Tips for saving when buying a car

An Article from our good friends at RateHub.ca

If you want to save money when buying a car, whether used or new, there are some simple rules. The most critical is understanding the total cost of ownership. Typically, we look at the sticker price, but what about gas, maintenance, and car insurance? With that in mind, let’s look at how you can save on buying and owning a car.

Consider expenses

When comparing cars against each other, it’s imperative to also compare their relative expenses.

For instance, you can use sites like Natural Resources Canada to compare fuel consumption. Knowing how much you drive in a year, you can understand how much your annual gas cost will be.

For maintenance, the rule of thumb is to set aside $100 per month. Early on in a car’s life, this is good to cover routine maintenance like lube, oil, and filter changes, multi-point inspections, and tire rotations. As the car ages, you should factor in costlier expenses like brakes, suspension, and replacing tires. In fact, make sure to factor in these costs if you’re considering buying used.

Make sure to also consider administrative costs like taxes and registration fees, even if you’re buying used. Finally, it’s a smart idea to think about the cost of auto insurance before purchasing any car.

Why you should review your car insurance needs before buying a car

Many factors go into the price you pay for car insurance, including your driving history, age, gender, credit score, and yes, even the car you buy. Before buying a car, it’s vital to check the cost to insure it because it’ll affect what you can afford for years to come.

For instance, the average cost of car insurance in Ontario is $1,505 per year, according to the Insurance Bureau of Canada (IBC). But, when we did a controlled study, the Mazda CX-5 came in $130 less per month, or $1,560 cheaper annually than the Volkswagen Tiguan. Pro tip – you can compare car insurance online at Ratehub.ca which will help you narrow your decision.

Shop around

When buying a TV, you’ll likely check multiple sites and stores to find the best price, and it’s no different when buying a car. Consider every dealer within commuting distance and, after narrowing your decision with the tactics above, ask for their best price. You can use services like Unhaggle or CarCostCanada, which pits dealers against each other to give you the best price of a new car. It’s worth it to check used car websites as well, like Autotrader or Kijiji. Generally, a car’s value depreciates by about 20% in its first year, and 60% within the first 5 years of its life. Knowing the used and new costs, and what you value in a car can help you narrow down your choice.

Timing your new car purchase

When thinking about buying a new car, consider the end. The end of a slow week for a salesperson, or a slow month for a dealership, is when the incentives roll out to help facilitate sales which unlock bonuses. Also, consider the end of the year when dealerships are focused on selling off their old inventory to make room for next year’s models.

If you’re buying used, take your time. After all the time spent researching the model you want and comparing prices regularly, you’ll know the difference between a good deal and a bad one. You can then wait for the right deal to come around, especially as new car buyers have to unload their old vehicles. Remember, new car sales feed the used car sales market.

Where the rubber meets the road

Whether it’s your first car or replacing the old jalopy, buying a car doesn’t need to be stressful, especially when you’re armed with the information and tools you need. We hope you’ll take advantage of the tips and tools provided to help your research. Happy shopping!