How to drive the best deal around
The three great essentials to achieve anything worthwhile are: first, hard work; second, stick-to-itiveness; third, common sense.
In answering a question about his lifelong accomplishments, Thomas Edison said, “The three great essentials to achieve anything worthwhile are: first, hard work; second, stick-to-itiveness; third, common sense.”
The American inventor could very well have been speaking about what it takes to get a good deal on a new vehicle.
I worked briefly as a car broker, and I gained some insider knowledge that I can pass on to you about how to get the best deal possible on your next new vehicle:
Nail down what you need
The first question I asked my clients was, “How much do you want to spend?”
There’s no use shopping with Bugatti tastes, if you’re on a Buick budget. You’ll end up wasting your time â€“ and everyone else’s.
Don’t let your heart win out over your head. Be honest. Truthfully assess what type of vehicle best suits your needs.
There’s no use getting a two-seater sports car if you need to haul your kids to hockey practice.
What are your priorities between styling, economy, performance or utility? How many kilometres do you drive per year? What’s the breakdown between city and highway driving? How many people do you regularly need to carry? Will you need to tow? Will it fit in your garage or parking space? Do you really need all-wheel drive?
Get down to a short list of two to three competitive vehicles.
Working with a Plan B or C will tell the salesperson you have done your homework and give you negotiating flexibility and clout as a serious buyer.
Do your homework
These days, there’s no need to rely on a salesperson’s word to know if you are getting a good deal or not. Except for internal manufacturer-to-dealer incentives, all the information that sales people have at their disposal is also available to consumers online.
Most automaker websites will let you “build” vehicles online. Calculators let you play with downpayments, trade-ins, plus options on interest rates and lengths of terms.
The best sites factor in all vehicle costs. Even if two vehicles have similar MSRPs, destination charges, residual amounts, fuel rebates or penalties, such things as administration fees and taxes may significantly alter your final price.
To find out how much room you have to negotiate (the difference between what the dealer paid for the vehicle and its advertised MSRP), for around $40, Car Cost Canada (carcostcanada.com) lists Canadian car prices in Canadian dollars as well as the dealer invoice prices and rebates.
Supply and demand rules
In a competitive market, dealers need to move slow-selling metal by offering high incentives. This means new models, low-volume ones and popular vehicles will carry higher finance rates, and few (if any) cash incentives.
Like video games and DVDs, if you don’t have to be the first on your block to get your next vehicle, wait three to six months and reassess your desires.
Tally up the trade-in
It’s an effective way to reduce your pre-tax cost on a new vehicle. But factors such as a vehicle’s condition, popularity, where you live and the new-car dealer you are planning to buy from, are all variables.
VMR Canada (vmrcanada.com) tracks both wholesale and retail transaction prices for used vehicles between 1994 to 2007. Classifieds are also a good place to find out what your trade-in is worth.
Also consider: If you’re currently leasing, and the amount you owe the dealer is less than what you can sell it for on the open market, find a private buyer instead of turning in the vehicle to the dealer.
Then get the buyer to write two cheques: one to the dealer to cover the buyout, and one to you for the amount over and above the buyout.
Take a test drive
At the dealership, don’t talk price with a salesperson right off the bat.
Simply go to the receptionist, lay down your driver’s licence and say that you are in the process of buying a new car, but not yet ready to buy, and need to take the vehicle for a test ride.
Don’t feel pressured to only drive the car around the block. If you can, drive the car back home, or where you work to get the same type of driving conditions you would on a daily basis.
If you’ll carry passengers, get in and out of the back seat. Bring along anything you need to haul on a regular basis: baby seats, sports gear or fertilizer. And if time allows, give yourself a day and drive all three potential vehicles back-to-back.
If a salesperson comes along, they should only speak when spoken to. If you get a heavy sales pitch, politely say, “Thanks for the info. But I am also looking at two other competing vehicles and haven’t made up my mind to buy yet.”
The last word: Don’t buy the deal â€“ buy the best car you can afford.
Trust me, driving a “great deal” that doesn’t fit your needs will have you counting down the 47 or whatever remaining months of payments like kids counting down the days before Christmas.