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6 Essential Tips to Consider Before Buying a Car

In the market for a new car or truck? Consider our research tips to get the best car for your budget.
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Buying a car can generate all types of emotions and fear is definitely near the top of the list. Consider these research tips the next time you’re in the market for a new or used car so you get the best car for the best price.

What are we afraid of?

It’s no wonder many folks are apprehensive about shopping for a new car or truck: Vehicle purchases are the second largest (and longest) financial investment we make next to real estate. That’s a lot of hard earned, after tax dollars to fork over if you want to own and operate a vehicle in Canada.

Although new vehicle retail prices are fixed from the manufacturer, the amount you actually pay for that new car or truck can vary by hundreds or even thousands of dollars from one dealership to the next. Factors such as the availability of stock, end of model clearances, rebate programs, trade-in value or how motivated the commissioned Salesperson is to sell it to you, all contribute to your final price.

RELATED: Negotiate your way into a great car deal

Used vehicle shoppers suffer a different kind of anxiety as no two used cars or trucks are identical, so that makes price comparisons difficult. Used car shoppers may be armed with a Kelly Blue Book or the Canadian Black Book to help determine a ball park figure, but it’s factors like mileage, wear and tear, options, and how much the Dealer had to spend to get it retail-ready that will determine a used vehicle’s one-of-a-kind price tag. The Canadian Consumer Handbook has specific information about what to look for when shopping for a used or previously owned vehicle.

buying a car at a new car dealership

You can take the fear out of car shopping by doing some in-depth research before you venture into the world of commissioned salespeople and 0% financing deals. The more you know about the type of vehicle you need (and can afford), the better you’ll be able to guarantee you get the right car for the right price for your budget.

Research Tip # 1: Determine your needs, wants and lifestyle

What kind of car should you buy? Make a list of needs, such as seating and storage capacity, mechanical or performance specifications as well as any special considerations like height restrictions, towing capacities and fuel mileage to help narrow it down.

Next step, list your wants (nice-to-have features) like upgraded surround sound system (that might be a need if you love music), sunroof or heated seats (most definitely a need in Canada), etc.

Here are the major categories of vehicle options to help you compile your list:

• Seating: Bench or bucket seats, split folding rear seat, 4, 5, 7 passenger, leather, heated seats, electronic vs. manual adjustments, armrests
• Engine & performance features: Engine, transmission, horsepower, towing, fuel mileage
• Safety features: Air bags, traction control, lane departure warning, back up camera
• Infotainment features: USB, Bluetooth, Wi-Fi, touch screen, iPhone compatible, surround sound, CD player, navigation system
• Comfort & convenience: Cruise control, power windows, power seats, power mirrors, outlets for cell phone charging or other devices, cup holders
• Storage & cargo carrying capacities: Cargo systems, boxliners, tonneau covers
• New vehicle & powertrain warranty: Length, deductible, length of roadside assistance & courtesy transportation coverage, exclusions
Another way to search for the right car for your needs and your budget is to use The Wheels Lifestyle Guide which groups vehicles by their category: Outdoors, Luxury, Family, Performance, Eco Conscious, Workforce or Urban Commuter. There are links to related articles, model overviews, technical specifications and photo galleries.

new car interior

Once you’ve determined the type of vehicle you need based on wants, needs and lifestyle it’s time to determine how much money you have to spend.

Research Tip # 2: Determine your monthly vehicle budget

You may want that high end sports car but your budget may determine you need a compact car instead. Remember to factor in long term operating costs in addition to final purchase price or monthly payment.

You may want to consider the pros and cons of leasing, short term versus long term finance contracts or utilizing a low interest line of credit from your financial institution as opposed to signing up for a higher interest loan through the dealership. If your vehicle is going to be used for business, leasing may be the more cost effective and tax effective option. Depending upon your credit history, you may be able to negotiate a low interest personal loan from your bank as well.

budgeting

Make sure the car payment you have in mind leaves room in your budget for any long term operating costs. $500.00/month might be affordable for a base car payment but remember to factor in the associated vehicle costs such as:

• Car payment plus interest and taxes
• Fuel costs (premium, regular, diesel)
Maintenance, snow tires, and accessories
Car insurance

The average car loan in 2015 is 84 or 96 months, that’s 7 or 8 years. Most new vehicles will be out of their new and powertrain warranties long before the last loan payment is made. Consider your overall financial landscape over the next few years such as housing costs, job security, and the potential for other large expenses to arise. If you leave yourself some buffer room at the end of the month, it may help eliminate some of the fear associated with buying a car.

Be wary of low ball prices in online or print advertisements. An advertised payment for a new car might read $185.00 but the fine print may require a $5,000.00 down payment, is a weekly payment (not monthly) and may be spread over a very long time. Also, the featured vehicle might be a specific model that is equipped with things you don’t want, like a high performance engine which requires premium fuel in addition to a hefty car insurance premium.

Research Tip # 3: Perform an online competitive comparison

It’s a good idea to compare 2, 3 or more different brands within the same vehicle category to find the right ride for you. Some Brands simply provide more value for the dollar than others. However, the term ‘value’ is subjective and doesn’t mean the same thing to everyone. Keep your list of needs and wants close by as you check the feature list of one brand against another to see the value according to your own criteria. For example, certain packages may offer added value by including a feature you really want for no charge.

