# Tips for buying a New Vehicle



## 200above (Nov 18, 2010)

Hey everyone,

Unfortunately I haven't been browsing the forum as regularly as I have been in the last 6 months. I've been doing a lot of research on buying negotiations/ tactics to help me buy a new vehicle. It all of a sudden dawned on me, why don't I ask my CMF buddies on some things to look out for and ask for advice.

Here's the current situation.

I've had a newer truck since 2009, and I'm sick of the nearly $700 monthly payments on it. I bought it when I didn't know how to organize or even care about my finances (21). I've since discovered this forum and read many other articles on personal finance and obviously discovered that I've been blowing my money for awhile now, not only on the truck but other areas like life insurance, investment strategies cell phone/tv bills and so on. I've cleaned everything up and streamlined my finances on everything but the final item, my truck. I have successfully sold the truck to a good buyer at a fair price and feel I did ok.

So it's now time to get a new vehicle. I don't want to dwell on the "you shouldn't buy new" debate but more so on how to get the best price on a new vehicle. I do lots of driving so I'm looking at a VW Jetta TDI. I love the gas mileage they get and the research I've done confirms my needs and wants.

Here are some things I'm doing to get the best deal.
1. visiting dealership at the end of the month on a slow day. 
2. do my homework to narrow down the vehicle I want to one specific vehicle to avoid getting the ring around from the dealer
3. I've visited carcostcanada.com and received the MRSP and invoice cost of the vehicle plus the different options
4. discover the dealer incentives/financing 'deals' that are current. 
5. plugging the above in the formula seems to be invoice + 3% markup - rebates = starting point for negotiations.
6. I'm checking with my banks to get pre approved financing in order to negotiate cash purchase
7. the hardest part for me is going to be the negotiations. I'm to nice. But I need to be firm and not move until my I'm at my price. So I've been reading on ways to negotiate better and I actually feel more confident.
8. negotiate each part of process individually. negotiate the price of vehicle, then the trade-in (doesn't apply to me) and then the financing.
9. focus on the cost of the vehicle rather than the monthly payments
10. don't show emotion and hopefully drive away in a nice vehicle at a fair price to me and the dealer.

Am I missing anything here? I feel I got screwed when I bought my truck and I'm not about to do it again. I'm putting 9K down payment as well.

When this is all over, it will set me up nicely for contributing 12% of my salary a month to various investments and still give me lots left over to get back to having a bit more of life. (I've been really cheap lately)

Thanks everyone, and wish me luck!


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## cannon_fodder (Apr 3, 2009)

I went through a similar process last month for my step daughter. Once the vehicle and trim level had been decided I then emailed as many local dealers as I could and mentioned I had the car cost Canada report. 

I told them when the purchase had to be made (within a week) so it was important for them to respond quickly. I created a spreadsheet tracking the dealership, contact info of the assigned sales rep and details about what price they came back with. 

Over the period of two days I went back and forth letting them bring their prices down. I cut those sales people who were not competitive so I could narrow it down to the best 3. 

There is a lot of misinformation and badmouthing that goes on when you find some dealers being very aggressive. 

All negotiations were done via email and phone. The only time I met the salesperson was when we went to sign the deal. Got the vehicle at cost plus they threw in $200 of accessories. Some other dealers absolutely refused to do the deal without making at least $300. And I don't blame them. 

I am in sales so I was always respectful and told them they have a right to make profit. If they want to continue to provide good service they need to make money. Now if a dealership wants to try to make money on the service side even though there is no guarantee I'll use them, then that's their decision. 

Everything worked out great for us. We did not have a trade-in but we did take advantage of playing two financing incentives against each other (another reason why I needed a spreadsheet). 

7 years 0% financing and just a hair below cost = good deal for me.


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## Dana (Nov 17, 2009)

We employ a similar strategy as Cannon. I inherited the strategy from my father (he uses fax, we use email).

I decide exactly what car I want: make, model, interior colour, exterior colour, options, add-ons, etc. then I email several local dealerships and give them a deadline to respond with their best price. Once we narrow down who we will work with, we negotiate price/add-ons/free service appts. etc. 

