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How to get the best deal on a new car.

Deidre Plotnick August 05, 2020
Young happy couple holding up car keys in front of car in car dealership.
So you’ve been busy saving your money, doing your research and now you’re finally ready to buy that new car. How exciting! Now comes the tricky part: knowing when and how to get the best deal. Closer to the end of the year is a good time to purchase last year’s models since new car models come out at this time and dealerships are trying to clear their inventory. Also, by doing a little legwork up front and visiting the car dealership armed with some handy tips up your sleeve, you can maximize the amount of money you save and drive off with a great deal on your new car.

Have a pretty good idea of what you want before you set foot in the dealership.

Before you even start to think about negotiating on a new car, you should be pretty sure about which car you actually want. If you’re still not sure the list below can help you narrow down your options. 

  • The size of your car. Do you need space for kids? Want room for cargo? Do you need to consider what size car will fit in your garage?
  • The type of car. Do you need front-wheel, rear wheel or all-wheel drive? Will you be driving on city streets or rugged terrain? The types of driving conditions you will be facing can help guide your decision.
  • Gas vs. electric. If you favour gas, would you benefit from the fuel efficiency of diesel model for highway driving? If you’re considering going electric, do you have somewhere to charge your car overnight?
  • Must-have features. Make a list of the non-negotiables that you absolutely want to have in your new car. Maybe you can’t live without power steering or heated seats. Or maybe you really want a sunroof. These features can help narrow down your choices, as some car models may not come with them.
  • Your budget. If you are financing instead of paying for your car in cash, a car loan calculator can help show you what your monthly payments would look like. Your budget will also help reign you in, when choosing car accessories at the dealership.
  • Specific brand/model. Hopefully, answering all of the questions above has started to lead you towards a specific vehicle brand and model. This will be key to know, in order to point you to which dealership you start at.
Hip older woman leaning over to hug front of orange car

Know your prices so you’ll be able to tell when “the price is right”.

Prices can vary between dealerships, so while it can be time consuming, visiting several dealerships may be worth the effort. When comparing prices, be sure to compare apples to apples, by making sure cars have the same features. Also, don’t forget to account for all those hidden fees such as interest rates (if you’re financing your new car), vehicle registration and even car insurance (see ways to save on this below). Knowing what hidden fees you will facing will help avoid sticker shock later on.

Know when the time is right to buy.

The end of the month is normally the best time to buy, because that’s when salespeople are scrambling to meet their monthly quotes. As for which month to purchase, new car models normally come out in September, making that a good time of year to purchase last year’s models since dealerships are looking to clear their floors of inventory. The end of December is the ideal time to double dip on discounts: you can walk away with year-end and end-of-month savings!

Wait for dealership sales.

Individual dealerships often provide deals such as low financing rates, rebates, add-ons, free service offers, free monthly payments and more, so while you may be excited about the prospect of buying a new car, it can pay (literally!) to wait.

Young Asian woman sitting cross legged on couch in livingroom working on laptop.

Don’t reveal that you have a trade-in until the very end.

Think of your trade-in as your secret weapon, and keep it hidden until the last minute. The goal is to negotiate the lowest possible price for the new car, and then see how much “credit” the dealership will give you for your current vehicle. Fair warning: because dealers want to make a profit on selling your used car and they have to invest the time to resell your car, they likely won’t offer you top dollar for it. If you want to cut out the middle person and have the time and energy to invest, it may be worthwhile listing to sell your car privately. To see what your car is really worth, consult our automotive experts for auto advice.

Don’t get caught up in all the shiny extras.

Things like rust, paint and fabric protection add up quickly, so think about whether you really need them. Today’s paints are pretty long lasting, and interior fabrics are pretty durable. Plus, you can always buy fabric protector from Home Depot and also earn back CAA Dollars when you shop online as a CAA Member. Think about how long you intend to own your new car and whether you really need those extended warranties. You can also help keep your car rust free by having a company like KROWN Rust Control apply the protection, plus as a CAA Member, you can save.

When the price can’t go any lower, raise the ask for “free” extras.

There will come a point where the dealer tells you that they just cannot go any lower. This is your cue to start asking what the dealership can throw in for free. Pre-paid oil changes have a high dollar value. Other car accessories to ask for might be your first service appointment, car mats, a trunk organizer or extra remote keys.  

Stack your savings for even deeper discounts.

Search for additional discounts that lets you stack savings on top of dealership sales. For example, you might receive a special VIP offer sent directly to you as a select client, or via and affiliated partner or program. If you get a special offer by mail or email, see if you can stack it on top of the sales prices being offered during sales. A good dealership will let you combine these.

Seated young couple going over contract with car salesman at table in car dealership.

Make sure you have the right auto insurance in place.

The best auto insurance isn’t necessarily the lowest priced one. Providers like CAA Insurance offer perks and benefits that amount to extra value for you, plus you get extra savings if you’re a CAA Member1. If you don’t anticipate driving a lot, you may want to consider CAA MyPace®; it’s a pay-as-you-go insurance payment program where you pay only for the mileage you drive - this could add up to big savings in your favour.

Now that you have a bunch of tips on ways to save while negotiating your new vehicle, it’s time to visit the car dealership, take that test drive if you still need to and put your name on a shiny new car. Happy driving!