Car Buying Tips and Tricks

Car Buying Tips and Tricks

 

Purchasing your next car doesn't have to be stressful; just years of horrible car dealership experiences have made it that way. Even the idea of walking into a dealership and confronting one of the salespeople in an overpriced suit makes us collectively yearn for a bottle of wine and a weighted blanket. 

Allow us to be concise. Whether you're a first-time car buyer or a seasoned car buyer, we're here to lay out some car buying tips to ensure you're getting the best car deal on a used car in Canada and not being hustled by the car dealer.

Let's start at home with you. If you are like many car buyers out there, your priority is likely budget. A logical place to start. No one is trying to sacrifice their retirement fund for a car payment with a high-interest rate. Let's pause here and take a half step back. Everyone has a bottom line and it's best you understand it and how that will work with your lifestyle. By identifying what you expect from your next car, you'll be better prepared to budget for it.

 

Identify Why You're in the Market For a New Vehicle.

Maybe you primarily commute in the city, but you would like to head to the mountains to find some air on your weekends. You might prioritize tight parking capabilities, great gas mileage, and all-wheel drive. Maybe your parents live in Regina and you live in Saskatoon and need to be able to drive there no matter the weather. Either way, you want to know that you're getting a great car, at the best price possible.

Are you hoping to add convenience? Preparing for a new driver in the family? Ready for an upgrade? Whatever need you identify that has you prepared to purchase a new vehicle or to trade in your existing one, write it down.

What attributes that will contribute to a vehicle's ability to satisfy your needs?

If we're zipping around a city, that might mean something easy to park. If we're making long commutes out of the city, maybe your biggest value is the gas mileage. You might value hauling capabilities and cargo space if you have six kids.

Start with the most important: seating, terrain capabilities, and mileage. Separate that list of needs from ideas that might excite you. Hybrids and electric vehicles are certainly popular, but maybe not the most important thing if you live on a hillside that an FWD couldn't climb, but an AWD handles like a champ. You'll need to be able to fit your family, drive around your place of residence, and afford your gas every time you need a fill-up.

With your key priorities in mind and to make the car-buying process as smooth as possible, let's determine your budget.

Budget- What Can You Afford?

How much can you realistically afford to spend on a vehicle? Remember to consider down payment, if you plan to take out an auto loan and if you do what the loan terms will be. Try FFUN Cars' fancy online tool where you can get pre-qualified in two minutes with zero impact on your credit score.

The sticker price for a vehicle should be no more than roughly 20% of your annual pre-tax income. This feels like a surreal number for a car purchase, given that a decent used model with some manufacturer's warranty intact is likely to start at 20k and move upwards. Assuming you don't currently pull in 100k a year, or can't access a large lump sum of cash without damaging your emergency savings or assets, multiple buying options may be more realistic. Remember that your total cost for this vehicle doesn't end at its sticker price. You'll also be responsible for licensing and registration, taxes, fuel, insurance, planned and unplanned maintenance, etc. Experts recommend multiplying a vehicle's sticker price by about 120% to get an idea of what the true cost of the purchase will mean for you. You can also use MU30's Car Affordability Calculator to understand better what you're prepared to afford.

The Power of Cash

If you currently have 3x your monthly expenditures in an emergency savings account, are currently debt-free or paying low interest towards any existing debt, you're well on your way to making the car-buying process that much easier. If time and stability are also on your side, saving cash to pay towards your vehicle purchase in a lump sum helps keep you on budget and prevents overspending. It's a lot harder to part with cash than it is to sign a check or a lease agreement. And it's a lot harder for a slick-talking salesperson to convince you of extra packages or upgrades if you have the cold hard cash in hand as your bottom line. A simple tactic to avoid negotiating altogether is to put cash on the table and let that number dictate the deal, the agreement must be met at those parameters as you simply have no more cash.

Possible downsides to cash purchases depend on your financial situation, so be aware of how your expenditures affect your income. Check your existing debt and calculate exactly what the APR you're paying towards it looks like. If the APR is higher on any existing debt than it would be on a new car loan, it may make more sense to pay that down with the lump sum of cash you've saved while you finance the vehicle in monthly payments. If you think you'd like to buy a house shortly, you might rethink paying cash for a vehicle and consider a financing plan of 36-48 months. On-time payments made over that duration will bolster your credit.

