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6 Secrets that Canadian Car Dealers Don’t Want You to Know

6 Secrets that Canadian Car Dealers Don’t Want You to Know

Going to a car dealership is a lot like walking through a minefield. You’ve got to know where all the bombs are buried so you can walk out alive. The car buying process is laid out to extract the maximum amount of money from a consumer. To help you avoid the mines, here are some of the top secrets that car dealers don’t want you to know.

1. You Could Save Up to $10,000 Driving a Few Hours South

Importing a car into Canada takes a little energy but can result in big savings. By importing a car from the U.S. you can save 20-30% off the price of a new vehicle. Incidentally, that’s about the same percent a new car depreciates when you drive off the lot. So another way to think about it is you are completely wiping out that depreciation.

What’s your time worth? Let’s say you spend 4 hours working out a deal before you leave home and another 10 hours picking up your car, filling out paperwork and going through Customs. If you saved $10,000 on a car, that’s $714 per hour. Even if you only saved $5,000 on a car, that’s still $358 per hour!

2. Buying Based on the Monthly Payment is the Wrong Mindset

One of the first questions a car salesman will ask when you enter a dealership is how much do you want to pay per month. This is a devious little trick! Once you commit to a monthly payment amount, they can sell you a more expensive car by changing the financing terms. By adjusting the interest rate, length of loan, or down payment amount, they can fit a wide range of car prices into the same monthly payment.

Plan your budget around the total price of a car and calculate affordable monthly payments at home using an online loan payment calculator. When talking to a salesman, only negotiate based on total price, not the monthly payment.

3. Everything is Negotiable

Everyone knows that the price of a car is negotiable (and to see just how negotiable, Car Cost Canada is a good resource). But, did you also know just about every other aspect of a car sale has some wiggle room. The amount of your trade-in, the interest rate offered, and the amount you pay for an extended warranty can all be negotiated. You can even negotiate maintenance appointments and car washes.

4. Sometimes the Salesman Needs a Deal More than You

Both salesman and dealerships have monthly sales quotas that are tied to compensation. Salesmen are much more likely to give you a bigger discount at the end of the month when they are trying to meet their numbers. Often times the amount of bonus tied to selling several cars will greatly exceed the loss made on a single sale. If you time it right, a couple hundred dollar discount for you might be profitable for a salesman if they are poised to make a thousand or more in bonus money. For the best deal, start the car buying process in the last couple days of the month.

5. Your Trade-In is the Second Biggest Money Maker for a Dealership

Car dealers know you have a limited number of options to get rid of your old car. So they will buy it from you for as little as possible and turn it around for a hefty profit. Before you go to a dealership, do some research on to find out how much your car is really worth. Consider selling it to a private party if you’ve got the time or bring an appraisal with you to the dealership to ask for more money.

6. The Finance Office is the Biggest Money Maker

Most people put all their effort into negotiating the price of a car and then let down their guard. Car salesman encourage this. After you settle on a car price, they will congratulate you and make you feel like you’ve won the lottery. But there’s more work to be done. The Finance Office wants you to use their financing and buy warranties, insurance, and add-ons like rustproofing and fabric protection. All of these items have very high profit margins for dealerships, but most are unnecessary. Shop around for financing and insurance outside the dealership and you’ll likely find much better deals.

Do you have any tips that car dealers would prefer to be kept a secret?


  1. Sustainable PF

    Great stuff CNC. Importing is definitely the way to go if you truly want to save.

  2. Doable Finance

    It’s not just specific to Canadian market. It’s everywhere. Neither the manufacturer nor the dealer would want you to know “nothing.”

    The dealer knows how much he paid for the car. He would always make profit on the new ones and the used ones. He would lose money when customers stop buying and he continues to pay interest on his inventory.

    Once he is able to sell one car, he makes money including interest he paid on the car.

  3. Tax Giy

    Yes, the financing office is a big money maker. Be aware that the dealer may be less willing to negotiate on price if they know you will not be financing through them. If you have the funds available and don’t need to finance, you might want to finance anyway: negotiate with the dealer and agree to finance and see if you get a better deal. You may save a couple of thousand dollars and pay a nominal amount of interest (pay the loan off immediately!).

  4. Car Negotiation Coach

    Thanks SPF, and I appreciate the proof-reading as well!

  5. kyle

    Great tips, better than the usual “Do your research” cliche. In regards to American savings I have found the price of cars start to get fairly comparable over the last few years. There is still a definite difference in higher priced/luxury cars, but on your average 4 year-old sedan there isn’t much difference (on the Manitoba-North Dakota border at least).