This has worked very well for us. I am not someone who enjoys making large purchases and this takes some of the stress off of me and transfers it to the salespeople at the dealership. 

I don't tell the dealerships they are in competition with eachother - I let that slip out once when we were negotiating our minivan and the salesperson walked away from the deal.


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## spirit (May 9, 2009)

*Great post*

I am amazed at the dedication to getting a fair deal from some of these posts. Respectful and informed is the way I would like to go through life:I am hoping that I might learn something about buying a used car


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## OptsyEagle (Nov 29, 2009)

Those are all good strategies but just be on the lookout for the salesperson that will pretty much lie to you, give the best price, get you in the dealership and then of course the real price comes out.

Always remember that the auto saleperson's sole purpose for being, is to get you to overpay for your car. Some will compete fairly and others not so fairly. Once this is discovered, please do us all a favour and walk away.

Good luck.

I can't wait until Walmart starts selling cars and we can do away with this garbage process. I cannot imagine it has lasted as long as it has.


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## fraser (May 15, 2010)

We can afford to buy new cars. At one time my employer provided me with a new car every year. 

We prefer higher end products from Japanese manufacturers-even though they may be manufactured in NA. We do some research to short list and end up with 2, sometimes 3 labels on our list. Then we search for a 3- 4 year old, low mileage-no accident cars to satisfy our requirements. We tend to keep our personal cars for a long time (mine is a '97). We did this last year for my wife. Ended up with low mileage car that new would have cost us 40K plus to put on the road. I think our total for this 4 year old buggy was 22K which included about $900. for misc. repairs/upgrades. 44K on the clock and in perfect condition. Due dilligence is essential.


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## canadianbanks (Jun 5, 2009)

I also prefer Japanese high-end cars, as they are usually of high quality and very dependable. I usually get the report from CarCostCanada before buying, which gives me some leverage in the dealership .


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## Plugging Along (Jan 3, 2011)

Have you considered buying a vehicle from the US? We've bought our last 3 vechicles from there (both used and new), and are looking again. I found we're able to save at least 20% after all the costs associated with bringing it in. However, we have found the savings are much more significant in the higher end vehicles.


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## 200above (Nov 18, 2010)

Thanks for the replies. 

I've only briefly looked at importing from the U.S. No doubt, if you can find a dealer and broker to take you through the process it does sound like the savings can be respectable. I personally feel more comfortable buying locally for now.

Now I have have one more problem that I can forsee. I have been in talks with two dealers about meeting and test driving the vehicle. I have not talked to either about their best prices yet or any negotiations for that matter. I'm leaving it for when I show up. Neither one know about the fact I plan on going to one dealership in the am, and the other in the afternoon and my plan is to negotiate each one seperatly. So what happens if I got to the dealer in the am, and we strike a good deal that fits a price I'm comfortable with? Do I say sorry, I like the price but I need to see the price of the other dealer as I told him I would be by to negoatiate? I can forsee the first dealer will do anything to prevent me from leaving, he may even reduce the car some more just to finish the sale. Is this professional? Do I take the offer, or do I still say no I have to go see dealer B? I want to be a proffesional as possible but I also want to get the best deal. 

I personally don't think it is fair to the dealer B who hasn't had a chance to talk with me about price. Any advice? There must be a couple smoooooth talkers in here!


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## OptsyEagle (Nov 29, 2009)

200above said:


> Now I have have one more problem that I can forsee. I have been in talks with two dealers about meeting and test driving the vehicle. I have not talked to either about their best prices yet or any negotiations for that matter. I'm leaving it for when I show up. Neither one know about the fact I plan on going to one dealership in the am, and the other in the afternoon and my plan is to negotiate each one seperatly. So what happens if I got to the dealer in the am, and we strike a good deal that fits a price I'm comfortable with? Do I say sorry, I like the price but I need to see the price of the other dealer as I told him I would be by to negoatiate? I can forsee the first dealer will do anything to prevent me from leaving, he may even reduce the car some more just to finish the sale. Is this professional? Do I take the offer, or do I still say no I have to go see dealer B? I want to be a proffesional as possible but I also want to get the best deal.
> 
> I personally don't think it is fair to the dealer B who hasn't had a chance to talk with me about price. Any advice? There must be a couple smoooooth talkers in here!


