Follow this game plan when buying a new car
Freedom, fashion, function and fun are just a few of the perks of owning a car. While buying a new car is exciting, the process to find the right one for you does come with some challenges.
Most frustration and anxiety come from a lack of preparation and know-how when researching, inspecting and test-driving cars, and of course—negotiating with car dealers. But fear not, by doing a little bit of homework you can build the confidence you need to happily purchase your next car.
Outline your needs and research your options
First things first, how will you use your vehicle and what type of vehicle are you interested in? If you’re looking for a sporty sedan, list all of the ones you’ve got in mind and that fit your needs. Next, pop open a few web sites like BCAA Canadian Black Book, Consumer Reports or Edmunds to get lists of comparable cars in the same category.
This helps in a number of ways: it will jog your memory on a few more makes and models, you’ll get to see how they compare at a glance, you’ll find in-depth reviews and discover the reliability and maintenance costs you can expect.
You’ll also notice many vehicle categories have Hybrid versions of the same cars you’re comparing. Effectively, these cars and trucks will look and feel the same but have the added bonus of fuel-saving technology that positively impacts the environment. While the initial cost might be a bit higher, they can save you money down the road. Plus, consider the insurance savings that come along with a hybrid or eco-friendly vehicle. Save 5% on BCAA Optional Car Insurance for eco-friendly hybrid or electrical vehicles. There's a lot to consider, so give yourself plenty of time to research.
Prepare your wallet
While it’s easy to buy groceries every week, buying a car is a rare event. Vehicles come with built-in expenses that need to be factored into the overall cost. In addition to sales tax, registration and insurance costs, put aside some money for a mechanical inspection. You may also want to consider an extended warranty for repairs, if needed. It's also a good idea to keep a small maintenance fund ($500 to $1000) for the unexpected. These costs can add up in a hurry which leads to the next point.
Most of us don’t have an extra $25,000 sitting in the bank, so that might mean taking out a loan. It's a good idea to explore your options, such as the best interest rates before you purchase. Then decide how much you want to pay for the car - set a maximum and don't go over it. This will be key when you start negotiating with the seller or dealer.
The test drive is where you’ll really begin to feel if the car is right for you or not. Don’t be shy on putting the vehicle through its paces and testing the acceleration, braking, turning radius, and gear shifting. Also check out the design of the dashboard, climate control, stereo and navigational features, and don’t forget to check the blind spots.
New vehicles have all the goodies: the latest safety, navigation and entertainment technology. While pre-owned vehicles may cost less, many will have already depreciated roughly 40% in the first three years. As you weigh the differences, here are a few more considerations:
- If it’s a used car, ask the seller about its accident record, history of ownership and service record. If the seller is cooperative in answering your questions, chances are good that they have nothing to hide. Plus, as a BCAA Member you can gain full access to our BCAA Canadian Black Book to get and compare used car trade-in and retain prices.
- What's the warranty coverage? Are there any perks like free maintenance?
- Are there any dealer demo vehicles available for purchase? You can get a healthy discount and drive away with the manufacturer's latest model. While technically pre-owned, dealer demos have usually been well-maintained and gently driven.
Ask the golden question
“Is that the best you can do?” is the best question to ask whether you’re negotiating for a new or used car. It signals you’re prepared to walk away. For many people, the toughest part of the whole process is actually being ready to walk away if you don’t like the answer. Remember, it’s your money and your decision.
Before you buy
As you get close to making your final decision, you’ll want some peace of mind. For a used car, do a lien and accident search to see if there’s any undisclosed history. And, don’t forget to have a reputable auto mechanic do an inspection, too. For your convenience, visit a local BCAA Auto Service Centre and have one of our friendly Red Seal Certified technicians provide you with a thorough Pre-Purchase Vehicle Inspection. This 176-point mechanical and system performance examination will give you peace-of-mind and help you ensure your car is in great working condition.
Protect your investment
Whether you buy new or used, know your car insurance choices for more savings and better coverage. In BC, you are required to buy ICBC’s mandatory Basic Insurance, but you have a choice in buying your optional coverage from ICBC or another provider, such as BCAA Optional Car Insurance. Optional coverage helps cover the cost to repair your vehicle in case of an accident and much more.
For newer vehicles (within 5 model years old), consider topping up your coverage with BCAA’s New Vehicle Replacement Coverage which provides you with a new vehicle or cash equivalent if your new car is written off or stolen. As one of BC’s largest Autoplan brokers, BCAA will help get you the car insurance you need and find you the best rates. Plus, if you are a BCAA Member, you’ll save up to 20% on BCAA Optional Car Insurance. Learn more at bcaa.com/car.