Skip Navigation

Negotiating a good deal when purchasing a car

 
Negotiating car sales

In Canada, car sales reached 1.95 million last year, making it the fourth consecutive year sales have topped the previous record. If you're looking to purchase a new vehicle this year, negotiating could save you hundreds, if not thousands, of dollars. Since negotiating isn't a comfortable experience for every car buyer, we've identified a few tips to help you feel more prepared when you purchase your new set of wheels.

1. Know your credit score

If you will be applying for a loan to help you purchase your vehicle (either through the dealership or through a bank), knowing your credit score ahead of time will help you out in a few ways:

  • You'll be able to verify that your record is indeed correct
  • You'll know how much you can realistically afford
  • If you have a high credit score, you'll likely be eligible for a better rate on your loan. If you have a low credit score, this may impact your ability to be approved for a loan

2. Do your research online

By looking online, you can begin process of elimination from the comfort of your own home. The following resources are online tools you can use to become more familiar with the value of the vehicles you're considering:

  • Canadian Black Book – CBB can help you determine your current vehicle's trade-in value, a car's future value (which factors in historical depreciation rates) and the average asking price for a specific vehicle
  • Edmunds – Though an American site, Edmunds can still be a valuable resource in helping determine which car is best for you. The site allows you to compare vehicles, read reviews and give insight into the cost of owning the vehicle
  • Car Cost Canada – For a fee, this site will provide you with the invoice cost of the day—this is the amount a dealer pays. You can also get insight into advertised and non-advertised cash incentives, cash rebates, special financing and other offers you may be eligible for

Know what you want and what you don't want. This way you'll know to say "no" to offers/upgrades that aren't necessary for your needs and "yes" to features that are. It also gives you some negotiating room. For example, if a car on the lot has most of the features you want but is missing one or two, you'll have a better jumping off point for compromise.

It can also help the salesperson at the dealership provide recommendations or alternatives if the car you had your eye on doesn't turn out to be what you had in mind.

3. Get some auto insurance quotes

A new vehicle is a new opportunity for savings. Try getting some quotes through OTIPinsurance.com to have a better understanding of the cost of insuring your desired vehicle. This may help you to narrow down your choices.

4. Make some calls

Once you've figured out the estimated price of the vehicle, including any additional features you want and minus any rebates or offers you found online, call a few dealerships to find out what they've priced the vehicle at.

This is your opportunity to feel out the dealership and decide if this is somewhere you might want to go for a test drive or potentially purchase a vehicle. The conversation may also serve as an opportunity to lay the foundation for the experience, including establishing your budget and expectations.

5. Factor in financing

One common way for a dealership to meet your budget is to offer you a lower monthly payment. Be attentive to these details. Sometimes the financing is stretched out over a longer period of time rather than having a true discount applied. It is recommended to keep your focus on the total price of the car.

Some resources also recommend separating your test-driving days from your purchasing day. This may help you to stick to your plan and not get tempted into unnecessary bells and whistles.

6. Prepare to Negotiate

Salespeople expect you to negotiate, so going into a dealership prepared to make a deal can give you an advantage.

Let dealers know you have done your research and specify that you're willing to pay a reasonable price. Negotiating is a two-way street. Dealers may be more likely to cut you a deal if they feel you are flexible and fair.

Have any questions about how purchasing a new car may affect your car insurance premiums? Call OTIP today at 1-866-523-4111.

 Get a Quote Win with Edvantage - Goodlife Fitness Wouldn't it be Grand. Get a QuoteYour retirement. Your choice. Choose from our 3 RTIP plans and coverage limits - the most flexible retirement health insurance for the Ontario education community.