Buying a car in Canada can be a relatively pain-free process if you know where to start. Learn more about how to buy a car in Canada – including where you can get financing and what steps you’ll need to follow to finalize your purchase.
The best way to buy a car in Canada is to follow this step-by-step process:
Before you begin your search, calculate how much you can afford to spend on your car. Ideally, the amount you spend on a car should be determined these three factors:
The best way to buy a car in Canada is to narrow down your options in advance. Think about the following features to get a clear picture of what you want in a vehicle:
When you’ve settled on the type of vehicle you want, the best way to buy a car in Canada is to compare prices across multiple sellers. You should also know what the base price (also called the Manufacturer Suggested Retail Price, or MSRP) of the car is on the manufacturers website and what it’s selling for on reputable sites like Canadian Black Book, Auto Trader Canada, and Kijiji Autos.
Doing this kind of research can also help you decide whether to purchase your car directly from a dealership or from a private seller.
If you’ve figured out how to buy a car but aren’t sure how to finance your purchase, you have the following options.
Check out reputable car loan providers in the table below and compare providers side-by-side by checking the compare box under each provider you’re interested in.
Before buying a car in Canada, you may want to get it inspected by a licensed mechanic. It’s also a good idea to test drive a vehicle before you buy it to find out if there are any noticeable defects. Some dealerships will offer an inspection or a 30-day warranty on the vehicles they sell. Private sellers can be a little bit more hit or miss when buying a car.
If you’re wondering how to buy a car, one of the key steps in the process is negotiating the best deal. Look at the price of similar vehicles with similar mileage to get an idea of how much you should be paying for your vehicle. You can find this information by searching on sites such as the Canadian Black Book and autoTrader.ca.
In both cases, it helps to apply for car loan pre-approval with a lender so that you know how much money you have to spend before you start shopping.
5 tips for negotiating with a car dealer
Read through your purchase agreement carefully before you sign on the dotted line. Unless you pay for your car outright, you’ll usually have a financing agreement to sign as well. Double-check that you understand all of your rights and responsibilities before you complete your transaction, and know what red flags to look out for. If you have any questions, ask your dealer to explain the terms of your agreement before buying a car.
You may have to cover the following expenses and fees when buying a car in Canada.
Emily lives in Ontario and has been saving up for a new Toyota Corolla. She finds one at a nearby dealership for $25,800 (including 13% HST) and makes a 20% down payment. This means she needs to borrow $20,640 from her bank. She gets approved for a $20,640 loan with a 5.99% interest rate. This is what her loan will look like:
| Cost of new car | $25,800.00 |
| Loan type | Auto loan |
| Loan amount | $20,640 |
| Interest rate (APR) | 5.99% |
| Loan term | 6 years |
| Payment | $342 per month |
| Total loan cost | $24,594 |
This summary shows that while Emily borrows $20,640 to pay for her car, she’ll need to repay over $24,500 by the end of her term. It’s important to factor interest rates and fees into your total loan amount to get a proper estimate of how much you’ll owe.
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.
The best time to buy a car is generally within the last few months of the year – in October, November and December. This is true whether you’re buying a new or used car. Year-end sales can save you a bunch of money on extras and the actual cost of the car. It’s common to see interest-free deals then too. Especially in December, most dealerships are getting ready for next year’s models and need to free up space on the lot. To do this, dealers will cut prices, even if it means making a smaller profit.
Knowing the best time of the year to buy a car can help you save money. But being even more strategic about when you visit the dealership can help you save even more. Here are some of the best times of the month to buy a car.
The end of each month or quarter is one of the best times to buy a car because, depending on the dealership, salespeople often need to reach a target goal. That makes negotiating a better price easier as salespeople want you to sign on the dotted line to help them meet their sales targets. Sometimes, dealerships offer salespeople bonuses if they meet certain targets by the end of the month or quarter, so you might be able to score a better deal if you shop during those times.
When it comes to finding the best time to buy a car in order to lock in a good deal, the day of the week can even make a difference. Saturdays and Sundays are salespeople’s busiest days, not making it an ideal environment for negotiating. Mondays and Tuesdays tend to be slower, allowing you more time to play hardball and see how low you can get the price.
The best time to buy a car can literally come down to the time of day when you visit the dealership. If you know the exact car you want and go shortly before the end of the business day to buy it, you may be in a stronger negotiating position. Salespeople have worked a long shift and are likely looking forward to getting off work. They may be more eager to work with you to close the deal quickly. However, don’t expect this strategy to work if you don’t know exactly what you want. Being indecisive will undermine the salesperson’s perception that he or she can close the deal quickly and go home.
If you can wait for these holidays or events throughout the year, you could save big on your next car purchase.
The end of the calendar year is one of the best times to buy a car. On top of offering blowout sales, dealerships may be trying to meet an annual sales target. This means salespeople are more willing to negotiate with you to get the vehicle off the lot. You may also be able to cash in on these deals during Boxing Day sales leading up to New Years.
Many dealerships cut prices and offer low interest deals to kick-off summer. If you can wait until the May long weekend, you’ll be sure to find a competitive deal on a number of different makes and models. It’s also a good time to purchase a mid-sized SUV because May falls in between the periods when these models are most popular — winter and the beginning of the school year.
This is one of the best times to buy a car. It’s close enough to the end of the year for dealers to start making their big sales push and it’s the beginning of the holiday season — expect sales and incentives to buy. With many people looking for bigger vehicles to get them through winter, you’ll find the best deals on midsize and compact models.
When new cars are released, buyers often run out to get the latest and greatest. After this initial sales rush is over, upgraded models start arriving and can cost the same price as the original model. Because of this, you can negotiate a lower price for the original model.
Once you know the best time to buy a car, it’s important to know what sort of discounts and deals you should be on the look out for.
Keep in mind that many of the special discounts listed here are for new car buyers. This shouldn’t stop you from shopping for a used car and negotiating a good deal, but most rebates will only be given to buyers looking to purchase new.
Knowing when is the best time to buy a car isn’t the only way you can save on your next purchase. You might also want to:
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