Buying a car can be an intimidating experience: you’re preparing to fork over a big chunk of your hard-earned savings; you’re committing to a significant monthly expense; and you might not know enough about cars to feel confident as a buyer. If you’re preparing to buy a car, whether new or used, these basic principles will help you when it’s time to make your purchase.

Determine your must-haves

Make a list of must-haves and nice-to-haves, and then keep this information close by when it’s time to start shopping. Start by reflecting on why you need a car so that you can determine your priorities.

  • If you’ll be on the road a lot, fuel economy will be important so that you’re not wasting lots of money on gas.
  • If you’re driving in the city, you might want to consider a smaller car that will be easy to maneuver and park on congested roads.
  • If you have a family, space for car seats and strollers might be a priority.
  • If you take a lot of road trips, a navigation system could make your life a lot easier.

Create a budget

Owning a car isn’t cheap, but it shouldn’t break the bank either. Before you start looking at cars, its important to determine how much you can afford for a down payment as well as monthly car payments if required.

This is a good time to do some research on the true cost of car ownership; the average Canadian spends around $9000 a year on one vehicle. If you’re like most people, you need to plan for this expense. You’re not just budgeting for your monthly payments, but also for insurance payments, gas, regular maintenance, licensing and registration and emergency repairs. When you take these factors into consideration, you might realize that you need a lower monthly payment than you originally expected.

Do your research

It’s time to find your dream car! Using your budget and your list of must-haves as a roadmap, start looking into what makes and models best meet your needs. You can start by looking for the most popular cars (people are buying them for a reason) or the most cost-effective cars (your bank account will thank you). You can read reviews online, visit the dealership to ask your questions in person, and talk to friends and family about what they love and hate about their current vehicles. Compare how cars on your shortlist stack up to your budget, your must-haves and you’re nice-to-haves. Don’t forget to research car insurance options. You might be surprised to find that rates will vary from one insurer to the next, so don’t

settle for the first quote you get.

Go for a ride

Studies have shown that almost 16 percent of people forgo a test drive when buying a car, but you shouldn’t skip this important step. For new vehicles, it will give you a sense of whether or not you feel comfortable driving the car and will help you decide if it meets your expectations. When you’re stuck between two comparable options, the test drive might make the decision for you. Test driving becomes even more important when you’re buying a used car, as you’ll get a feel for whether or not there are little problems or quirks that the owner failed to mention.


For a lot of people, negotiating can be the toughest part of buying a car – but you might lose money if you skip this step. You’ve already done the groundwork for your negotiation through your research and budgeting: you know what questions to ask and what you can and can’t afford. Be prepared to say no to extras the dealer tries to tack onto your sale price and ask to cut administration fees. Also, you might be able to negotiate a better price depending on the timing of your purchase. Many dealers who are looking to make monthly or yearly quotas offer better deals at the end of the month or year, or during the winter when sales are slower. If you’re buying a used car, your research should give you an idea of whether the seller’s price is comparable to others in the market. You also might want to have the car inspected to determine if there are any pending repairs that will cost you additional money so you can knock those extra expenses off the sale price.

Whether you’re buying new or used, you’ll be investing a lot of money upfront and long-term to your purchase. This isn’t a decision that should be rushed, so take your time, do your research and commit to finding a car that you’ll love driving for the next few years.