Car Deal Canada

What Not To Say To a Car Dealer in Canada

What Not To Say To a Car Dealer in Canada

I’ll never forget the sinking feeling I had as I drove my brand new car off the dealer’s lot. I was so excited to finally own this sporty little convertible that I had fallen in love with during the test drive. But that excitement soon turned to regret when I realized just how much I had overpaid.


In my eagerness to drive home with that car, I made some critical mistakes during the negotiation that cost me thousands. The dealer saw how emotionally invested I was and played me like a fiddle. I said things I shouldn’t have and ignored red flags that this wasn’t a good deal.


Don’t let the same thing happen to you! Buying a car can be an intimidating process, especially when dealing with savvy salespeople. Saying the wrong thing can cost you big money or give the dealer leverage. Before you enter negotiations, know which remarks to avoid so you don’t end up with major buyer’s remorse.

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Don’t Disclose How Much You Love a Car

When you walk into a dealership and lay eyes on that shiny new car you’ve been dreaming about, it can be tempting to gush about how much you love it. But it’s crucial not to let your emotions show too much or talk about how you’re “in love” with a certain model. The salesperson will leverage your emotional attachment to try and extract more money from you.

By playing it cool and keeping your cards close to your chest, you retain more negotiating power. Don’t give away how enthusiastic you are about a particular car. And definitely don’t use phrases like “I’m in love with this car” or “This is my dream car.” Statements like these give the dealer leverage because you’ve revealed how set you are on that specific model.

Even if it’s the car you’ve always pictured yourself owning, try to contain your excitement. Approach the negotiation with level-headed practicality rather than letting your feelings drive the discussion. The dealer will pick up on your emotional attachment and potentially use it against you by refusing to budge on the price or add-ons.

If you gush about how much you love the car, the dealer may also be less likely to let you walk out without buying it. They know you’ll probably be back because of your strong desire for that model. Play it cool and pragmatic, even if it’s your absolute favorite car. That gives you the upper hand in the negotiation rather than the dealer leveraging your emotions.


Don’t Reveal Urgency to Buy

One of the worst things you can do when negotiating with a car dealer is reveal that you urgently need a vehicle. Car salespeople are masters at detecting desperation, and they will leverage that to their full advantage during negotiations.

If you tell the dealer “My car just died and I need a replacement this week,” or “My lease is up next month and I have to turn in my current car,” you immediately lose negotiating power. The salesperson knows you are in a time crunch and much more likely to pay a higher price just to drive off the lot in a replacement vehicle quickly.

Instead, play it cool and give the impression that you are still shopping around and weighing your options. Say things like “I’m starting to look at some options to possibly upgrade,” or “My lease is up in a few months so I’m starting to explore what’s out there.” Make it clear you are early in the research process and willing to take your time finding the right car at the right price.

The last thing a dealer wants is for you to walk away and keep shopping around, possibly finding a better deal elsewhere. By removing the urgency, you level the playing field for negotiations and avoid getting pressured into overpaying.


Don’t Share Your Maximum Budget

One of the first questions a car salesperson will ask is “What monthly payment are you looking for?” This seems innocent enough, but revealing your maximum monthly budget gives the dealer leverage. They can then work to get you to that payment threshold by adjusting loan terms, interest rate, add-ons and fees. Even if it’s not an ideal deal for you, once you’ve stated your maximum, you’ll feel anchored to it.

Instead, deflect payment questions by saying you’re flexible on the monthly amount. You’re more concerned with the overall out-the-door price. Giving a wide range for your budget also keeps the dealer guessing. You could say something like: “I’m hoping to keep the payment under $400 if possible, but could go up to $450 for the right vehicle.” Now they can’t pin you to a fixed amount.

Know your budget ahead of time, including ideal payment, purchase price, interest rate, down payment, and total monthly expenses. But don’t hand over your maximum limits. Keep the dealer working to find numbers that fit within your flexible range. And compare any proposed deal to your pre-set limits before committing.


Don’t Mention You Have Bad Credit

One thing you should never disclose to a dealer upfront is if you have bad credit or don’t qualify for financing. Dealers make a lot of their profit through financing, so if they know you have poor credit, they will see you as desperate and an opportunity to make money.

Instead of playing into their hands, get preapproved financing before ever entering negotiations. That way, you have concrete terms to reference that put you in a position of strength. If the dealer claims you won’t qualify for certain rates, pull out your preapproval as proof that you already have solid financing.

