School me on what not to do when buying a new car
 

I'm on a couple waitlists for the GR Corolla and the official announcement is tomorrow. I've never bought a car from a dealer before, let alone a new, potentially limited supply model during huge supply shortages so I'm assuming I'm in a great position to make noob mistakes and screw myself over somehow.

With that in mind, what should I watch out for through the whole process? What kinds of things are normal (but different from a private sale) and what's a red flag? I've heard of things like dealers refusing your allocation if you don't have a trade in or aren't using their financing, huge "market adjustments" etc.

I know nothing about anything here, so hit me with anything you know.

Watch all the add ons when you deal with the finance manager. You don't need most of what they're selling like window coatings etc. Don't be afraid to walk away from the deal if they're pushing all this garbage on to you.

dont openly disclose you're not financing/not trading in

Regretfully, with inventory so low ... the dealer got you by the nutz. You can't negotiate much of anything. Walking is not even a threat to the salesperson. Advice ... just bend over ... and hope that it's not too painful.

Make sure you go through the whole finance office portion patiently and have the Finance Manager explain all charges to you clearly, especially when they present you the bill of sale. The Toyota Canada configurator is fairly accurate in total cost and payment if leasing/financing, so make sure the numbers from the dealer line up with the OEM website. If possible, start the finance office process early - I usually get this process started over email to get some basic stuff out of the way and figure out what sort of finance office I'm dealing with.

The dealership will automatically arrange an ICBC agent to come on the day of the delivery, but you can arrange your own agent as well.

Once it's all over, you'll get a survey from Toyota Canada asking for feedback on your dealership experience. This is a great opportunity to be honest and share your opinion of the whole process, good and bad.

I'm interested in how you organize your own agent. Does it only work if your agent is completely independent/mobile? Because I have plates held with a broker and I want to know how to go about it when I take delivery


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I tell my dealer I will arrange my own insurance agent once they give me a delivery date, then I let my insurance agency or specific agent know that I'm picking up a vehicle at the dealer on the set date. I do this if I am getting a new plate and want to pre-select my license plate, but if you don't care about that then it doesn't really matter.

1. Always be prepared to walk away. Know what you can afford and what you can’t.

2. Be aware of the finance rates. Toyota loves to push their in-house 5.99% which is crazy high. Don’t be shy about “paying cash” by getting a loan from your bank seperately and dealing with them. On those hot-hatch kind of cars, usually around 2.99% is an alright interest rate if you are doing the zero down thing. [edit] this will wildly vary between people and cars. Toyota often offers the Corolla at 0%, but the Tacoma is pretty much always 5.99 regardless of credit score. There may also be ways to get good interest rates through HELOC but that’s totally not my knowledge base, so don’t ask me anything about that.

3. The sales manager just sells you the car. They will agree with a price, etc and have you sign a something they call like a “promise” sheet. It will be what the car is, what price you agreed to, what the taxes will be, and what will be included (winter wheels etc). This doesn’t mean you have bought the car, but it’s to make sure everyone knows what’s going on and you get a copy. You will then be sat down with the ‘finance manager’. They will be the ones to do all the real paperwork and back room stuff with you, but they will also push the extended warranty, undercoating etc etc all the bullshit. Be honest with yourself on how you will be driving, tracking, modifying the car. For a lot of us there is zero point in getting an extra warranty because we will void it.

4. Pay biweekly, not monthly. You pay two more times a year, thus technically saving a bit of interest at the end of the loan. Have the loan set up to automatic debit the same days you get paid, that way by the time you’ve woken up, the car payments have gone through. That way you can’t ever miss a payment.

5. I’ll repeat myself, always be prepared to walk away. I’ll also add on to follow your gut. If something seems confusing, stop and have them explain it. If something feels wrong, follow your gut. They are salesman working on commission, their job is to bleed as much money as they can. Always be careful.

6. For something like the GR, don’t waste your time haggling. You either like the price or you don’t.

7. In the vein of “add ons”. Watch out for what they might call PPF. I had a friend buy a paint protection thing from Volkswagen, the way they explained it was that it was a full clear PPF wrap. Turned out to just be ceramic coating and he way overspent on it. Again, just make sure to use your brain and ask questions

8. Sometimes it’s not worth sweating the pennies if you’re trading in. For example, when I traded in my focus ST for my focus RS. You save the tax value of your trade in for your new purchase, so it’s just some math. Focus RS was 50k, I was offered 19k as a trade in value for the ST. The market price of the ST was about 22k, so I’m “losing” 3k by not selling privately. BUT the 19k tax-wise gets removed from the RS value, so I only get taxed on 31k instead of the full 50k, saving ~$2250, therefore making up that lost gap between private/trading in. I then also saved all the time and stress of selling privately

Experience: not lots. Bought my focus st, my RS and my wife’s flex.

