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Car buying tips

Buying a car is a big deal. If you're buying new, it's a big enough purchase that you'll probably need financing, and that alone can be pretty intimidating.

Bring up the subject at a dinner party and you're bound to get more advice than you can possibly use. So we asked the experts to share their views on what you really need to know to make the best, smartest decision about how to spend your hard-earned buck.

1.) Know what you need
It's not enough to know what you really want, but also what you need. Many folks have ideas about what they'd like to be seen driving in ("People wear their car as much as drive it," says one industry insider) but before you step into a dealership you should know what kind of driving you really do.

Syed Hussein, a member of the sales staff at Toronto Dodge Chrysler, says, "People should have an idea about a few of the main things they're looking for. We can tell them what is better gas-wise or safety-feature wise if they tell us where they're driving; mostly downtown or mostly on the highway."

So if you live in a condo in downtown Toronto, chances are you don't need a heavy-duty pickup truck. But if you live in northern Manitoba and have four kids, that SUV with the multiple air bags and online help system might be right for you.

2.) Research optional features
Just because you can have something doesn't mean you should. If you live on the west coast, consider skipping the optional air conditioning. If the car comes with a backseat DVD player and you are a single person, who is going to watch it? Bottom line: You can save a lot of cash by resisting the temptation to be one of the cool kids by getting features you don't need and won't use.

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3.) Know how you're paying for it
Financial experts agree it's important to do your homework when financing a purchase. The dealership may offer financing, but it may not be the best fit for you. Visit your bank before you start shopping, check your savings account and crunch the numbers. It's important to know how much cash you can put down and how much you'll need to pay off over the long term before you set a price point for your purchase. And just because you can afford to spend $400 a month, doesn't mean you should.

4.) Take the test drive
While it's possible to shop online and you don't have to drive a car to buy one, there are many subtle variants in how each of us drives. That's why it's important to get the feel of a car before you make it your own. "We always take [customers] on a test drive because they should have a feel for it before they buy a vehicle," says Hussein. He adds people really can't know what they like until they try it and some issues can be solved by choosing a different model. "With some people who are shorter and have a visibility problem, we can get them into something that will make their visibility better," he says.

5.) Consider the source
When you go buy a car, you shouldn't feel like you're walking into a shark tank and if you do, choose another dealership. Car manufacturers are fiercely competitive and profit margins are no longer crazy high. In fact, the profit margin on a car is less than the margin on a new dress -- typically between $1,400 and $1,700 per car, or between five and 10 per cent.

What's more, when you form a working relationship with a car dealer, you are purchasing his or her skills and follow-up service, as well as the vehicle itself. Roger MacPherson, the general manager of Bellamy Kia in Regina, says that a dealership that invests in its people will be more likely to care about what happens to their customers after the purchase is made.

"Cars are appliances. It doesn't matter how nice the thing looks sitting in the showroom, something will eventually break," he says. "I tell people, 'You're going to like us when you buy this new car but when you have a problem, you're going to really like us.'"

If you can find a dealer who can put his money where his mouth is in that scenario, then you've found the person you'll want to do business with.

Stephanie Farrington is a Canadian writer living in North Adams, Mass.

-- Posted January 11, 2012
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