With a preapproval letter in hand, there’s no need to ever bring up your credit. You already have a lender ready to finance you, so your credit is no longer a factor. Focus discussions purely on the selling price of the car itself rather than monthly payments or interest rates.

A preapproval also shows the dealer you’re serious and ready to buy. That added leverage can help ensure they offer you the best possible deal, rather than trying to profit extra off your financing.


Don’t Say You’ll Pay Cash

One thing you should never mention to a car dealer is that you plan to pay for the vehicle entirely in cash. Car dealers actually make a significant portion of their profit through arranging financing, either by working with banks or their own in-house financing arms. So if you tell the dealer upfront that you’ll be paying all cash for the car, they may be less motivated to give you the best possible deal.

Since the dealer won’t be making any money on financing your loan, they may try to offset that lost revenue by being firmer on the car’s selling price. Dealers get kickbacks and origination fees from lenders when they facilitate financing, so that’s an income stream they don’t want to miss out on.

If you telegraph early on that you’ll pay cash, the dealer may dig in more on the purchase price knowing they won’t make money on the backend with a loan. Your leverage is maximized by keeping your intended payment method close to the vest during negotiations.

You’re better off waiting until you’ve agreed on an out-the-door price before revealing that you plan to pay cash. At that point, the dealer is motivated to close the sale and unlikely to re-trade the deal just because you aren’t financing. By holding back your intention to pay cash until the end, you’ll get the dealer’s best offer without the risk of them inflating the price to make up for the lack of financing profit.


Don’t Share Specific Loan Terms

When negotiating for a new car, it’s best not to lock yourself into specific financing terms like the loan duration or down payment amount. Dealers often ask questions about whether you want a certain loan length (like 36 months or 60 months) or how much you plan to put down. While it may seem harmless to share these details, it gives the dealer insight into your budget and financing abilities.

By keeping financing terms vague initially, you retain more leverage in the negotiation. You want the focus to be on negotiating the best purchase price first. The dealer can then tailor financing options and terms to make the deal work within your budget.

For example, if you say upfront you want a 60 month loan, the dealer knows they can stretch out the payments over a longer timeframe. That allows them to keep the monthly payment artificially low while packing the deal with fees and a higher interest rate. Similarly, revealing your desired down payment amount tells the dealer exactly how much you can spend.

A better approach is to keep your financing terms flexible. You might say something like, “I’m open to considering different loan durations or down payments depending on the best deal you can offer on the car.” Make the dealer work to find loan terms that fit your budget. And avoid locking yourself into a set timeframe or down payment that gives your negotiating power away.


Don’t Reveal Minimum Trade-In Amount

One mistake that can cost you thousands is telling the dealer the minimum amount you expect to get for your trade-in. Dealers will use this number as an anchor to work down from, rather than up to an optimal value.

By disclosing the lowest price you’ll take, you give away all your leverage. The dealer will offer you just above that amount, knowing you’ve already committed to it. You lose any opportunity to negotiate a higher trade-in allowance.

Instead, start higher to negotiate down on your trade-in value. Research the current market value and mileage-adjusted price. Then add $1,000-$2,000 to that number as your opening ask. The dealer will inevitably talk you down, but you’ll end up closer to fair market value.

For example, if your car is worth $10,000, start by requesting $12,000 or $13,000. Even if negotiated down to $11,000, you netted an extra $1,000. Had you asked for $10,000, you might get $9,000 in the end. So don’t reveal your minimum – make them negotiate up.


Don’t Admit How Much You Owe on Your Trade-In

One key piece of information to keep to yourself during negotiations is whether you still owe money on your trade-in vehicle. Revealing that you have an outstanding loan gives the dealer leverage when determining the value of your trade-in.

When a buyer owes money on their trade-in, the dealer has to pay off that remaining balance first before crediting any positive equity towards the new vehicle purchase. For example, if you owe $5,000 on your trade-in which is worth $8,000, the dealer would pay off the $5,000 loan and only apply the remaining $3,000 in equity towards your new car.

However, if you don’t disclose that existing loan, the dealer may assume you have the full $8,000 in positive equity to put towards the new vehicle. This gives them room to offer you less on the trade-in value, knowing that equity will cancel out some of the purchase price. That’s why it’s best to keep the fact that you still owe money private information.

