Do affordable starter cars still exist?

“But I do think that’s a quality pool of used vehicles,” Bettencourt said. He would only buy privately if inspection by a mechanic was part of the sale contract.

Subsidies for electric vehicles

As for electric vehicles, the federal rebate was just halted in January, but there are provincial subsidies remaining in British Columbia, Newfoundland and Labrador, Nova Scotia, Yukon, New Brunswick, Prince Edward Island and Manitoba, Bettencourt pointed out. Pre-owned is still a valuable option for this segment, he added.

“The resale values of EVs have tended to depreciate very quickly, so that provides, in a way, more of an incentive to buy an off-lease or a slightly used EV because of that high depreciation,” Bettencourt said.

How to deal with common sales tactics

As for the shopping experience, Wallcraft said a salesperson at a dealership will likely ask what monthly payment you can afford—but she calls this question a trap.

“What the salesperson is doing when they ask you that question is they’re going to try to find the most expensive car that they can talk you into,” Wallcraft said, “and give you a really long financing term so that monthly payment is low enough that you can afford it.”

Lately she’s been hearing of nine- and ten-year financing terms, which are relatively new but she expects will become more common—especially with a lack of affordable starter cars on the market for young people to buy.

The problem with a long financing term on an asset that depreciates quickly is that serious problems could arise or your needs could change before you fully own the vehicle, Wallcraft said. If your car suffers a catastrophic failure, your lifestyle changes, you move, you partner up, or you have kids, you’re still making payments on a car that’s not working for you.

If you still owe money on the car when it needs to be replaced, “that’s how you get into the trap,” Wallcraft said. “Because then you’ll go into the dealership and they’ll say, ‘We can roll what you still owe on your financing into your next car.’ Well, now you owe that much more on your next car, and it takes you that much longer to get back up above water.”