Buying a new car is an exciting process, but it can also be overwhelming, especially with all the choices available.
From selecting the right model to navigating financing and leasing options, the journey from researching a car to driving it off the lot requires careful planning.
In this guide, we’ll walk you through the entire process, ensuring you know what to expect when you step into the dealership and how to make the best financial decision.
1. Start With Research: Choose The Right Vehicle
Before visiting a dealership, it’s crucial to know what type of car you’re looking for.
Consider your lifestyle, driving habits, and needs to narrow down your options.
A. Identify Your Priorities
Ask yourself the following questions:
– Do you need a fuel-efficient car for commuting, or do you prioritize power and performance for long road trips?
– Do you need ample cargo space, or is a compact car more practical for city driving?
– What safety features are non-negotiable (e.g., lane-keeping assist, adaptive cruise control)?
B. Compare Models and Features
Use manufacturer websites or third-party car comparison tools to evaluate models based on:
– Fuel efficiency (essential in Canada’s varying weather conditions)
– Safety features
– Technology (infotainment systems, advanced driver-assist systems)
– Reliability and maintenance costs
– Resale value
Once you have a few models in mind, check reviews from trusted sources like Consumer Reports or J.D. Power for real-world insights.
2. Visit The Dealership: What To Expect
When you’re ready, visit the dealership. Knowing what to expect and how to navigate this part of the process will give you confidence and reduce stress.
A. Book a Test Drive
Contact the dealership to book a test drive for the cars you’re interested in. Dealerships often work by appointment, especially during busy periods, so it’s best to schedule ahead.
During the test drive, pay attention to:
– Comfort: Are the seats adjustable and supportive? Is there enough legroom?
– Handling: Does the car feel smooth over bumps, and how does it handle turns?
– Technology: Is the infotainment system easy to use, and does it offer connectivity options like Apple CarPlay or Android Auto?
B. Explore the Vehicle’s Features in Person
While visiting the dealership, ask the salesperson to give you a walkthrough of the vehicle’s features:
– Trunk space: Check the storage capacity, especially if you need to fit sports gear, luggage, or groceries.
– Interior materials: Are the materials high-quality? Consider how easy they’ll be to clean and maintain.
– Technology demo: Request a demo of the safety and convenience features, such as automatic emergency braking or a backup camera.
3. Negotiating The Price: Know Your Leverage
Dealerships typically have some room to negotiate the price of a new car, but it’s essential to do your homework before engaging in negotiations.
A. Use Online Tools
– Websites like AutoTrader can help you understand the average market price for the car you’re interested in. This gives you a ballpark figure for negotiations.
– If possible, get quotes from multiple dealerships to see who is offering the best deal.
B. Watch for Promotions
Manufacturers and dealerships frequently offer promotions, especially towards the end of the year when they’re trying to clear inventory for next year’s models. Look for:
– Cash rebates
– Low or zero-interest financing
– Special lease rates
C. Add-Ons and Extras
Dealerships often try to upsell extras like extended warranties, rust-proofing, or accessories. While some add-ons may be useful (such as extended warranties for peace of mind), others may not be necessary. Consider whether these extras align with your needs or budget.
4. Understand Your Payment Options: Financing Vs. Leasing
Once you’ve decided on a vehicle and negotiated the price, you’ll need to figure out how to pay for it.
Most buyers in Canada either finance or lease their new car.
A. Financing a New Car
Financing means you’re taking out a loan to pay for the car, which you’ll pay back over time, typically with interest.
Key points to consider:
– Loan term: Loan terms can range from 24 to 84 months. Shorter terms mean higher monthly payments but less interest paid over time.
– Interest rates: Your interest rate depends on your credit score and the lender. Some manufacturers offer low-interest financing for new vehicles.
– Ownership: Once you’ve paid off the loan, the car is yours to keep. This is ideal if you plan to drive the car for many years.
B. Leasing a New Car
Leasing allows you to drive a new car for a few years (usually 2-4 years) by making monthly payments, but you don’t own the car at the end of the lease term.
Key points to consider:
– Lower monthly payments: Leasing usually has lower payments than financing, but you don’t gain ownership of the car.
– Mileage limits: Leases come with mileage limits (e.g., 20,000 km per year). Exceeding this limit can result in costly fees.
– New car every few years: Leasing is ideal for drivers who like to have the latest model without worrying about the long-term wear and tear of ownership.
– End-of-lease options: At the end of the lease, you can return the car, buy it at a predetermined price, or lease a new vehicle.
5. Get Pre-Approved For Financing
Before you sit down with the dealership’s finance department, it’s a good idea to get pre-approved for an auto loan.
You can do this through a bank, credit union, or online lender.
Pre-approval gives you:
– A better understanding of your budget
– Leverage during negotiations, as you won’t be reliant solely on the dealership’s financing offers
In-Dealership Financing Options
Dealerships often work with several lenders and may offer competitive financing packages. If you haven’t secured outside financing, ask for their best financing offer and compare it with what you find elsewhere.
6. Review And Understand The Contract
When you’ve decided how to pay for the car, the next step is to finalize the contract.
Be sure to review every detail carefully.
A. Check for Hidden Fees
Common fees include delivery charges, documentation fees, and charges for optional features. Ask for a breakdown of all costs before signing the contract.
B. Understand Your Warranty
New cars come with a manufacturer’s warranty, typically covering 3 years or 60,000 km, whichever comes first. Ensure you understand what’s covered, including powertrain, electrical, and corrosion protection.
C. Verify the Final Price
Ensure the price on the contract matches the price you negotiated, including any trade-in value, rebates, or promotions.
7. Post-Purchase: What Happens Next?
After signing the contract, you’ll typically be given a few days to pick up your new car.
The dealership may need time to prepare the vehicle, clean it, and add any options you’ve selected.
A. Insurance
Before driving your new car home, you’ll need to secure insurance. Contact your insurance provider to add your new vehicle to your policy.
B. Licensing and Registration
The dealership will usually handle the registration and licensing process for you, but verify this ahead of time. You’ll need valid plates before driving off the lot.
Sealing The Deal
Buying a new car in Canada is a significant financial commitment, but understanding the process—from researching and test-driving to negotiating and choosing between financing and leasing—can make the experience smoother.
By doing your homework and knowing your options, you’ll be able to drive off the lot in a vehicle that meets your needs and fits your budget.
Happy car shopping!
