Confessions of a New Car Buyer – Getting the Best Price

After reading the popular MDJ article Confessions of a Car Salesman, regular reader Lisa went out with her new found knowledge to purchase a new car.  Here is her story along with some new car buying tips.

Thanks FT for asking me to write this guest post.

Myself and my husband were in the market for a new car (our 2001 compact car had 180K and was on it’s way out) and while we did some research on-line, the most helpful information was from Car Cost Canada, which we discovered through reading this blog.  And based on the information, we saved about $1200 on our car purchase – on a car that our salesperson said “never gets discounted.”

Our initial contact with the dealer was to test drive the vehicle.  We felt this was the right car, but you never know until you drive it.  As expected, we loved the car, so we started the negotiation process with the salesperson.

The initial offer he provided us was pretty laughable.  $200 off the MSRP.  We told him that we would think about it (and in our heads, we were already discounting that this was our perfect car!)

And what do I find on my favourite blog the very next day??  Car Buying Tips…Confessions of a Car Salesman….

So we signed up with CarCostCanada (and since we are CAA members, we only paid $30) and we were able to find the wholesale price of our car.  The great feature on this site is it permits multiple inquiries on the same car and it counts as one inquiry.  It was also an eye opener, we really thought there was more margin on cars, but we were wrong.  There was only about $2500 between the wholesale price and the MSRP.  It gave us insight on how much negotiating room we had.  Our intention was to ensure that we got a good price but not to gouge the dealer.

We were also contacted by a dealer that was affiliated with the site.  This was where the fun began….

The affiliated dealer was probably the person that pushed us to buy our car.  He emailed and called within 48 hours of requesting a report from Car Cost Canada.  He was very honest.  Told me that he doesn’t haggle, and that he would sell us the car at 4% above wholesale price.  I was willing to pay 5% so I was totally happy.  The only issue was he was located in downtown Toronto and I live in the suburbs, so I figured I would try the same pricing with our original dealer.  And this is how it went down:

Me: Hi, just wanted to call you to let you know that we have received an offer from another dealer that blows your offer away

Salesguy:  Really?  I find that hard to believe.  We don’t discount this car.

Me:  Well, have you heard of Car Cost Canada?

Salesguy (sounding a little dejected) : Yes…….

Me: Well I have the report in my hand.  I have been offered 4% above cost for the car.  And there is a $500 prepaid Visa card offer.  Can you match it:

Salesguy:  Let me call you back, I need to talk to my manager.

He called back about 1 hour later and agreed to the deal and he also gave me 1% off the GST to compensate for the reduction of the GST in January.  I asked him what the cost would be, and he wouldn’t give me an exact number which is typical.  He did give me a payment amount, which I was able to calculate the amount using an on-line Loan Calculator.  And based on what he told me, it was about $600 more than the agreed to cost.  More on that later…

So we head into the dealership and we start talking numbers.  I tell him that his numbers do not jive and he tried to tell me that the 4% markup was also on the PDI charges.  I had to explain to him that PDI was a fixed cost and should not be priced up.  I finally convinced him that my numbers were right.  From a monthly payment perspective, I think the difference was $10/mth but it was better in our pocket than the dealers!  He had to get his manager to approve the change.

Where we could have done better was the trade-in.  We looked up the black book value and it was valued between $2000-$3500.  He offered us $2000.  My husband counter-offered $2500 as we wanted to get rid of it and didn’t want to bother with a private sale.  He went away for about 10 minutes (by this time, there is a path worn between his office and his manager’s office!) He came back and told us that he couldn’t budge on the trade-in, but he was just informed of a new promotion – a $1500 prepaid Visa – an increase of $1000.  We took it right away.  Probably because at this point we were tired and hungry and wanted the transaction to be over with. (funny how the dealer didn’t mention the $1500 promotion before…)

At the end of the day, Car Cost Canada helped us make our car buying decisions and provided us leverage with the dealer.  My advice is to:

  • Be prepared before you go see the salesperson.
  • Use on-line calculators to calculate payment amounts.
  • Ask for the total cost and not just the payment amount, it makes a difference.
  • Also beware of any additional costs that they try to plug in.  There was a $299 “warranty” cost that we declined and that saved us $250, as we had to pay $50 for the wheel locks.

To recap, this is we got at the end of the day:

  • 4% above wholesale price
  • 1% off the GST
  • $1500 prepaid Visa (that we put down against the car)
  • = $1200 savings (off MSRP) and a brand new 2008 Cross Over Vehicle!


FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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12 years ago

It would help if we knew the make/model and dollar figures involved. Different brands/price ranges make a big difference in terms of what kind of deal you might get.

If I was dealing with someone who wouldn’t give the final price of the car I would walk away.