Personally, I think you are being way to optimistic on how your experience is going to go. Think about your last root canal and then think about how it would be if you removed the novacane from it and that is more likely how it will feel.

The salesman will never give you a good deal. To do so, would be to cut himself out of the equation. It may happen but it will be a much slower, grinding process (without novacane).

Just my opinion.


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## DanFo (Apr 9, 2011)

Just tell the dealer right away that you will only be evaluating the deal and will not be making a decision at that moment (say you'll have to talk it over with the significant other) they'll prob say stuff like well i have other people coming to look later today or that some deal is only good till the end of the week...ignore those comments (just putting pressure on you to sign a deal)...let them give you an offer.. then you can see what value is in the other dealer's offer and you can use both offers to negotiate within reason...some times they'll phone you back the next day or so with a better a deal if they need the sale, espcially if the cars been sitting on their lot for awhile


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## ChrisR (Jul 13, 2009)

OptsyEagle said:


> Personally, I think you are being way to optimistic on how your experience is going to go. Think about your last root canal and then think about how it would be if you removed the novacane from it and that is more likely how it will feel.


I agree with this.

I went shopping for a new car during the financial crisis when all the car manufacturers were on life support, and every second newspaper headline was raving about the incredible deals to be had on new cars. 

Here are some of great deals I remember:

- the Nissan dealer who insisted on charging a $300 etching fee. This is where they "etch" the serial number onto the windshield, so that in case a car thief scratches out the original serial number, the car can still be identified. (Apparently this is a legal requirement for new car sales in Manitoba, but only on Nissans... or at least they're the only ones who mentioned it...)

- the Volkswagen dealer who offered the astoundingly low price of $800 ABOVE MSRP and a free tank of gas. Apparently $1500 is the cost of shipping the car from Mexico to Ontario. If you want it shipped all the way to Manitoba, you'd better be prepared to pay for it!

- the Pontiac dealer who explained that most of their cars were so hot they couldn't keep them on the lot. Apparently so much so that people were bidding above asking price in an attempt to get one. Which of course, is why Pontiac is now the best selling brand in North America.... Oh wait a second... maybe that was an episode of the twilight zone.

Anyway, I guess I should thank all those dealers. They helped me resist that new car urge. I've now been driving the same car for 11 years... and I save money every single day!


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## Cal (Jun 17, 2009)

On a side note-I was recently told by a couple of car salespeople, that b/c of the recession the other year, more people are keeping their old cars, thus making the used car market a little thin, causing the average used car to be a few thousand more than it previously would have been.

For a few thousand more, you can get a new car.

I guess it all comes to supply and demand.


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## OptsyEagle (Nov 29, 2009)

ChrisR said:


> I agree with this.
> 
> I went shopping for a new car during the financial crisis when all the car manufacturers were on life support, and every second newspaper headline was raving about the incredible deals to be had on new cars.
> 
> ...


Yes. That is pretty much the merri-go-round they put me on all day long, trying to grind me down. Well they did. I have excluded myself from buying new cars until someone does away with this corruption and garbage. So far, that has not been done.

I am sure my picture is on their wall of the guy you must blow off as soon as you see him because he won't let you steal from him. Unless you overpay for your car, they will not sell you one. They won't stop the merri-go-round either ... it just goes on and on and on ... until YOU get off.

Good luck. It might just be easier on you to just give them an extra $1,000 or so. Unfortuneately, I live in a dream world where if I don't do business with crooks, they might change or go away.


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## OptsyEagle (Nov 29, 2009)

Cal said:


> On a side note-I was recently told by a couple of car salespeople, that b/c of the recession the other year, more people are keeping their old cars, thus making the used car market a little thin, causing the average used car to be a few thousand more than it previously would have been.
> 
> For a few thousand more, you can get a new car.
> 
> I guess it all comes to supply and demand.


That does sound like something they would make up. 

To give them their credit there was a window that lasted about 3 weeks where there was evidence of that statement being correct. Then, presto, the free market corrected as people bought some more new cars and the used car prices dropped back to where they usually are. Did they mention that?


