Buying a new or used car is a big decision.
Follow these five tips to make your next car buying process a breeze, brought to you courtesy of Opulent Auto.
Know what you want
You wouldn’t go to the grocery store without a list, ok maybe you would, but when you get home you realize you forgot to pick up milk.
Shopping for a car is a big deal for many Canadian individuals and families, and it is important to take the car buying process seriously and know what it is that you want.
That being said, figuring out exactly what you want in a vehicle should be fun.
Identifying your goals for a new or used car will help make the buying process easier and help you see through the constant sales pitch being fed to you at the dealership.
- Here are some ideas for things to consider in a new car or used:
- What is your price range?
- Any specific colors or features you want in your car?
- Safety features
- Fuel efficiency
- How reliable is the make/model/brand?
- How much are gas and repairs?
- What is the accident, repair and insurance history of the vehicle
Planning your dream car should be fun and informative. It allows you to immediately rule out thousands of cars to save you time in the buying process and makes you seem like a professional buyer who knows what they want when you walk into the dealership.
Consider Your Purchase Options
There are typically three options when it comes to buying a new or used vehicle: cash purchase, financing, and leasing.
Each one comes with pros and cons.
Some quick links to useful tools:
Paying Cash or Buying Your Car Outright
This option works well for those who can afford it and who want a car for the long haul, often 10+ years.
A car’s value depreciates over time, and while banks will consider a car an asset when giving you a loan, it is better to think of your car as a liability.
Over time, things like fuel, repairs, and insurance are more expensive than the initial purchase price of the vehicle.
Buying a car outright can be the right decision if you plan on keeping it for many years and will save you a decent chunk of change as opposed to financing or leasing.
Financing A Car in Canada
Financing a car can be an attractive option when you cannot purchase a vehicle outright because it allows you to pay your car off in monthly installment payments over time.
Financing is different from leasing because at the end of your financing period (typically anywhere from 2+ years) you own the car 100%.
When you finance a car you are also free to drive as many miles per year as you like, and you can sell the car anytime the need arises.
Downsides of financing a car are that you end up paying more for the vehicle.
Down payments typically range from 10-20% meaning that you will be paying interest on the remaining value of the car that your down payment does not cover.
Leasing A Car in Canada
Leasing a vehicle is another very popular option pursued by many motorists.
Many Canadians choose to lease a vehicle because you can get more bang for your buck.
Leases typically allow you to get a newer and nicer vehicle, dollar for dollar, than financing.
You also are not responsible for any mechanical issues the car experiences provided that the damages are not your fault.
The catch is that you don’t own the car at the end of the lease (typically 24, 36, 48 or 60 months.)
In addition, most leases have a mile cap per year that limits the number of included miles you can drive. This number varies widely depending on the lease but anywhere in the range of 15,000-20,000 is considered average.
Here is a link to an auto finance calculator which helps you figure out what is the better financial option for buying or financing a new vehicle.
Know Your History
If you are buying a new or used car make sure you do some detective work and take the car to a third party mechanic that you trust.
- For buying new and used vehicles in Canada:
- Check the accident reports
- Check the repair history
- Compare vehicle prices with a handy fair price tool
- Research potential dealerships for customer experiences
- Consult with the previous owner/s about their experience with the car
- See if you can figure out the past insurance cost of the vehicle to see if it is rising over time
Doing some research beforehand can help you avoid bad deals and put you in the position to negotiate well.
Consider an Auto Broker
Auto brokers help their clients get the best deal on new and used vehicles by being experts in the car buying field.
They are also experts at re-negotiating leases which can save Canadian drivers thousands of dollars per lease.
A good car broker has built up decades of experience negotiating and buying all types of vehicles.
They also tend to have amazing relations with auto manufacturers and prevalent dealers in your area.
Many people are a bit skeptical about using auto brokers due to the often ridiculed auto sales industry. However, it is important to remember that an honest auto broker wants what you do, the best deal!
Take Lance from Opulent Auto Montreal. Lance specializes in savings his customers thousands of dollars on new and used vehicle purchases.
“BMW and Mercedes vehicles are my areas of expertise, I’ve been buying them for over 40 years.”
Savings realized from an auto broker depend on the make and model of the car you intend on buying. Greater savings are typically seen the higher the MSRP of the car.
Lance says it is common that auto brokers can save someone thousands of dollars on the purchase of a new vehicle. They can also help refinance your vehicle, which is an area many car buyers don’t pay much attention to.
“Buyers will fight tooth and nail to save $500 on the sticker price but settle for a financing deal that will cost them $5,000 more than they should have paid over two years,” says Lance.
Don’t rule out a car broker when considering the purchase or financing options for a new or used vehicle.
We interviewed Lance from Opulent Auto MTL to gather information for this article.
Want to get in touch with him about purchasing or refinancing your vehicle in the Montreal area?
Test Drive Any Prospect Vehicles
Always, always, always test drive a car before you pull the trigger on buying it.
This seems like common sense, but with the rise of vehicles being purchased online a shocking 16% of US buyers did not test drive their vehicle before buying it.
In addition, 33% of US buyers only test drove one car.
The test drive is a critical (and fun) part of the car buying process. Each car handles a bit differently and sometimes you get behind the wheel of “the one” and you know that you’ve found your car match.
Test drives allow you to see how your vehicle will actually function day to day and gives you an opportunity to identify any number of concerning sounds, vibrations, and movements a car might make.