Skoda Fabia. I don’t think they are selling in North America. I bought it from a friend for 3000 EUR and couldn’t be happier with the choice.
Good luck with your cars. Hopefully you won’t experience any more big car expenses in the near future!
BI
hey Broke
Yeah i feel the same. Glad to not have any monthly car payments.
I think I have heard of that car when I went to europe. Its crazy how Europe has all these small cars but here in North America we have big suvs……
Hoping there wont be any big car expenses for a long time.
cheers
Congrats. Feels good to drive a newer car, right?
So many people drive civic! My husband’s civic was more than 18 years old, older than yours. We debated for buying a newer car for a few years. Finally we decided beginning of this year to buy a brand new Nissan Leaf. Here in BC we can scrape the old car and get $6000 if buying a new EV. We got another $5000 from government. But we still end up paying $37K from pocket. But my husband now can drive on the HOV lane, which is the deciding factor for us to do it. The new car feels so good with so many useful features. We also save lots on gas as my husband charging it with public charger.
We paid the car with cash. Well, I think it’s better to have a new car than having the cash not invested. I was not brave recently and did not buy anything yet this year.
hey May
Yeah for sure! Its crazy the difference it feels to drive a newer car. So many nice options and a lot smoother now since I was driving with those broken struts for awhile.
Congrats on the leaf. Did you have to upgrade your electrical to 200 amp service for the plug in?
Its so nice to hear what BC is doing to promote green energy. Its sad to see how much the provinces vary on these issues. Here in Ontario Ford keeps cutting shit and just cut a program to replant 50 million trees….
That stuff drives me nuts. Arg!
Anyways congrats on your new car as well. This market is crazy these days but you should be slowing investing that money. If you got room in your rrsp 3m just had a nice pullback. I might be deploying some cash there soon.
Cheers!
Yes. I should deploy the cash especially cash is piling with our frugal life style.
So far we managed to use majorly the public free charging station without having to install a charging station at home. We are reluctant to install charging station at home unless absolutely necessary as looks like quite a few holes need to be drilled.