 The Beauty of Financing

If you lack the cash flow to purchase outright, are you interested in the flexibility of monthly payments, or are you trying to build credit and equity? If so, you may look into financing a vehicle. Experts recommend getting pre-approved for a loan primarily. Empowering yourself by understanding your creditworthiness and possible loan rates will act as a bargaining chip before you even start shopping. Put into perspective what the total cost of the vehicle will be, including interest paid over the length of the financing terms, before calculating how much you're able to fork over every month. Get pre-qualified in two minutes to get things going and one step closer to your next car.

Financing is preferential for many buyers because of the flexible monthly payments and because it is easier to part with small amounts at a time. This is why it's so important to keep the purchase price in mind. After the vehicle is paid off, you will own it and will have equity in it. Because vehicles typically depreciate over time, high-interest loans paid over many years equate to a very high purchase price that will not necessarily roll over into a new vehicle when it comes time to sell it or do a trade-in.

Leasing is Always an Option

If you are in the market for brand-new vehicles only, leasing is typically the cheapest month-to-month out of pocket but comes with many downsides. To begin with, a leased vehicle is yours only for the term of the lease. After the termination of the lease, the vehicle will be returned to the manufacturer or you will have the option to purchase. Still, it is not a straight trajectory to ownership as with a cash purchase or financing. Leasing will typically cost more in the long run as you're effectively paying for the use of the vehicle but not paying for the vehicle itself.

Along with this, you're liable for any knicks or changes to the vehicle's condition upon its return to the dealer and have many restrictions for the duration of your time driving, including how many miles you're able to put on it. You'll also pay dealer fees in your lease to compensate for the liability. Typically, leasing a vehicle will only be the best option for you if you have to have a brand-new vehicle and can't afford to finance it.

Now that you have determined what you can afford, you're ready to begin thinking about the type of vehicle you want to purchase.

Are You Looking For a New or Used Vehicle?

While there is no better feeling than driving a brand-new car off the lot on its maiden voyage, consider the price differential between that brand new package and a slightly older vehicle with a similar package. New cars are typically priced, including the fact that they have never been owned. We hear the best times to get great deals on brand new vehicles are in September and October, as dealerships empty their lots in preparation for new vehicles. Don't get too caught up in owning a brand-new car. With supply chains being at an all-time low, new cars aren't easy to find, and when you do find them, they come with a price. You do everything else online, so why not look at buying your car online, too, right here at FFUN Cars. Buying with FFUN Cars, the price you see, is the price of the car, without all the haggling and certainly without any hidden fees. Our goal is for our customers to save money on their car purchases. Plus, with every vehicle, you can enjoy a 360° virtual tour and look over the free CARFAX report that comes with it.

When considering used vehicles, nobody wants a lemon. Look for Certified Pre-Owned (CPO) vehicles that will come with an inspection report or consider hiring an independent mechanic to perform a pre-purchase inspection (PPI). Or shop FFUN Cars and shop with comfort, knowing each vehicle has undergone a meticulous 206-point inspection. High mileage cars that are maintained and serviced routinely can be more valuable than low mileage cars that have been sitting idle. In particular, Toyota, Mazda, and Honda vehicles rate very high in value retention. Pro car-buying tip: do your research.

Buying a car is one of the biggest purchases you'll make in life. Your satisfaction will ultimately come down to three things: functionality in your day-to-day, longevity, and cost per longevity. A metaphor for life, car buying ultimately comes down to mitigating what you don't want against what you do want, the first step is to identify your priorities.

FFUN Cars makes the entire car-buying experience enjoyable, convenient, and cost-effective. Stop visiting car dealership after car dealership and shop FFUN Cars' extensive inventory. From there, you can take advantage of the first in Canada fully online car financing and get pre-qualified without any impact on your credit report. Purchase your vehicle and then all you do is wait for it to be delivered or you can pick it up. It really is car shopping made easy.

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