12 years ago

I have a firm belief now to NEVER buy a new car again, when you can get bigger “value” from used cars that’s 2~5 years old

We just did it, and think about it, for $20K
You can get a brand new 2008 Civic
or you can get a 2004/2005 Audi A4, or a 2004 G35 Coupe

To each hiw/her own though, I am a big fan of used products – electronics, cars, etc…

I don’t want to pay for the depreciation of anything :)

12 years ago


Rod Payne
12 years ago sez: “To each hiw/her own though, I am a big fan of used products – electronics, cars, etc…” Let me tell you this story……….

We had to drive to Calgary two weeks ago, and I decided that my laptop was due to be replaced. Actually, it looks like a prop from the Red Green show – sounds like an outboard motor and the power supply is held in place with duct tape. Buying in Calgary would save me the 7% BC PST, which roughly approximates the cost of the gas and snacks we normally buy on the way out and back.

I hooked up with a friend of mine and we went to Future Shop. I knew the specs I wanted in the new laptop, and everything with the specs was in the $1,000 – $1,300 range (plus GST). Then I noticed one unit with a different coloured price tag and a substantially lower price. The sales rep told me that the unit is an “out of box” model – someone had purchased it, brought it home, and returned it in 14 days. They couldn’t sell it as new, hence the discount.

So, I bought it. List price was $1,050 and I paid $599.96 plus GST. The unit is immaculate, full manufacturer’s warranty, plus the additional warranty my credit card automatically adds to every purchase. Total savings as opposed to buying it at home – $550.54, or 46.4%.

I know this was somewhat off topic, just reinforcing the point.

Cross the River
12 years ago

Of all your usefull posts, I think this one ranks #1. I will buying a new car soon and will definitely consult Car Cost Canada.

Mrs. Micah
12 years ago

One thing I’m really learning from this story is that I’m going to need lots of time and snacks to go car shopping. Otherwise I’ll cave from hunger or leave things unfinished…I can be very amenable when I’m hungry. :-/

12 years ago

Is it frowned upon to bring tupperware with you when negotiating?

Rod Payne
12 years ago

Since it’s your hard-earned (after-tax) dollars that are being negotiated, I would think bringing your own personal chef would be OK. Whatever it takes to tilt the playing field in your favour, as long as it’s legal……..

Cross the River
12 years ago


I think you could use that to make the dealer get hungry and force him to get rid of you as fast as possible with a good offer.

Use their tactics against them… Brilliant!

12 years ago

Ive heard that you should never buy at the same dealership you shop/test drive at. The reason being that if the salesman sees you come back, he knows he has you. The strategy is to casually walk in like its your first day shopping but with all the details you have already amassed from online and the other dealership.

Pride definetly plays into the psche of the salesman, so if they think they just realed in an impulse buyer, it is something they can brag to their buddies about. If you rub all the information you know in their faces, they may resist.

Gates VP
12 years ago

So how did the $1200 compare to the original 4% offer? 4% of 25k = $1000 and 4% of 30k = $1200, so did you end up getting the car below cost?

You avoid listing the actual sale price and estimated wholesale price, so I’m curious as to how much you saved beyond the original 4% offer? I mean, sure it was downtown, but it’s not like you can’t get it “delivered” or something. It sounds like you underwent an afternoon of haggling, but I can’t figure out the value of that afternoon.

I’m happy that you felt you got a deal, but if I had to spend more than 2 hours doing the haggling to save $200 that would’ve been a waste to me.

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12 years ago

I don’t understand why people use the word “myself” as the subject of a sentence. Whatever happend to “I.” Everybody does it but that doesn’t make it right. The word “myself” is a reflexive pronoun and you should just go throwing those about.

12 years ago

…loved the post, though…

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Hmmmm. Sounds like you are affiliated with Car Cost Canada.

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[…] Myself and my husband were in the market for a new car (our 2001 compact car had 180K and was on it’s way out) and while we did some research on-line, the most helpful information was from Car Cost Canada, which we discovered through reading this blog.  And based on the information, we saved about $1200 on our car purchase – on a car that our salesperson said “never gets discounted.” Lisa […]

6 years ago

As my lease is ending in a few months I am doing as much research as I can before being forced to make a decision, either buy my 5 year old civic or go to another lease/finance. After reading this article and the confessions article, I signed up for Car Cost Canada. Right off the bat it’s amazing to the dealer price. Always thought it was more but guess not.

As my lease is nearing its end, the local dealer is trying some lease pull ahead programs which have not been very good as of yet, but the information I’ve learned on this site I hope to use to my advantage when it comes time to make a decision.


Bernie B
4 years ago

Good article. FYI the links to CarCost don’t work. Cheers