Additionally, admitting you have negative equity gives the dealer leverage to pressure you into accepting a higher interest rate, longer loan term, or less favorable deal structure. Since they know you need help paying off your current loan, they may use that to push terms that are ultimately less beneficial for you.

By not revealing that outstanding balance, you force the dealer to negotiate based solely on the appraised value of your trade-in vehicle. That puts you in a better position to get full fair market value without the negative equity impacting the offer.


Don’t Discuss Mechanical Issues

When it comes time to appraise your trade-in, you’ll want to get as much value for it as possible. That means downplaying any problems or issues, even if they seem minor to you. The dealer will inspect the vehicle themselves, but you don’t need to point out things they may not notice right away.

For example, let’s say your trade-in has a small oil leak that you’ve just been keeping an eye on and topping off the oil periodically. Or there’s a chip in the windshield you’ve been meaning to get fixed. You may know the vehicle inside and out, but resist the urge to overshare.

If the salesperson asks if there are any mechanical issues, simply say it’s been a reliable car for you. Don’t voluntarily mention the oil leak or windshield chip. That gives the dealer leverage to talk down the value and deduct more from your trade-in amount.

Essentially, the less you disclose upfront, the better position you’ll be in when negotiating the value. It’s not dishonest to avoid raising potential problems the dealer may overlook on their own inspection. You want to get as much as possible for your trade-in, so don’t hurt your own negotiation by oversharing.


Don’t Commit to Add-Ons Upfront

When negotiating the purchase of a new car, it’s important not to commit to any additional products or services before agreeing on the price of the vehicle itself. This includes things like extended warranties, rust protection, fabric protection, wheel and tire packages, maintenance plans, etc. Dealers will often try to sell you on these add-ons early in the process before you’ve agreed to a price. However, agreeing to any extras can cost you thousands more and reduce your leverage when negotiating the main purchase price.

A better strategy is to negotiate the best deal possible on just the car itself first, without any extras. Get the dealer to commit to a firm price in writing. Then once you’ve locked in the lowest purchase price, you can discuss any additional products or services. This prevents the dealer from inflating the price of the car itself to account for a big profit on the back-end with add-ons. You’ll likely get a much better overall deal by staying disciplined and not committing to any extras until after you’ve agreed to a purchase price.

Some exceptions are add-ons mandated by law, like a documentation fee or sales tax which will have to be added to the final price regardless. But optional extras like extended warranties are discretionary, so hold off on those until you’ve negotiated the most competitive deal possible on just the car purchase. Don’t let the shiny extras distract you from getting the best deal on the main event.


Don’t Accept Extra Fees

When you’ve negotiated what seems like a reasonable price for the vehicle, don’t let your guard down yet. Many dealers will try to tack on extra fees and charges beyond the agreed selling price. This allows them to effectively increase the price while making it look like they’re honoring your negotiated deal.

Some of the more common junk fees to watch out for include documentation fees, advertising fees, etching fees, nitrogen tires fees, and more. These can range from a few hundred dollars to over a thousand in extra costs. Don’t blindly accept them just because you’re ready to drive off the lot.

Carefully scrutinize all documentation the finance manager presents to you before signing. Make sure you understand every single charge and fee, and that none have been added without your consent. Don’t let them gloss over details or pressure you that this is just “standard practice.” Push back on any fees that weren’t explicitly agreed upon earlier.

You can simply refuse to pay any extra charges. If the dealer insists they are mandatory, be ready to walk out. Don’t let yourself get pressured into accepting fees you didn’t bargain for just to close the deal. Carefully examining the paperwork can save you a lot of money.


Don’t Claim You Don’t Understand

One of the worst things you can say to a car dealer is admitting you don’t understand the negotiations, pricing, fees, or process. Saying something like “I don’t get all of these numbers, just give me your best overall deal” immediately gives the dealer leverage. They know you are overwhelmed and unfamiliar with buying a car, so it’s easy to slip in extra charges, fees, and markups.

Car dealers make money on confusing unprepared customers and taking advantage of their lack of knowledge. Admitting you don’t understand the details of the transaction is like an invitation for them to make more profit off you. Even if you are genuinely confused by some aspects, never let the dealer know that.

Instead, do your research ahead of time so you understand fees like documentation, registration, and conveyance fees. Know the invoice price and fair purchase price for the vehicles you are considering. Learn how to calculate the total financing costs based on APR, loan length, and down payment. Become familiar with common car dealer tricks and tactics.