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## bpcrally (Sep 12, 2010)

I used to sell cars. Some advice for you is to spend the ~$40 and sign up for car cost canada. You'll get the low down on any incentives dealers may have that they could be hiding. Find a dealer that deals with car cost canada customers and go from there.

It's the easiest thing in the world. you'll see the dealer invoice price and you can decide whats fair for hte dealer to make, no hidden numbers. 

I used to love car cost canada customers. You can't make much off them but its no BS, they're serious about buying a car and they know you're not pulling a fast on them.


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## 200above (Nov 18, 2010)

I have the car cost info and I see one of the dealers I'm going to is on the top rated for reviews by other people who have taken the info in with 'em. 

We'll see how it goes. Thats all I'm looking for. I'm not trying to screw anyone and by the same token I don't want to get screwed either. 

In your opinion is 3 or 4 % above invoice fair for both parties? To me it is and I'm willign to pay it.


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## ChrisR (Jul 13, 2009)

The question I have is: how accurate are those car cost Canada reports? So they have the Invoice cost... but do they have other considerations like customer rebates? Dealer rebates? Factory incentives? 

I know the Americans have access to this information, but I believe it is still tough to come across in Canada.

What I found most astounding during the crash, was that car companies did not effectively communicate the value of Dealer rebates and Factory incentives directly to customers. Instead, while the manufacturers were offering huge incentives to move product, the dealers were essentially high-jacking the rebates for themselves.


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## al42 (Mar 5, 2011)

I used the same method successfully for my last 2 vehicles. Saved allot of time and traveling. There are many who wont negotiate on line but there are many more that will. And I found out when you do it on line you end up with a manager of some sort that is more interested in selling the car than making extra commission. Just make sure you do your research before you start negotiating. There will be many vehicles available with different options that will change the price but you should know what you want and will be able to explain to the dealer that you don't need all the options they have and they will have to eat the price of these options if they want to sell you their car. Most of the dealers have dealer inventory on line so you can go to their inventory and find exactly what you are looking for.

Good Luck.










cannon_fodder said:


> I went through a similar process last month for my step daughter. Once the vehicle and trim level had been decided I then emailed as many local dealers as I could and mentioned I had the car cost Canada report.
> 
> I told them when the purchase had to be made (within a week) so it was important for them to respond quickly. I created a spreadsheet tracking the dealership, contact info of the assigned sales rep and details about what price they came back with.
> 
> ...


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## cannon_fodder (Apr 3, 2009)

ChrisR said:


> The question I have is: how accurate are those car cost Canada reports? So they have the Invoice cost... but do they have other considerations like customer rebates? Dealer rebates? Factory incentives?
> 
> I know the Americans have access to this information, but I believe it is still tough to come across in Canada.
> 
> What I found most astounding during the crash, was that car companies did not effectively communicate the value of Dealer rebates and Factory incentives directly to customers. Instead, while the manufacturers were offering huge incentives to move product, the dealers were essentially high-jacking the rebates for themselves.


Chris they have all of those things. You know you've struck a good deal when you some dealers tell you to go through every red light to get that deal and they won't even try anymore to compete.

If anyone of you goes to Redflagdeals.com you will see some threads (specifically one for a Hyundai promotion) where people provide copies of Car Cost Canada reports so you can see the details.

If you aren't using CCC reports you are making things much tougher than they need to be to get a good deal.


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## bpcrally (Sep 12, 2010)

ChrisR said:


> The question I have is: how accurate are those car cost Canada reports? So they have the Invoice cost... but do they have other considerations like customer rebates? Dealer rebates? Factory incentives?
> 
> I know the Americans have access to this information, but I believe it is still tough to come across in Canada.
> 
> What I found most astounding during the crash, was that car companies did not effectively communicate the value of Dealer rebates and Factory incentives directly to customers. Instead, while the manufacturers were offering huge incentives to move product, the dealers were essentially high-jacking the rebates for themselves.


They are very accurate. I know from working in sales that these reports would update as fast as we would. On the ball for customer incentives to specific vehicles, grad discounts, etc etc. 

200above: 3-4% is fair. I believe the CCC report will say right on it that 3-5% is fair markup so I'd say you're right on the money. 