Thanks for all the advice guys, I really appreciate it. I have no problem walking away if I have to, but I also don't want to tell the dealer to pound sand for something that turns out to be totally normal lol.

I already messed that up, I told them I didn't have anything to trade in. Derp. If I end up far enough down the line that the car is more than a year out for delivery I'll likely get something actually worth trading in to get me by in the meantime. I assume they don't want my Jeep :lol

I've been poking around the site, 2.99% is the lowest I've seen and better than what I can currently do privately (just). I'm curious if that has to get locked in when the car is allocated, or closer to when it arrives. I'm also wondering if anyone knows about paying it off early. I assume there's some fee to set up the financing and a fee for just lump sum paying it off? In which case I might be better off paying a slightly higher interest rate using my LOC to be able to do whatever I want to the loan later.

I definitely don't understand what Toyota's "Extra Care Protection" is. I kinda get the longer ones, but when the base warranty is 36/60k why would I pay to have 36/80k? Either way I doubt I'd get one but it's odd.

I'm assuming too that I can just tell them I need time to think about something. Usually when something is on the up and up there's no problem with that, but when it's shady people don't like it.

They usually farm that stuff out too don't they? I might get some PPF and tint but just take it to a local place myself.

On something as hot as the GR Corolla, don't make your life decisions around having it as there's a high chance you either won't get one or it'll be years out.

Ask me how I know *cries in cayman 4.0*

The interest rate from Toyota gets locked in the month you're taking delivery, and the dealership has no control over that. With enthusiast options, Toyota Financial likes to go 4.99% upwards. Some larger dealers also offer in-house financing that can beat this rate.

Most dealers will automatically add the finance fee and a doc fee which you may be able to negotiate away, but in your case I doubt it. They will also want you to finance through them since they get a kickback from the financial services company, and using a LOC is as good as cash payment from their perspective.

radeonboy - Out of curiosity, do you work for a financial services company or dealership?

when i leased my car last year, i didn't realize after the back and forth with my sales guy, there was another stage, the lady that talks lease insurance, requirements, etc, so i ended up paying for a protection package i wasn't expecting b/c i didn't want the hassle at the end of lease if i chose not to buy it out. had i known this part i would have approached my negotiation with the sales guy a little differently.

@glow YES! That’s why I made sure to clarify the difference between the ‘promise sheet’ and what you actually pay at the end. My friend bought a new Subaru crosstrek in 2020, she negotiated an ‘all in, out the door price’ but then clearly the finance manager lady got her and she ended up paying way more than she was expecting, she was furious and even got family involved afterwards.

@underscore yeah you’ll have to talk to a few banks for what their auto loans look like for that month. Usually you lock in the % and the term (in months) and there’s usually never a penalty for early payment/closure (possibly a minimum 3 months tho like you can’t get the loan and pay it off the next day). As for using a LOC it all depends what your comparable % is. Say Toyota is 2.99 and your LOC is 3.99, maybe that 1% extra is worth it to you for the massive flexibility the LOC gives you on monthly payments vs the fixed structure of a normal finance

Maybe another advice is to prepare for a LONG day with sales and finance (like 2+ hrs) .. I've always thought this part is like going to a bad barber that takes 60 mins to do what another can do in 10 mins.

For rates, I've heard good things about Coast Capital Auto Finance. They're quite specific on who they hand loans out to but if you are approved, the rates are really competitive. You won't get an exact rate beforehand, but call before applying to see what their range of rates are at the moment.

A lot of great advices here so I'll just supplement what's already been said:

- Don't be afraid to walk away if there are things you're not comfortable with

- Most people on here will say not to buy extended warranty or any sort of additional things but at the end of the day, it is YOUR choice. It's up to you to decide the value of extended warranty. For the 2 brand new cars I've purchased in my life, I've never had any additional stuff added in which includes extended warranty, paint protection, etc. However, I've been a Service Advisor for multiple dealer brands over the years and there are a lot of scenarios I've seen where it saved the customer some hefty bills.
- Speaking of paint protections, tints, under coating and such, I would highly advise to get this done outside of the dealership for a number of reasons. The first is, most dealers are driven by volume so what matters to them the most is how fast they can be done and not necessarily the quality of them. Even at the dealers I've worked at, I've never had their detail team touch my car LOL. Second, they're usually marked up and in most cases, it's more expensive than the dealer. You're in the Okanagan so it might not work for you geographically but I got my FRS done by Ken at Autowerkes Exclusive (they were RS sponsors for a number of years) 7 years ago and I'm having him do my 4Runner next month.