If you enter negotiations prepared and knowledgeable, you take away the dealer’s ability to pull one over on you. Exude confidence in every interaction, even if you need to fake it a bit. Avoid saying anything that signals you are out of your depth or don’t comprehend the numbers involved.


Show You’ve Done Your Research

One of the biggest mistakes you can make when negotiating with a car dealer is letting them know you haven’t done your homework. Savvy salespeople will seize on your lack of knowledge to manipulate the deal in their favor. So make sure to research pricing, financing, and the car model thoroughly before ever setting foot in the dealership.

Thanks to the internet, you can easily look up fair purchase prices, typical discounts and rebates, financing rates, and the invoice price the dealer paid. Sites like Edmunds, Kelley Blue Book, and Consumer Reports offer this information and can give you an accurate picture of a reasonable offer.

You should also become an expert on the specific car model you want to buy. Look up common issues, standard features, crash test results, and ownership costs. And if possible, join online forums to connect with existing owners who can provide insights.

Let the salesperson know you’ve done your due diligence by asking pointed questions and referencing specifics like incentives, holdbacks, and options pricing. Proving you’ve done your homework makes it much harder for them to pull tricks or make misleading claims.

The more knowledgeable you are, the more leverage you’ll have in getting a fair deal. Don’t let the dealer intimidate you with slick tactics. Enter negotiations armed with research and be ready to walk if they won’t meet your terms.


Be Ready to Walk Away

One of the biggest mistakes you can make when negotiating with a car dealer is seeming overly eager or desperate to make a purchase. Dealers are masters at sensing buyer urgency and leveraging that to increase prices and add on extras. If you act like you “have to have” a certain vehicle, they’ll use that to extract maximum profit from the situation.

Instead, you need to demonstrate that you are willing and able to walk away at any point if you don’t get satisfactory terms. Make it clear from the outset that you are considering multiple options and dealerships and have not yet decided where to purchase. Bring research on other vehicles and prices being offered in your area and mention you are exploring alternatives.

If the dealer won’t meet your target price or tries tacking on extra fees, be ready to stand firm or terminate discussions. Calmly explain the price and terms you require and start gathering your things to leave if they won’t comply. Many times the dealer will call you back with a better offer before you even make it home. But even if they don’t, you can move on knowing you didn’t get pressured into an undesirable deal.

Going in with the mindset that you can abandon talks at any point gives you tremendous negotiating leverage. The dealer will work much harder to earn your business if they know you won’t purchase at any cost. So be prepared to walk out the door, and make that clear from the start.


Conclusion: Avoid These Mistakes to Get the Best Deal

Buying a car is a major purchase for most people. It’s important to enter negotiations prepared so you don’t make costly mistakes. By avoiding the common errors outlined in this guide, you can strengthen your position and get the lowest price.

Go into talks with a budget, target price, and terms in mind. Don’t reveal details about how much you love a certain car, your trade-in, financing, or sense of urgency. And never accept unnecessary fees or commit to extras upfront.

With the right strategy, knowledge, and restraint, you can leverage negotiations to your advantage. Dealers rely on unprepared buyers making emotional decisions. Flip the script by staying calm, focused, and armed with the information here. If you enter the dealership knowing what not to say, you’ll be in a great position to drive away with the best possible deal.

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Questions About What Not To Say When Car Shopping

You should avoid saying things like “I love this car!” or “I need to buy a car today!” as that gives the dealer leverage in negotiations. Also don’t disclose personal details like a max monthly payment or that it’s your first time buying a car. Focus on the purchase price rather than financing terms. Be firm but polite in negotiations.

According to Statistics Canada, the average price for a new car in Canada as of November 2022 was $47,969. This is up 5.3% from November 2021. For used cars, the average price was $31,611, an increase of 13.6% year-over-year. Prices vary significantly by make, model, year, mileage etc. Shop around for the best deal.

It’s possible to negotiate anywhere from 5-15% below MSRP on most models in the current market. Limited supply means less discounting but still room if you negotiate properly. Do research online for fair pricing in your area. Bring printouts to support your target price. Be reasonable but firm in presenting your offer.

Watch for admin fees, documentation fees, licensing fees or prep charges, which can add a few hundred to a few thousand dollars. These are all negotiable just like the car price. Don’t let them present it as mandatory. Also watch for extra add-ons like rust protection, fabric protection etc. Only pay for what you want.