Good luck


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## 200above (Nov 18, 2010)

thanks everyone.

we'll see what happens!


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## 200above (Nov 18, 2010)

Well everyone I thought I would take a couple seconds to say I got my new Jetta TDI today. I actually finished the negotiations Tuesday but wanted to make sure everything worked out before I posted. 

I took the carcost invoice forms into the dealership with me. He saw it and automatically new it wouldn't be that easy! After a couple trips between rooms I looked at my watch and said I "had to think about it". The tone changed and I eventually got the price 1000 below MSRP and tint thrown in as well! 

So I was happy, there was one 'security fee' that I wasn't overly impressed with but at least I got tint out of it and figured it was fair. About 3.8% above invoice. I never mentioned anything about the 9K I was putting down and I think the finance manager didn't like that so much. His body language changed a bit when I asked if he knew I was putting cash down. 

I opted only to take one extra insurance option. I picked life insurance as I think it was the mature and responsible thing to do. So if I should pass on, the loan is taken care of. It was about an extra $950 but like I said, it takes care of the loan if something should happen. I said no to all the extra warranty and rust proofing and so on.

I learned a lot. I think I could do even better next time. Overall I'm happy with the research I did and felt I left the showroom with some dignity at least haha.

Thanks for the help!


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## larry81 (Nov 22, 2010)

Congrats !


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## Four Pillars (Apr 5, 2009)

200above said:


> I opted only to take one extra insurance option. I picked life insurance as I think it was the mature and responsible thing to do. So if I should pass on, the loan is taken care of. It was about an extra $950 but like I said, it takes care of the loan if something should happen. I said no to all the extra warranty and rust proofing and so on.


Bad move - those life insurance policies are a ripoff - plus they aren't underwritten at the time of purchase. A claim could be denied.

Can you get out of it? $950 will buy you quite a bit of term life insurance.


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## Guigz (Oct 28, 2010)

I agree with 4P (sorry, I am in a hurry an can't type FourPillars because it takes too much time to type it. On the other hand, I just typed all this, so I might have had time to spell it completely. Oh well, live and learn).

One should never buy life insurance on a depreciating asset. As time go on, the payoff diminues. Plus, since you put 9K$ on the car, you are almost garanteed to always be above water if something happens to you.

Congrats on the car by the way!


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## 200above (Nov 18, 2010)

Yes I can get out of it.... I made sure before I bought. 

So ur advice is to cancel it? What move do I make to replace or have the same 'peace of mind'.

I have 30 days no questions asked, and after 30 days a cancellation fee implies.


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## Four Pillars (Apr 5, 2009)

200above said:


> Yes I can get out of it.... I made sure before I bought.
> 
> So ur advice is to cancel it? What move do I make to replace or have the same 'peace of mind'.
> 
> I have 30 days no questions asked, and after 30 days a cancellation fee implies.


Why do you need to get life insurance specifically for the car? Does someone else use the car as well?

Do you have dependents? Do you have any life insurance now? 

I would focus on getting enough life insurance to meet your overall needs (if any).


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## HaroldCrump (Jun 10, 2009)

On my first car purchase, I had been gulled into buying both life insurance as well as gap insurance.
This had happened at the dealership after all the car price negotations had concluded, and I had been unprepared for this this (didn't even know such products existed).
Something kept knawing at me for weeks and months after the purchase and finally I researched these two things.
The next day, I went back and canceled both products.
I would guess I had these for about 6 months before I canceled.


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## bpcrally (Sep 12, 2010)

Congrats on getting the car! Glad the car cost canada helped you out. Sounds like you got a good deal that was still fair to the dealer. 

I'm glad you turned down the rustproofing, usually its quite expensive at a dealership. You can get it done later if you'd like for a fraction of the price.


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## 200above (Nov 18, 2010)

thanks for the replies. I've been enjoying the +20 weather outside before I have to go back the arctic for another 2 weeks!

I canceled the life insurance on the car. It will save me over $1K in the long term when you include the interest on it over the term of the loan. I have life and disability insurance through work and also another group insurance that is specific to pilots with airline transport licenses. So I'm comfortably covered. 

Glad I posted that here!


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