Canadian Personal Finance Blog

This past weekend, I got to enjoy an out of town tournament with my daughter and we had a great time as usual, however, there was one incident that marred the weekend a little.

The parents typically get lost easily (I include myself in that group), so we typically convoy to gymnasiums from hotels so we don’t all get lost. I had a small convoy behind me, and just as we came off a parkway in Hamilton, we came to a set of lights. We stopped, the light turned green, I turned left chatted with my passenger, looked in my rear view mirror and my convoy was gone!

That was very strange, but we went on to the gym, and I called the members of the convoy to find out whether they had turned left to go to a Tim Horton’s or the like. No, the car behind me “dropped” it’s transmission as it’s driver put their foot down on the accelerator. My heart sunk when I heard that because that is one of my pet paranoia’s (car breaking down in strange city).

This Dad luckily had roadside assistance, so he got it towed to the dealership, who declared the transmission “Dead on Arrival”, and gave him three options:

1. Replace with brand new transmission
2. Replace with rebuilt transmission
3. Walk away from the van

This Dad wasn’t sure what to do, so he rightly decided to take a rental and figure out what to do and deal with it on Monday. Now over the next 24 hours, the Dad made a plan and decided to go with option (3) and not put good money after bad in this situation. He will find another car, and deal with it, instead of attempting to nurse this old clunker any more.

How the Heck do you Decide?

When do you pull the plug in this situation. This Dad did the right thing, he deliberated, called his wife, discussed it with her, they made a plan and are executing it, but I am always amazed when people can make that decision.

I can look back on decisions I have made and figure out whether they are right or wrong, but only in hindsight, making a BIG decision like, “let’s push the car off the cliff” causes me to go into decision brain freeze. I sit there make lists argue all sides of the decision and then usually don’t decide, or procrastinate. Luckily my mechanic is very honest and makes the decision for me (i.e., “Alan this thing is a death trap and I am not fixing it any more, go get another car”).

How do you decide when it is time to get rid of a car? When is “enough” money spent on a car?

With the purchase of a smaller more reliable car, I now start to ponder whether it might be cheaper to have two small cars instead of having a small car and a Van. My wife and I have this discussion regularly and I am still curious to know whether cost wise it might be cheaper to drive two Corolla sized cars and rent when a van is needed?

I guess the parameters you need to look at are:

• How much did the two cost together. I am assuming I would buy another used Corolla-like vehicle, so the two small cars win here (over Van + small car), except that my Van is actually paid for right now, so the numbers for me are a little different.
• Maintenance costs, and this is where I may end up driving my van into my mechanic and see if he’ll trade it in for one of his used cars. I have a lemon of a van, which if I hadn’t had a long term warranty would have been a MASSIVE drain on my finances. This is the biggest problem, my guess is if I had a more reliable van (say a Honda or a Toyota) I might not be thinking this.
• Day to day running expenses and this is again where two small cars wins, especially with these high gas prices these days too.
• Insurance for the two small cars would be cheaper than Van + Small Car as well.
• The big question is if I had two small(er) cars, how many times would I “need” to have a Van or larger vehicle and how many times I would rent a vehicle for this reason?
• Trips to Grandparents
• Some basketball trips

A very perplexing question, that I am mulling over and would welcome opinions from my loyal and smart readers.

Stress At Work, Unproductive?

Read that one from Stats Canada and went, “I’ll take D’UH for $1500 Alex”. The opening sentence says it all:

Work-related stress has a direct bearing on the current and long-term productivity of Canadian workers in terms of reduced work activities, disability days and absenteeism, according to a new study.

Oh really? I would never have guessed!

New car sales are down in September? Could higher gas prices have something to do with that?

Sales of new motor vehicles declined in September, almost completely offsetting the gains made in August. Seasonally adjusted data from the New Motor Vehicle Sales Survey show that 140,263 new vehicles were sold in September. This represents a decrease of 2.1% from August.

Me, I bought a used car, just because I don’t need a new car, but I did need a good car.

Economy Resilient

Output and employment continued to expand steadily, unfazed by the late-summer turmoil in credit markets and the rapid ascent of the Canadian dollar.

The resiliency of the economy reflects a number of factors. While the turmoil in financial markets disrupted commercial paper in August, total short-term business credit grew steadily in August and September as borrowers switched to other instruments. The stock market recovered in September and October from small losses over the summer.

The Canadian economy is resilient, I can’t argue that, but I still am concerned about the ramifications of a strong Canadian dollar has not “passed through” the economy yet (in my opinion). I believe a bunch of manufacturers are “holding on” and hoping for the dollar to drop off so they can recover. Manufacturing may be OK, however, if their main market is NOT the U.S. (read China and Europe). We shall see in a year where the economy is.

Leading Indicators Up Too

The composite index rose 0.1% in October after a downward-revised gain of 0.3% in September. Of the 10 components, 6 increased, while 4 declined, the highest number of components to decline since October 2006. The weakness was concentrated in housing starts and new orders, which returned to more normal levels after exceptional gains in September. Growth was sustained by consumer spending and the financial sector.

This is interesting to me, as things seem to be slowing down, but not as much as I would have thought as well.