What You Need To Know Before Buying A New Car

For many of us, buying a new car is probably the second biggest purchase we’ll make in our lives.  It’s expensive, it’s a long term investment, and you rely on it.  Most of all, no one wants to get screwed.

Get informed…It’s free

Until recently, invoice prices were not readily available to Canadians.  Some companies sold it, while most car dealers just wish they didn’t exist.

Invoice price is the number which the dealer essentially pays for the vehicle.  If a shopper knows what the dealer paid, they go into the dealership more informed.

Now, a website like Unhaggle.com lets you access invoice prices absolutely free.

So what’s a fair markup on a new car?

It all depends on how good you are at negotiating, and how well the vehicle is selling.  Generally a great price is around a 3 percent markup; 5 to 7 percent for luxury brands.

Related: Why I Bought Out My Car Lease

Manufacturer incentives are money offered by the manufacturer of the vehicle to help dealers sell cars.

It’s free money that’s generally passed on directly to the customer.  Sometimes these incentives can be in the thousands of dollars.

Next, you’ll want to know the fees.  There are four main fees (three in some provinces) that a consumer MUST pay.

  • Freight is the cost of transportation of the vehicle to the dealership.
  • Air conditioning and tire recycling levies are smaller government taxes that generally total to around $115 to $130.
  • Finally Alberta and Ontario buyers pay a small regulatory levy for consumer protection purposes of around $5 to $6.25.

Any fees on top of this usually represent additional ways for the dealer to make a profit, admin or etching fees can be negotiated out.

Leave out your trade-in

The age-old negotiating trick is easily applied when a customer introduces the fact that they have a trade-in before the price on the new car is settled.

Essentially, negotiating a trade-in value is a completely separate negotiation.  Don’t mention it up front.

Buyers who combine the two often get overwhelmed, which makes it easy for the dealer to take profit from one to apply to the other.

How to Get the Best Deal in your Pajamas?

Unfortunately, buying a car requires most shoppers to be organized and well researched.  Then you’ll need to spend a few evenings and weekends negotiating, which isn’t as fun as going for a test drive.

For a small fee of $49, Unhaggle reaches out to your local dealers to get them to compete for your business – like a reverse auction.

Related: 10 Fees That Are Worth The Money

Dealers know they have to offer great deals for a chance to win the business.  You can shop for the best price from the comfort of your couch.

Finally, select the best offer and walk into the recommended Unhaggle dealer to finalize the paper in a few short minutes – not hours!

For the more ambitious negotiator, Unhaggle offers free dealer cost reports on almost all vehicles in the market today.

As mentioned above, this is free information that gives the shopper a significant advantage in price negotiations.

Take a look at some recent Unhaggle deals:

2013 Ford Taurus SEL FWD

  • MSRP – $33,799
  • Manufacturer Incentive – $5,500
  • Unhaggle Savings – $1,300
  • Total Savings – $6,800
  • Mandatory Fees (Freight, AC Tax, Tire Tax) – $1,680
  • Total Before Tax – $28,679
  • + $1,000 discount after tax for Costco Members
  • Finance Rates: $5,500 + 5.69% up to 48 months

2012 Acura TL AWD Auto Technology Pkg

  • MSRP – $46,990
  • Manufacturer Incentive – $7,500
  • Unhaggle Savings – $2,550
  • Total Savings – $10,050
  • Mandatory Fees (Freight, AC Tax, Tire Tax) – $2,080
  • Total Before Tax – $39,020
  • Finance Rates: $2,000 + 0.9% up to 48 months

Related: My Brand New Car

Final Thoughts On Buying A New Car

Buying a new car can be intimidating for many people.  You walk onto the car lot and the sales staff jumps all over you with their high pressure tactics.  All of the negotiating strategies you’ve read go out the window when you lose your nerve in the heat of the moment.

Related: How I Saved $300 On Cable And Internet

Unhaggle is one of Canada’s largest online market places for new vehicles.  They make buying a new car easy because they strip away all the dealer jargon that’s designed to confuse you.  They make the dealer’s compete for your business and offer their best price.

Best of all, Unhaggle offers a 100% satisfaction guarantee.

So if you’re in the market for a new car, or you’re reluctant to buy a car because you hate negotiating, give Unhaggle a try and save yourself some time and money.

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  1. Joe on February 4, 2013 at 12:41 am

    That seems like a great system, assuming you intend to buy a new car. I maintain that the most logical personal finance move is to buy a used car and let some new-car-buying-sucker pay the biggest chunk of depreciation for you.

  2. KC @ genxfinance on February 4, 2013 at 6:04 am

    Okay, I got to say that’s impressive. Let me go and check Unhaggle out.

  3. Paul on February 4, 2013 at 7:02 am

    We used Unhaggle when we bought a new car in September 2011. When I saw the numbers my first reaction was “I think I can do better than that”. I was able to get a better price on my own. Still, Unhaggle is a great service for those who dread the whole car-buying process.

    • Echo on February 4, 2013 at 7:49 am

      @Paul – Did you get the free dealer invoicing report from Unhaggle or did you pay for them to reach out to local dealers and get quotes?

      If you paid, did you get your money back?

      • Paul on February 4, 2013 at 7:57 am

        I paid for Unhaggle to reach out to local dealers. I also got the dealer invoice price from another source (APA, I think) so I new the “spread” so to speak.

        • Paul on February 4, 2013 at 8:03 am

          Forgot to add, no I didn’t get my money back because I didn’t conclude the purchase thru Unhaggle. I also found the fees quoted by Unhaggle (freight, A/C tax, tire tax, OMVIC fee) were $100 more than what I was actually charged by the dealer.

  4. Jerry on February 4, 2013 at 10:37 am

    I bought used. Cheaper insurance and I was able to pay cash. It might lead to some initial repairs but we were quite lucky with ours.

  5. Anne @ Unique Gifter on February 4, 2013 at 12:20 pm

    Interesting and good to know. After narrowing down what we wanted exactly, I phoned about 8 dealerships that were in an area we could feasibly get to. I was surprised at the price differences on exactly the same model of vehicle. I think the spread was $3600, in all-in pricing!

  6. Bet Crooks on February 5, 2013 at 8:21 am

    We used APA the last time. We had the costs free from UnHaggle, but we wanted to see what deal APA had negotiated for its members. They actually have a system where they have a dealer lined up in some of the big cities (Toronto, Ottawa, Montreal, Vancouver and Victoria, Ottawa) who will sell you a car for a set price that you know ahead of time.

    We used our set price from APA and went out to Hamilton (ON) and negotiated a price below the APA price. Not a lot below, but enough that it was a good deal for us.

    One thing the salesman mentioned is that they also get dealership rewards from the manufacturer for volume of sales. By selling to us, he was going to get another one. That gave him incentive to reduce his personal commission, because he’d make more than that back from Toyota.

    Also, be aware there’s a lot of padding in the “dealer prep” part of the quote. They aren’t going to lose money even if they sell the car at invoice.

    We always buy new and always buy Toyota and so far have never had a car problem. We drive them 14-16 years, then sell them for someone to drive for another 5-10. It costs more than buying used or buying a different brand, but we’ve never regretted it. We always pre-save the entire price of the car and pay cash. (We biked and occasionally rented during the first few years after Uni when we had to save up for our first car. (A Tercel, anyone remember those?!))

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