From the Readers

Reader Question: Tips For Buying A New Vehicle In Canada

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Every Monday I have a look in the mail bag to see what the readers want to learn about. In the past week we received many questions but this question is one of those questions that need to be answered. Vehicles can be a source of pleasure, security and optimal for all sorts of trips and destinations depending on what you get. It can also be a money pit and it’s important to know your stuff before you set out looking for a new vehicle.

Here is the Reader Question:

Dear Mr.CBB,

We’re just starting to think about buying a new vehicle. Do you have any advice or tips in this department?

First off, don’t be afraid of sales people as they are harmless. They have a job to do and are out to make money, it’s no secret. They know it, and you know it. The name of the game is who’s going to crack first or can we meet in the middle. You have to realize they need to make money that’s why they do what they do. You can’t walk away with all for nothing and shouldn’t expect that. Salespeople need to put food on the table just as much as the next guy/gal.
Here are some tips I’ve learned since moving to Canada and buying my first Truck!
  • Pick a style/size of car/truck depending on what your needs/wants are. Getting a Cadillac Escalade to drop the kids off at school may look bling but you’ll never be able to buy the kids shoes and clothes for the rest of the school year. Never buy the bog standard base model, it will always have less resale value further down the road.
  • What kind of warranty do you want? Some companies such as Ford run a standard 3 year warranty across the entire vehicle with an extra 2 years on the powertrain, other companies go a little further. Dodge (Chrysler) give out 7 years warranty on the drivetrain, Mitsubishi have a 10 year warranty on their drivetrain. All warranties will have a list of things that are and are not covered, read it. It will also tell you if you need to keep your end of the bargain and pay for certain service work to be completed to keep the warranty valid. If I’ve lost you a little, powertrain is the same as the drivetrain and includes engine, transmission, driveshaft/s, wheel ends, but not tires.
  • Fuel efficiency is big news lately, back in the UK every model of car has a range of engines just like here but there’s always a diesel option too. Make no mistake Diesel will get you further for less as will smaller rather a larger vehicle, but as in the case of just about everything there’s always draw backs. Diesel vehicles don’t like the cold at start-up as they are “heat engines” so you’ll be plugging in the block heater or relying on the intake heater to start it in the morning. Small cars are great to blast round town in but completely useless if you want to go on a family camping vacation.
  • Manual vs Automatic- take your pick, personally I’ve always driven manual transmissions, you’ve got far more control over the vehicle. As for the fuel efficiency, not a lot in it, these days most automatic vehicles will make no more of a dent in your wallet than a standard. All Wheel Drive (AWD) will however crucify your fuel as will 4×4, so if you don’t need 4×4 switch it off. As a side note 4×4 is not the same as Traction Control.  If you’re driving down the 401 in the middle of winter at 120kph 4×4 will not save you in icy conditions. Front wheel drive cars tend to be easier to control in snow than rear wheel drive.
  • Take it for a test drive, is it comfortable? Does it handle well? Do switches and everyday essential controls make sense? Think of it as trying on a pair of shoes, if they don’t fit properly you try on a different pair. Take someone with you who’s not biased on the car buying experience. They’ll be able to point out things you probably won’t notice. Is the engine struggling to propel the weight of the car? Some models will have a base engine that struggles under the weight of the vehicle it sits in.

An example of an under powered vehicle is the Ford Ranger Pick-up with the base 2.3L 4 cylinder engine. It’s not that everyone needs more power, it’s the fact that an engine always run on its limit isn’t going to do it much good over time. There are forums on-line that discuss makes, models and engine performance that usually have contributions made by the mechanics/technicians that work on them on a regular basis.

  • Want to protect yourself or your loved ones, check the crash rating on it….better to be safe then sorry.
  • Undercoating/Oil spraying for those months of salting the roads is always a good idea. It’s not just the underneath of the floor pan that’s going to get salt thrown at it, there’s a spaghetti factory of wiring that gets hit as well. My advice…don’t get the supposedly “$500 worth” of spray they use at some dealerships. Do yourself a favour and get it sprayed by Krown. It will set you back approx $130 a year and they spray inside the doors, the wiring, the engine compartment the Full Monty. It will drip and migrate across the car so watch your driveway or garage floor. The idea being that it fills in the spots that get worn off over the winter months.
  • Fluff- See what you can get them to throw in to beat the competitor or to make it a solid deal. ie- gas discounts for a year, snazzy rims, nitrogen filled tires other odds and ends like accessories for the vehicle. If you can get a set of winter tires on steel rims in the price you’ll be laughing.
  • Go to dealerships on a slow day, don’t be afraid to go to dealerships out-of-town either.
  • You can also contact dealers via the internet for quotes on vehicles or use the telephone. Some manufacturer websites will allow you to virtually build you a car on-line by choosing all the different options and then giving you a purchase price at the end.
  • Know all the current discounts by visiting the dealership website so you’re informed before you go.
  • How much are you willing to spend on a payment each month including interest, maintenance, gas etc- How much does an oil change cost? What happens if parts need replacing after the warranty runs out, are they costly? What is your budget?
  • Check with your insurance company and let them know the make, model and colour you are looking for so they can give you an estimate rate. You don’t want to buy your vehicle then find out your insurance is more than your monthly car payment.
  • If you really want to do your homework Car Cost Canada will share with you for only $39.95 Dealer Invoice cost and a tonne of other useful information that you will want to have. You will find out what the dealers don’t want you to know and what incentives you might be missing because they aren’t telling you. It’s one of the best ways I’ve seen to make a fair market decision when you have the real numbers. Don’t forget to take the report with you so you have solid numbers to negotiate with.
Finally, negotiate all aspects the price of the vehicle. Never tell them what your top dollar is so you have wiggle room. Let the sales person do the talking and think before you answer. Why do they want to know the information they are asking me? Make sure you have questions ready to ask them as well. You want to come to an agreement that is fair for both the salesperson and yourself.
Some examples might be….
  1. What will you get if you trade in a used vehicle? This way you will have an idea whether it make more financial sense for you to sell your current vehicle privately or use as a trade in?
  2. What are the financing charges (if any) even better is 0% financing?
Look at the overall picture, not only the initial cost but also the cost of ownership. Just because you can afford to buy a gas guzzling V8 muscle car doesn’t mean you can afford to run it on a daily basis. Take a day or so to think about whether you are making the right purchase. There’s no rush to buy a vehicle unless you are in a rush. Don’t let anyone push you around or tell you they can’t hold a deal for you. If that’s the case, walk away. There’s more than one dealer willing to open up the lines of negotiation to sell you a new vehicle.
What other tips do you have for our Reader Question of the Week?

