How to Buy a New Car in Canada

Buying a new car anywhere is a process that involves a lot of research, and Canada is no exception. Car salespeople are the most persuasive in their field, and the mark-ups on cars are high. When you are going to buy a new car in Canada, you may be able to save anywhere from $1,000 to $5,000 dollars and even more if you are lucky.

The main thing to decide on when buying a car is your budget and mode of payment. The price will help you narrow the search to specific car models and makes and will help you make an informed decision. Then you can decide whether the payment will be up-front or a lease.

Go online and research new cars and pricing structures. There are various sites online that will provide price comparisons between cars and allow the buyer to make an informed decision. Once the choice of the car has been narrowed down, the process becomes easier.

However, before proceeding, get to know about the price structures for purchasing cars in Canada. There are various elements involved, from list price to the holdback, dealer invoice price and more. Get to know every aspect of the structure to get the best price.

Test-drive the car. The buyer may fall in love with the look, feel and features of a certain model, but in the end, actually driving the car determines the choice. Test-drive the cars that have been chosen and then make the final choice.

Once the choice of the car model has been narrowed, get an online quote. Most sites that offer price comparisons for cars online will take the information the buyer provides online and send it to listed dealers in the buyer's locale. The car dealers will then contact the buyer with information, price and so forth. Some sites will even let the buyer put together the various features of the car and come up with a specific MSRP (Manufacturer's Suggested Retail Price).

Canada does not allow access to dealer invoice pricing and/or dealer cost, so buyers must go to different sites and get online quotes. This will help the buyer get a definite idea of the price. While the difference may not be much, the buyer will realize which dealer will go down faster and how much of a margin for bargaining there actually is. There are also some sites that will provide "wholesale dealer price information." Once the buyer knows that price he or she will know how much of a margin there actually is between the MSRP and the sale price.

In Canada, there is only one site at the moment that allows the buyer to purchase a new car online. All paperwork is available online, and the car price is fixed and available immediately as well. For those not wanting the hassle of the salespeople and bargaining process, this may be the way to go. However, most buyers still prefer the conventional way of going to the dealership and working with the salesperson to get the car they want to buy.

Once the price reports have been created, speak to the salesperson at the dealership of choice. Most car dealers have a 10 percent profit margin on the sale price of the car.

However, if the price comparison has been done correctly and the number the buyer comes up with is within 3 to 5 percent over the invoice price, the dealer will give available rebates and make the sale-that is, of course, if the dealer knows he or she is dealing with someone who knows the price structure. So if the buyer buys the car, the savings can be as low as $1,500 and as high as $5,000.