- Put it in writing that the deposit is refundable. There have been many shady stories about dealers not refunding deposits. Even with a refundable deposit, my gf had trouble getting hers back from a dealership last year and I had to keep pushing to get it back which shouldn't have happened. Glad she didn't get the car from them though.

- I would highly recommend getting replacement car insurance for brand new vehicles.

Nope.

A few other things, from recent experience:

- Warranties: ask about this, lots of manufacturers advertise "5 years warranty" but then only include a limited set of items. For example, 'squeaks and rattles' fall under separate items for most manufacturers and you only get a year of it.

- So then, extended warranty; salespeople and finance will push this, as they get kickbacks. IF you plan to keep the car for a long time (5+ years), then it may be beneficial, new cars are all computers and electronics and they are costly to fix. That said, if they push a "third party" (ie. Great Canadian), then push back and ask for the OEM one. They're better in every way.

Yeah the extended warranty only really helps if you drive a lot or plan to keep it stock.

My ‘14 focus ST was my first new car. I didn’t get extended warranty but I did keep it stock for the 3 year bumper to bumper warranty. Whereas the RS was modified within the month so there was totally no reason to get anything extended

Btw most manufacturers allow you to choose when you want to get an extended warranty. No need to get it when signing, any time up to expiry is allowed. Say your car has been flawless for 3 of 5 years, maybe you won’t want an extended warranty. Whereas maybe it’s been in a few times and needed recall work, by the time you’re nearing the end of the 3/5 years that extended warranty is looking pretty good

While this is true, if you sign in the beginning it's somewhat negotiable because the salesguy has an incentive to sell it to you, and most manufacturers will have higher/pro-rated rates as you near the end of original warranty.

Also if you're financing you can roll it in.

Plus with manufacturer warranties, they usually transfer with ownership, so it looks better when selling/trading in. Some even have clauses where if you don't use it, you can apply it towards the next vehicle from same manufacturer.

for my sub it was all good other than that, prob b/c the lease was what it was. my expectation is that i would just pay for like a detailing at the end before handing it back and not need insurance, but then with door dings chips etc etc and parking in vancouver, i was like f-it.

in the end it probably added another 3-4% to the cost, but i really just didn't want to deal with that hassle of a car dealing telling me what i need to do as they want me i'm sure to give them a prestine car back.

i swear though they really try to make it as confusing as possible with multiple ppl, it felt more complicated than buying my house :lol

The fact you have to prepare to buy a new car and be prepared to swashbuckle through a myriad of ripoffs and whatnot shows how fucked the entire dealership / new car sales model is.

You should enjoy the process and it should be totally transparent start to finish. Sad.

That said my friends experience with Docksteader Subaru getting his 2022 BR-Z was totally without drama and pricing was set beforehand despite it having a lot of hype prior to release.

It's one of the things I really prefer about consumerism in Japan compared to most other countries (especially outside Asia). The options are all there, but everything is totally straight forward and laid out for you to clearly see. Whether it's buying a car or buying ramen from a ticket machine.

With something like cars, they'd offer all the same price-increasing crap, but they'd try to offer it to you without trying to trick you into spending more. If you want it, select the option. If you don't, then don't. You wouldn't have to play any mind games with the sales person, worrying about them simply not selling you the car because they think they'll be able to upsell someone else instead.

Everything is up front, and if it's something with high demand, it would still be super overpriced, but at least they'd be up front about it. No tricks, no mind games, etc.

I would watch out for Langley Toyota and Westminster Toyota if I were you.

I was dealing with Langley Toyota today for a 2022 4runner TRD Off Road. He kept insisting for a $1000 nonrefundable deposit to lock in the deal. They wanted it to be non refundable even subject to finance, so If I was approved for 6% and not the 3.79% from toyota, I wouldnt be able to back out of the deal without loosing the money. They wanted to charge me $1000 over MSRP and wanted to charge $1794 Key Fob protection and BC package "One free oil change, Windshield repair for life, nitrogen in tires" because they don't do documentation fees.

Similar with Westminster Toyota a few months ago, tried to undervalue my trade to "keep their lights on," he only changed his tone after I left a long bad review.