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Tips for Finding the Best Deal on Your New Vehicle

By Jacob Henriksen-Willis

Published July 26, 2023 • 5 Min Read

Buying a vehicle is one of life’s biggest (and most exciting) investments. Your auto contract will impact your finances for years to come — so knowing how to negotiate effectively can be empowering as a buyer and may save you thousands of dollars in the process. With some research and knowledge, you can confidently navigate the car-buying process and secure the best deal on your next ride.


A little advance work can help ensure you’re in the best position to negotiate with a dealer. Here are ways to prepare before you walk into a dealership:

Set your budget

Understanding how much you can afford will help you set a baseline for your negotiations. Take a look at your monthly income, existing financial obligations, and what you’d like to set aside for savings or emergencies. From there, you can determine what price range to look at.

Remember to plan around the total cost of ownership when looking for a vehicle, not just the purchase price. Consider expenses such as insurance, fuel costs, maintenance, and potential repairs. These ongoing costs should be factored into your budget to ensure a comprehensive understanding of the financial commitment of owning the vehicle.

When you know what you can afford and communicate that to the seller, you can ensure the conversation stays within your financial means and prevent unwanted surprises.

Know your auto’s value

With your budget in mind, it’s a good idea to do some research before you head to your dealership to find the best options within your price range. When you understand the market and what’s available elsewhere, you may feel more secure during negotiations. Look at resources such as Kelley Blue Book Canada and Edmunds to find the value of your desired vehicle’s make and model, and make sure your dealer is offering similar numbers. Also,if you’re trading in a car, know its value before you negotiate.

Know your credit score

If you plan on taking out a car loan to finance your vehicle, most of the conversation will be centred around your interest rate — the fee you pay your lender for the privilege of borrowing money from them. According to Statistics Canada, the average interest rate for a car loan in Canada is approximately 7.69 per cent as of April 2023, so you can use that as a baseline to ensure you’re getting the best deal.

That being said, your interest rate will vary significantly based on your credit score. With good credit, you may be able to secure lower interest rates and more favourable terms on your loan.

RBC clients can check their scores for free here.

Hunt for discounts

Keep an eye out for any special offers or discounts available at local dealerships. “Employee pricing” is a common offer among various dealers — essentially, you are offered a discount similar to what an employee of the car company would get. Employee pricing is not offered by all manufacturers and does not cover all models, so check to see if the car you have your eye on is included in the offer.

Some dealerships will offer 0 per cent interest deals on car loans to customers with good credit. These loans don’t charge any interest for a set period of time — but may charge higher interest once that term is up. Ensure you understand the full terms and how much you’ll be paying for the duration of the contract before you sign.

Cash back rebates are also often offered by dealerships to encourage sales. Essentially, you are given back a portion of your purchase, usually either via check or directly taken out of your down payment. Either way, this will lower the cost of your purchase and make budgeting a bit easier.


Once you’re ready and knowledgeable, it’s time to head to the dealership and negotiate the best deal for you.

  • Trust your research and be confident! Remember you and your dealer have the same goal: to get the deal done. If you’ve been pre-qualified for a loan, it may even be easier to negotiate with the dealer while staying firm on your budget.

  • Don’t be afraid to go to other dealerships if the first dealer won’t budge on a price over market value.

  • Exploring other options is a great way to discover better prices and potential discounts. This strategy will take longer, so if your goal is to get a car quickly as possible, it may not be an option.

  • Keep things centred around the total price to avoid unwanted surprises.

In conversation, the dealer may shift the discussion from the total cost of the vehicle to monthly payments. A tactic that is often used is an offer to extend the loan duration to make your monthly payments more affordable — but with interest, this may increase the amount you pay over time.

Read next: The Top 3 Considerations When You’re Choosing a Car

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Looking to buy a new car?

Find out how much you can afford before visiting a dealership.

Check out RBC’s Car Loan Payment Calculator and options to finance your new vehicle.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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