autobazaar Buyers Guide & Tips Steps on How to Buy a Car Without Getting Ripped Off

Steps on How to Buy a Car Without Getting Ripped Off

Buying a Car

uying a new car can be one of the most thrilling and terrifying experiences you’ll ever go through – especially if it is your first time!

Not only are you excited about the prospect of a beautiful, sleek new car with all of the latest and greatest features, but for the freedom and control that comes along with it.

You’ll spend months daydreaming, watching YouTube videos, and reading articles to find the most perfect car. And then comes the day when you decide to pull the trigger. You grab your significant other, pack up all of your research and head over to the dealership or yard.

This, for most people, is where everything starts to go downhill!

To some, the process of actually buying a car is perhaps the most unpleasant thing they’ll ever experience. But, it doesn’t have to be! Follow these tips on how to buy your next car without getting scammed.

1. Set a budget and stick to it

One of the biggest mistakes you can make when purchasing a car is to dive into the process without first having your finances in order. Before you go anywhere near a dealership, determine what you can afford.

You should know exactly what the maximum purchase price you’re willing to pay is, as well as the total cost of ownership.

You might be surprised at how much more goes into the cost of owning a car beyond what you fork over to the dealer (for example: tax, financing, insurance, fuel, repairs, maintenance, licensing, road tolls etc.).

A good rule of thumb is to take the price of the car and multiply by two to get the rough cost of ownership over 10 years. Once you’ve set a budget that makes sense given your financial situation, stick to it.

2. Do your research

Once you know how much you’re able and willing to spend, go online and check out a bunch of websites, articles, and YouTube videos to figure out exactly what type of car and features you want.

All of the big car manufacturers have a “build it now” section where you can digitally construct a car to your exact specifications.

There are also in-depth reviews of virtually every car model and make on YouTube. Autobazaar have a several important car reviews

Once you have narrowed down which make, model and upgrades perfectly suit your needs, think about what features are non-negotiable and what you’d be willing to budge on. If you know what you want in advance, you’re less likely to get sucked into buying expensive add-ons and up-sells under pressure from the dealership.

3. Don’t get married to a specific model

While it is a great idea to know what you want before you walk into the dealership, it can also be advantageous for your pocket-book if you’re willing to be flexible on certain features.

Depending on when and where you go there will likely be deals on various models, trim levels, upgrade packages, or colours.

Dealerships might be looking to clear certain models of unsold inventory and will be willing to take a hit on the price just to move the product.

4. Know how much the vehicle costs

Knowlwdge is POWER

In this case knowing the difference between what the dealer is paying for the car and the sticker price can help guide your negotiation and save you a ton of money.

There are two numbers you’ll want to get intimately acquainted with: MSRP and the dealer invoice price.

The MSRP (Manufacturer’s suggested retail price) is what the manufacturer suggests the end consumer pay for the car. There are a lot of sites that compile this information, advisable to visit general car listing websites like,, some dealers sites have the price as well like, In US check out sites like

This will give you a good barometer for what the price floor might be for any specific car model.

Keep in mind though that dealerships often get a whole host of additional monthly, quarterly and yearly sales volume bonuses as well as model-specific incentives and rebates.

So no matter what any website lists as the invoice price, the dealer is still going to make money on the car at what might seem like “rock bottom” prices.

5. Consider the cost of insurance

Most people get so caught up with the car model vs. the sticker price that they often overlook many other key factors that make up the total cost of ownership of a car.

The two biggest expenses are your car payment and insurance premiums, the latter of which can vary wildly depending on make, model, safety features, likelihood of theft, and even colour.

The insurance-cost-to-car-price ratio is typically a lot higher for smaller, sportier cars with fewer safety features. What’s the point of negotiating hard to get the best price on a car if you’re just going to be paying it all back in higher insurance premiums.

A quick search is all it takes to figure out roughly what the insurance will cost you. If you want an exact figure, most banks and credit unions have easy to use insurance calculators (just be aware that you might have to cough up some personal information).

How to reduce your insurance premiums:

  1. Go big (SUVs and other larger vehicles are typically much safer – think Honda CRV, Toyota Vanza, Toyota Hilux).
  2. Opt for a car with enhanced safety features
  3. Get some winter tires (ask your dealer to throw them in for free)
  4. Pick a bland colour (whatever you do, don’t pick red)
  5. Stay away from “sport” trim levels
  6. Stay away from theft-magnets (Toyota corolla, Honda civic etc.)

6. Shop around

When it comes down to it, dealerships are really just big, fancy sales offices whose sole purpose is to sell you the biggest ticket items at the highest margins possible.

The dealer could care less whether you’re actually getting a car that fits your budget or suits your needs.

