The best time to buy a car in Canada

Tyler Wade
by Tyler Wade February 26, 2020 / No Comments

The best time to buy a car in Canada is generally at the end. The end of the year, the end of the quarter, or the end of the month. You can even tie it to the end of the car’s model year, end of its design cycle or even life cycle.

Dealerships are looking to offload cars at the end of those periods to hit sales quotas. They’re also looking to sell-off cars at the end of a life cycle to make room for the newer models. 

But, really, the best time to buy a car is when you need one because you can focus on things that matter to you at the time. A new job that requires a vehicle? Maybe think about fuel economy. Your car just died, and you didn’t budget for a new one? One of the cheapest cars to buy is likely on your radar. A new family member on the way? Perhaps one of the best SUVs will do, or one of Canada’s best pickups if you need the extra storage.

If you’re only starting your research for the baby due in 6 months, or if you’re planning on buying a new home outside the city, we dig into the best time to buy a car.

The best month to buy a new car

Staying on the theory that the best time to buy a car is at the end, the same holds true for the month. December, the end of the year, is probably going to be the best time. But, if we follow discount trends, the most discounted months are October and November. The months with the least discounts are January through to April, and you can still find some discounts between May and September. 

According to Edmunds, the month with the smallest discount off of the manufacturer’s suggested retail price (MSRP) is February, with an average discount of 5.7%. December features the highest discounts, but so much more.

Dealers are looking to sell any excess inventory from the past year to make room for the newer models that arrived in October. The salespeople are under pressure, the dealerships will incentivize, which gives you lots of negotiation room, especially when it comes to upgrades. 

If a model is being discontinued, you can be sure to find a deep discount.

December is also bonus time for the sales staff. Most of the sales team will work on commission – the more cars they sell, the more they earn. Dealerships may offer their sales staff a year-end bonus based on how many vehicles they sold throughout the entire year. If 5 more cars “unlock” a new bonus level, they’ll really try to get you into a new vehicle.

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Best day to buy a car

We’ll start at the end, the best time to buy a car is in the last few days of the month. Again, this is mostly due to commissions and hitting sales quotas before the month is out. If the salesperson has already hit their quotas for the month, they may be less inclined to offer a discount. If you conducted a test drive earlier in the month, received a quote, and you can afford to wait on the purchase of the car, it might be in your best interest. You know when you abandon a shopping cart on a website, only to get an email offering a discount on the product you were about to buy; the same idea applies here.

On another note, if customer service is essential to you, go to the dealership early in the week. Dealerships are slower at the start of the week and busy on the weekends. If you want to negotiate through a quality relationship, make the connection when the sales rep has more time to give to you.

Here are 9 mistakes to avoid when buying a car.

  • Focusing too much on price – Your monthly payments are cheap with a 7-year auto-loan, but you’ll pay far more than if you bought the car outright. Focus on the payment, not the price
  • Not comparing car insurance – your monthly insurance could be as much as your monthly budget for car payments. You don’t want to be in that position.
  • Not looking at the total cost of car ownership – gas and maintenance also play a significant role
  • Buying a car on one visit – you need time to collect your thoughts and make a decision without pressure
  • Don’t buy under pressure – there are plenty of cars. Take your time. Don’t buy a car you don’t like or doesn’t fit your needs because it’s a good deal for one day only.
  • Skipping a test drive – How does it handle turns? Do you like the stereo? How about its acceleration? How about cargo space? A test drive allows you to think about how you’ll be using it. Don’t pass up on the opportunity. 
  • Forgetting your trade-in – Know the approximate value of your trade-in by doing some quick online searches. A dealership will likely lowball the offer, could you have done better selling it privately?
  • Not negotiating – Check to make sure the incentives are included and ask about every line item on the invoice. The dealership’s administrative fee can probably be reduced. Extras have a tendency to snowball.
  • Don’t stop until you’re off the lot – After the salesperson, you’ll likely be pushed to someone else selling warranties, rust protection, and other add-ons. Before you go in, know whether you want them or not. 

 

Best times to buy a car – models, designs, and life cycles

End of model year

I’ve always found it weird that new model-year cars are announced at the end of the summer, which precedes the actual new year. For instance, the 2021 models will be available in August of 2020.

The bonus for you is that August and September are when dealerships are making the transition into the new model years. Dealerships raise the incentives and offer great financing on the last years models to expedite the change

NOTE: if you plan on leasing a car, know the newer model may include extra incentives and make sure to compare the two vehicles against one another.

End of the design cycle

If you’re a bargain hunter, this could be a great play when you’re looking to buy a new car. The car’s engine and performance may remain the same, but the exterior will step into the future. Should the design of a vehicle not matter to you, know that a dealer will try to get these “older” looking cars off the lot to showcase the new goods. Buy the old stuff – it’s a great time to buy a car when the dealership wants to reinvigorate their showroom.

End of life (cycle)

Why an automaker is discontinuing a model should be your first concern. If reliability is an issue or too many recalls, it’s probably best to ignore the car. But, let’s say a car is being discontinued because of changing trends. For instance, Ford discontinued the Fiesta, Taurus, Fusion, and the Focus sedans because car buyers are more interested in SUVs and fuel-efficient trucks. If you were looking for a car in 2018/2019 – it was a great time to buy a Ford.  In 2020, nearly 90% of the Ford portfolio in Canada consists of SUVs, trucks, and commercial vehicles.

The parts will still be readily available, and the cars will be serviceable for years to come. The price will never be lower.

Best Canadian holidays to buy a car

Long weekends are a great time to buy a car. Sticking with “the end” as being the best time to buy a car, don’t use New Year’s, Family Day, or Easter to buy a car. Labour Day, Thanksgiving Day, and Boxing Day are probably the best holidays to buy a car in Canada.

Many people use long weekends to buy a car because they don’t expect the dealership to be busy. Be prepared, and you can take advantage.

Before the weekend, understand how much car you can afford based on your budget, (10-15% of your take-home pay), your decisions on leasing vs. buying, and narrow your car choices down to 2-3.

Get pre-approved for your car loan with your bank and the dealership. It doesn’t mean you’re taking the financing, but at least you’ll know who is offering the best rate.

Read reviews, look at the price of the used version, locate your car and set up a test drive. 

If you have a trade-in, know its value. Check car insurance quotes to see which automobile offers the cheapest insurance.

The idea here is to walk in, paperwork in hand, and all you have to do is sign paperwork. You make a much more attractive client if the salesperson can close a deal without any hassle or stress. The more you know, the more comfortable you feel, and the more confidence knowing you got a good deal.

Finally, opt to pick up the car after the long weekend. It’s tempting to drive home in your new vehicle. Still, if you can wait, you might get special treatment, including detailing and a laid-back walk-through the key features the car has to offer.

Switching insurance companies after buying

If you bought a new car, congratulations! Speak with your car insurance provider about insuring your new vehicle. Should the new provider want too much money, compare auto quotes to find a new provider. You can cancel with your old provider, but it’s best to know the process. For instance, typically, a policy is set up for 1 year. 

If you’re cancelling mid-policy or halfway through the year, you could either be prorated or short-rated. In short, a prorating won’t hurt you at all, a short rating may incur a fee or penalties for early cancellation. If you found a cheaper car insurance quote, however, you could be saving more than the penalty or expense is worth.

Read our blog on how to switch insurance companies 

The Bottom Line

The best time to buy a car is when you have the money and available time to shop around. Avoid the common pitfalls, understand how much you can spend, and hopefully spend less. That’s the real win. 

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