No. Advertised prices almost never include licensing, registration, taxes and other fees which can add up to thousands. Get a detailed breakdown in writing of all charges before committing to buy. This is called the drive-away price. Bargain down add-ons you don’t want. Know the final price before signing.

The best rates come from securing financing beforehand directly with your bank or credit union. This gives you bargaining power. Otherwise dealers can mark up rates substantially if you finance through them. Have a pre-approval letter with rate terms to negotiate the best price separately from financing.

The average down payment is around 15-20% of the vehicle price according to most financial experts. Putting less than 20% down increases your interest rates significantly. Save up an adequate down payment for the most cost effective auto loan terms. Shop your loan through banks before the dealer.

Do thorough research online for pricing data on models you want. Sort by factors like year, mileage, options etc for accurate comparisons. Get a mechanic’s inspection before buying. Check sites like AutoTrader, Kijiji and dealership listings for price comparison. Consider buying from original owners with maintenance records. Negotiate firmly on price.

No. Longer terms of 6-8 years may seem attractive for lower payments but you end up paying way more overall with all the extra interest. Plus you’re still paying on a car after it’s used up. Keep loan terms 3-5 years max for the best financial decision. Focus on total price rather than monthly payments.

Common fees when buying out a car lease are purchase option fees, documentation or administration fees, provincial sales taxes, GST/HST, registration costs, lien registration fees if financing, and more. There could be early buyout penalties too. Get an itemized quote from your leasing provider on the total fees so there’s no surprises.

Do online research on fair pricing for the specific model you want based on invoice price, MSRP, current incentives and market data. Get written quotes from multiple dealers on the same vehicle. Secure financing beforehand. Be ready to walk away if you can’t get close to your target price. Time end-of-month or quarter when sales staff need to hit quotas. Bring pricing evidence to support your offer.

You can ask for free extras like winter tires, roof racks, remote starters etc to be included. Negotiate free oil changes for 1-2 years. See if they’ll waive documentation fees or throw in an extended warranty. Push for the lowest interest rate through dealer financing. Get the sales manager involved to approve concessions if needed.

Yes, the original factory warranty conveys to subsequent owners regardless of it being sold by a private party or used car dealer. The remainder of time/mileage stays with the vehicle. Any extended warranty likely won’t transfer to a new owner however unless specified. Check what coverage is still active when buying used.

Check for any warning lights on the dash. Listen for odd noises when accelerating. Test all controls like heat, radio, wipers etc. Carefully inspect paint, body panels, tires and underside for flaws. Feel brake pedal resistance and acceleration response. Drive at highway speeds. Test parking sensors and backup camera if equipped. Take it to an independent mechanic.

Essential paperwork includes the bill of sale, vehicle purchase agreement, sales contract, loan agreement if financing, safety standards certificate for used vehicles, proof of insurance slip, ownership registration, warranty info and any extras like winter tires. Review all documents closely and get copies of signed paperwork.

Each province has a personal property registry where you can get a vehicle history report to uncover any outstanding loans, liens, accidents, theft or other issues. In Ontario it’s through ServiceOntario. In BC, ICBC provides this service. There’s also CarProof and Carfax vehicle history reports to protect against hidden problems or liens.

Insist on meeting at their residence so you can confirm actual ownership. Ask to see the vehicle ownership, service records, safety certificate etc. Review history reports from CPIC and Carfax for accidents, liens etc. Get a mechanical inspection before purchase. Ensure no payment or loan is still owed. Test drive extensively. Trust your instincts on anything suspect.

The best loan rates come from pre-approvals directly through your bank or credit union, ideally before visiting the dealer. This gives you bargaining power on rate offers through the dealer too. Checking your credit report for errors and maintaining a solid credit score will help secure you the most favorable interest rates as well.

Typically late summer into fall is optimal, around August to October. Dealers are trying to clear out older inventory before new model years arrive. There are also more rebates and incentives offered to boost lagging end-of-year sales. You can get huge discounts compared to other months. Avoid buying in the spring which is peak sales season.

Know your budget. Get pre-approved financing. Research prices thoroughly online. Shop interest rates from banks before the dealer. Bring a friend who’s bought cars before. Don’t feel pressured; be willing to walk away. Focus on total price, not monthly payments. Get quotes from multiple dealers. Inspect vehicle history. Don’t sign anything unless you understand all charges.

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