They’re in it for the big commissions – full stop. So why should you be loyal to them? Shop around! Talk to more than one dealer and get the best offer you can.

Once you have a great offer in hand, take it to another dealer and ask them to match or beat it. Don’t be afraid to let the salespeople know exactly who is willing to beat their prices.

If you want to spend as little time as possible in a dealership and get the absolute best price, follow these steps:

  1. Figure out what the car’s dealer invoice price is.
  2. Draft an email outlining the exact model and specs you want with a reasonable all-in price offer (somewhere in between the invoice price and MSRP).
  3. Send the email to a couple dozen dealerships.
  4. You’ll get a range of responses. Just disregard any that probe for a lot of personal information or who come back to you with unreasonable counters-offers.
  5. If you get the price you want, great! But feel free to negotiate further. Be a bit flexible with some car features (for example, colour and upgrades).
  6. Play dealers against each other. Take the lowest offer and physically present it to another dealer and ask them to match or beat it.
  7. Once you have the offer you want, print it out and take it into the dealership to close the deal. Stay firm on the price and don’t get pulled into purchasing any of the last-minute extras.

7. Don’t be afraid to walk away

This is one of the most important things to keep in mind when buying a car.

A car purchase is something you should never rush into. Start the buying process 2-4 weeks in advance and be committed to leaving during any part of the negotiation, regardless of whatever pressure the dealers apply (and trust me, they will). Any threats of time-sensitive offers can be flat-out ignored. Any deal that you were offered today will be available to you tomorrow (perhaps with the exception of advertised rebates).

Politely give the dealer your phone number, tell them you need more time to assess your purchase, and then get up and leave. You’ll almost certainly get a call within a day or two with a better offer.

A word of warning: Walking away will not work if your offer is completely unrealistic. You’re not going to get a car for at or below the price the dealer paid for it. In this scenario, walking away just wastes everyone’s time. So do some research before-hand and know what the going rate is, how hot the car model is and how long it has been sitting on the lot.

8. Wait until the end of the month

The timing of your car purchase can be a huge factor in price negotiations.

Head into the dealership towards the end of the month, and if at all possible, wait until the months of October to December. This is when the best deals begin to appear as the salesmen will be looking to meet volume quotas for their bonuses and the dealership will be looking to clear out last year’s inventory to make way for new models.

With the cards so heavily stacked against you in the car buying process, why not shift the balance of power and make your move when the dealer is a bit more desperate for your business!

9. Pay in cash

When the time comes to seal the deal the most surefire way to get ripped-off is to finance your car through the dealership. Most dealers have some financing offers.

The moment you entertain dealer financing the conversation will shift from the purchase price of the car to something entirely different: “monthly payments”. Regardless of how amazing their financing might seem, any “deal” that you’re getting is being recouped in full in other ways (i.e. increased overall price, an extended financing term, add-ons, forced warranties, reduced trade-in value etc).

When you pay in cash, you remove dealer financing from the equation, meaning there’s one less variable to worry about. Instead of negotiating on down payments, terms lengths and monthly payments you can stick to just one variable – the total purchase price of the car.

But what if you can’t afford to purchase a car in cash? No problem! Just head over to a bank or credit union and negotiate a loan. You’ll get a reasonable rate and you’ll be financed before you even walk onto the lot. Even if the bank rate is higher than what the dealer is offering, you now have the ability to negotiate the dealer down to their rock-bottom prices without being manipulated.

You’ll also be much more likely to get any advertised rebates as well as the hidden discretionary rebates that the dealer isn’t obliged to tell you about.

Pro tip 1: Don’t tip your hand too early on how you want to pay for the car. Listen to what they have to say and “be open” to dealer financing through the negotiation process. You might find that they will sweeten the offer with upgrades or accessories.

Pro tip 2: If you have a trade-in, don’t mention it until the very end of the buying process. The dealer will use this information against you, especially if you’re also planning to finance from them. The more variables they have to play with, the more money they will squeeze out of you.

10. Skip the extended warranty

Dealerships are in the business of making money, so you can bet that every product or service they add on will have some hefty margin baked into it. Let’s be real. A lot of these extended warranties cost multiple thousands of dollars and a lot of the standard wear-and-tear is not covered. You can also bet that the dealer will use every trick in the book to avoid paying out when the time comes.

You’re better off banking the cash in a safe investment, earning a few % compound interest per year, and then having cash on hand if things ever do hit the fan. Don’t forget, a lot of the big ticket items are already covered under the standard warranty, so unless you’re buying some cheap car with known problems to the engine, transmission or other major components, you’ll save money and a LOT of hassle in the long run by funding your own minor repairs.

Bottom line: The basic included warranty is good enough.

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