  6. Virata Gamany

    Definitely insightful. I’ll have to Re-read this before making my purchase.


  7. gloria

    This article underlines the fact that it is definately worth it to do your homework before buying not only the price but for reliability over the time you plan to own your car to minimize upkeep costs.
    First figure out the car models you want to purchsse then go to the library and check Consumers Reports auto review for new cars…also available for used cars. Many models have a continuing negative history of problems.Why buy a car like that? As long as we continue to buy cars with a poor performance history, the manufacturers will continue to build them.
    Second,after narrowing down your choices to say 1 or 2 models then get out to the lot on a Sunday to check them out without the sales rep hanging over your shoulder.Are you still interested? go online to the dealer or get some brochures.
    Also scan the newspaper auto sections to see what deals are on. Does anything appeal to you? Does it work for your budget?
    I went online to Car Cost Canada and for a very small fee got some excellent coaching as to how to do the deal…(deal first on the price you will pay then go to the trade allowance) and a better breakdown of the prices and where to start negotiations.They also had referrals to the participating dealers. There are other sites that offer this service.
    Plan your purchase a few weeks prior and end of month is good especially during summer and winter months.
    I took some time 4 years ago and again last year to do this and ended up with a better deal and a better vehicle that had minimal upkeep. It’s worth the effort and you will be better equipped to do the deal. I am 65 years old and you can do this too. Good luck.

  8. online marketing

    I’ve read countless other books about saving, investing and spending. This is one of the best, if not the best book so far, this still helps.


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  10. Johnfish

    Hogan Chevrolet Toronto
    “False Advertising, Bait and Switch, Crashed Rental Car Fraud”
    We saw a 2013 Chev Impala on their website with 36,000km for a decent price. Went in cash in hand, took a test drive. Car drove perfect, like new. Not a mark on it. Perfect. Salesman said it was a lease car, but only for 6 months and then one of their employees drove it. We made a deal and put $1,000 down. Then later the story changed to it was a Daily Rental car. Sleazy, but it seemed in good condition. No mention of Daily Rental on the web ad. We picked up the car paying with a certified cheque. They made a big fuss, made us pose for a photo, lots of BS distraction. Driving it home we noticed the shocks were really rough and it pulled to the right. Having a closer look, there was a hole in the hood that had been retouched, white paint smudge on the black trim and the mileage was 47,000km! It was a different car! Looks like they switched cars for crashed rental car! Rental companies don’t have to report crashes to CarFax and Hogan Cherolet uses this to defraud people. They had lied about the mileage in the Internet ad, falsified the Bill of Sale and the Government Vehicle Inspection with the lower mileage. The warrenty they gave us was based on the fake mileage, so it was already expired. Fortunately, we have an email sent by mistake by the Sales Manager proving the mileage was 47,000 when we picked it up. When we complained and asked for the correct car we test drove, they offered us $500 “for their small mistake”. Quite a “mistake”! Like trying to steal something, then saying “you forgot to pay” after you are caught. This 9,000km difference in mileage is a year’s driving for us. It is about 10% of the car’s lifespan. Looks like this one needs some major repairs too. $500 was not a fair offer, it was a joke! Then they said they would find us another car with the correct mileage in the same condition as the one we test drove. For over a week we were ignored by the Sales Manager. Finally we got a hold of him and he said he was unable to find a car with that milage for that price. He had basically lied to us hoping we would give up and go away. He said that cars with that low a milage went for a much higher price than we paid. This is classic “Bait and Switch” fraudulent advertising. Advertise a car with low mileage at a good price, then switch it for another with high mileage in worse shape Now he is demanding we bring the car back for a full refund. This is the only option he says, no partial refund, no negotiation. This is not a viable option for us as we have already laid out over $1,000 in expenses which will have been for nothing! Not to mention the stress of four weeks of harrassment! They are now ignoring us again. We will soon have to take them to court to recover some of the money they cheated us out of. It has been a nightmare experience for us and it’s still dragging on! Don’t get trapped by these fraudsters like we did! All we did was shop for a car there and now we are stuck with this huge legal hassle! We did some research on the Internet and found out these crooks have had many charges against them for exactly this type of fraudulent activity. They are basically criminals posing as a GM dealership. Avoid doing business with them at all costs! Here is one where they were fined $12,000 for cheating a bunch of people the same way they cheated us: There are lots of other complaints too if you search on Google. Beware! Very sneaky crooks! Don’t get cheated like we did!

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