Furthermore, you can consult Consumer Reports to find vehicle ratings (for both new and used), overall score from a variety of tests and observations, recall notifications, reliability reports and owner satisfaction scores. You can also check out IIHS: Insurance Institute for Highway Safety where you’ll find crash test ratings and the top safety picks per model year and per vehicle category.

The Wheels.ca new car research section provides online vehicle shoppers with an opportunity to compare models with an easy-to-use add to compare link.

2015 kia soul

Here’s an additional tip for researching competitors:

Be sure you’re comparing apples to apples, trim level to trim level. If you’ve clicked on a base model Honda Civic and are comparing it with a loaded Mazda3 for example, it won’t be accurate or fair. Start by checking off the base model of each vehicle in the comparison. You can always build in extra features once you’ve established a baseline. A thorough competitive comparison should include all vehicle specifications and dimensions, standard vs. optional features, warranty information, reliability reviews and price.

Once you’ve narrowed down the list of potentials to a few real possibilities, it’s time to research the dealerships in your area who sell what you’re looking for.

Research Tip # 4: Research the Dealership

A dealership’s reputation, location and hours of operation are all important things to think about when you’re considering where to buy your new car or truck.

Most brands are available in large quantities in major cities whereas small to mid-sized towns have less new vehicle inventory to choose from. If your favourite dealership doesn’t have the exact car you want, they may be able to locate one and dealer trade it (trade one of their cars for the one you want with another Dealer) at no additional cost to you, so don’t eliminate them from consideration if you don’t see a particular car on their website.

Auto Malls have become a popular car shopping destination as multiple brands are grouped together in close proximity, which makes the car buying experience a little more convenient than driving from one end of town to the other.

buying a car at a new car dealership

Determine what’s important to you in a home dealership beyond who quotes the cheapest price. The potential for a long term, trusted relationship with a dealership and their staff who offer excellent customer service beyond the sale might be worth consideration in addition to:

• Convenient location and close to your place of residence or workplace

• Visit the dealership’s website to see how user-friendly it is, if they have their stock online to view, or if you can make a service appointment online if that’s important to you

• Check the dealership’s reputation for sales and service. Yelp.ca is an online forum where customers post reviews of dealerships they’ve done business with

• If you’re a social media user (Facebook, Twitter) consider posting to your followers and friends to ask if anyone can recommend a trusted dealership in your area

• Consider the availability and cost of maintenance services provided by the dealership. Some vehicles come with free maintenance for the first few years of ownership (oil, lube and filter) while others don’t. Additionally, some service departments have an express oil, lube and filter lane where you don’t have to make an appointment while others require an appointment in advance.

Research Tip # 5: Ask for a vehicle presentation and a test drive

You will be able to determine if you’ve found the right vehicle for you once you’ve spent some time sitting in it, demonstrating the features and after you’ve driven it.

Ask the Salesperson for a walk-around demonstration of the vehicle you’re interested in so you can learn more about its features before you drive it. A product presentation in the showroom will give you an opportunity to see and explore the front end, the engine compartment, passenger side, back seat, trunk and driver’s side. See if you can picture it in your life, in your driveway, or driving it to work every day after getting to know each part of the vehicle.

dealer pointing out tires to customer before buying a car at the car dealership

Here are a few other tips to consider when at the dealership:

• Be sure the Salesperson takes you out in the vehicle you’ve asked for. If you’ve expressed an interest in a base model and they bring a fully loaded one to drive instead, it won’t give you a fair representation of what you’re in the market for

• Request the test drive route include a combination of city streets and highways so you can check for things like acceleration and braking, overall handling, blind spots and wind noise

• Make yourself comfortable and check your visibility and seat position. If you can’t get comfortable in the seats, reach the pedals , see into blind spots or read the information on the digital screen during a test drive, it’s not going to get any better once you bring it home

Once you’ve decided on the right vehicle for you (wants, needs, lifestyle and within budget), it’s time to negotiate the final deal.

Research Tip # 6: Negotiating the best price

Good communication is key when negotiating a fair price for the vehicle you have your heart set on. dealerships are in business to make money and sell cars, but they also want to build a long term relationship with their customers so they return time and time again. Trust is important, as is being open and honest about your needs and your budget. If you communicate these things early on in the sales process, a professional Salesperson will work hard to earn your business by helping you find the right vehicle within your budget.

Value vs. Cost infographic

Consumer Reports offers an informative article about how to negotiate a new car price effectively in three simple steps:

• Do your homework
• Set the rules
• Hold your ground

Here’s something to remember about any ‘extras’ you’re considering during the negotiation process.

Every extra option you add on will be subject to interest over the entire term of the loan. For example, a sunroof may only be $10.00 more per month and the bigger wheels only $20.00 more per month, but multiply it by an 84 month car loan, plus interest and taxes and you’ve just spent an additional few thousand dollars.

When you empower yourself with research about the vehicle you want to purchase and know how much you have to spend before you go car shopping, you’ll take the fear of the unknown, out of the vehicle purchase process and turn it into a fun adventure. Besides, the car business holds the last piece of the historical Wild West’s horse-trading days. The only difference between the Centuries is, instead of bartering over four-legged Mustangs and Colts we now barter over their horsepower instead.

Happy horsepower trading!

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