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  1. And don’t get strong armed into making a snap decision. If they want the sale, they’ll quote you a price that’s good for a few days so you can shop that price to see if you can get another dealer to beat it.

  2. Different companies also offer a discount if your business is affiliated with them. Sort of like employee pricing. There are also times when family and friends discounts apply. We both went to the dealership separately and together to see if there was any difference in pricing that was offered. Oh, and made sure that any offer was written down on the back of the salesperson’s business card to be able to fall back on what they gave us and who it was that did so. Made it easier to keep track of. :).

    1. Hi Tara!
      Good points.. especially about getting the quote in writing as you certainly wouldn’t be make a huge decision like that on the spot. Mrs.CBB did get the employee pricing through a friend who worked at a dealership so yes that’s a good point about family and friends. Cheers Tara!! More great tips for people looking to buy NEW!

  3. A lot of great advice in this blog Mr. CBB! It is true that salesmen as a whole really don’t make a lot of money when selling new cars so they don’t have a whole lot of wiggle room with price. If you want to try to get the best price I have a couple of extra tips. Try shopping the last week of the month, salesmen will sometimes have a quota with an added bonus so if they are behind on the number of sales they need, they may give you a better price. Also consider buying towards the end of the model year, especially when a new designed model is coming out, dealerships will be trying to get rid of their stock to make room for the new models so you can probably get it for a better price.

    1. That is why I love it when the readers post their comments because there are always ideas that I may forget or simply am not aware of. Both great tips Joanna and I would have never thought about the quota but certainly forgot about the end of year pricing.. good points. Cheers Mr.CBB

      1. I also meant to add that I love that you bring up the topic of maintenance. It amazes me the number of people that buy a new car and think that all they need to worry about is putting gas in it. The vehicle needs to be maintained and no, maintenance is not covered under warranty, it is something you have to pay for. Get an idea of what the maintenance schedule is, how often it needs to be done and how much it will cost. Talk to the service department, find out what the average mileage is for brake replacement, tire replacement etc. Just keep in mind, the cost of the car doesn’t end at purchase. When buying a new car, try to get the salesman to throw in the first oil change for free as part of your negotiations.

        1. Yep, the more fluff the sweeter the deal. I’m sure many people will learn from everything we are writing in the comment section of any blog post. maintenance for cars can be outrageous especially for a new car when you have a schedule to follow not to void the warranty. Mr.CBB

  4. I hate buying cars as I am always afraid of making the wrong decision. In my late teens (I graduated from college and had my first full time job pretty early) I bought my first new car (I had purchased a used one with my dad’s help prior to that to get me back and forth to school). I test drove a lot of cars (even a Honda) and settled on a Dodge Neon (2000). It was 0% financing which I thought was amazing at the time, later realized that it’s not all its cracked up to be. My payment was $346/month. I paid a little more each month and paid it off a few months early just to get it over with. So in retrospect I might not do 0% financing again as I probably paid more on the car in the long run. Two years ago we both needed new cars. I bought a used minivan at a dealership. It seems to be ok. I just wonder if I could have gotten a better deal if I had looked around longer and done more research. Ken bought a 1 year old model at a dealership through a family friend and I think he got a pretty good deal. It has resale value as it is fully loaded with leather interior, sunroof, etc. I think my van is pretty basic. I’ll probably never buy another new car again, so I am glad I got it out of my system when I was young. Used is the way to go.

    1. Yes my truck is used but I paid cash for it and it has resale on it. Mrs.CBB bought her vehicle brand new for 0% financing $32k and paid it off in 5 years at $417 a month and 6k down. She negotiated all sorts of deals and picked it up also at employee cost… she’s a bad ass when it comes to negotiating and research. It’s so important. Not all people should go it alone when it comes to vehicles but that’s a whole other post.. unless of course you know exactly what’s going on.

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