Feb 4, 2026
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New cars can be appealing — you’re getting the latest safety tech, a fresh warranty and (often) better fuel efficiency than older models. But the biggest cost driver for most Canadians is still the sticker price (and the interest you pay if you finance).
AutoTrader’s Q4 2025 Canadian pricing data (1) puts the average new vehicle price at about $63,439, while the average used vehicle price is about $35,201 — a gap that can dramatically change what you’ll need to save and what your monthly payment looks like.
If your car is on its last leg, or if you’re searching the market for your first car, you should arm yourself with a few tools so that you can save money on your new car purchase.
More research = less time and money wasted
Gone are the days when the car salesman had all the information and you, the customer, walked blindly into the dealership. Now you have just as much access to information as the dealer, and even the dealers themselves will tell you to start your initial research online.
“You really want to look online because everything is on the internet right now,” says Richie Xu, new car sales manager at Honda Downtown in Toronto, in an interview with Money.ca. “People just don’t have the inclination to walk into the dealership and trust a salesperson unless that salesperson is someone they already know and have built a rapport with.”
Cut down on time (and money) spent going from one dealership to the next by reading online reviews for the make and model you have in mind, and create a backup list of similar options that might be more affordable.
Platforms like CarGurus make car shopping simple. Compare thousands of listings from licensed Canadian dealers, and use their “Instant Market Value” tool to give you a clear snapshot of what a car should cost in your area, so you can avoid paying more than you need to.
How long should you spend in the research phase? About two months according to James Matthews, president and CEO of Armada Data Corporation, parent company of Car Cost Canada — a free service that reports on hidden auto costs and available dealership incentives.
“You need a minimum of 60 days to really do thorough research when you’re deciding the kind of car you want to buy, because before you even buy a car, you need to decide what make and model is for you. And you don’t just want to choose a car on a whim because your neighbour has the car or something,” says Matthews.
Once you’ve narrowed your shortlist, try to compare trims and features in one place before you spend weekends driving dealership-to-dealership. That can mean a major auto show, but it can also mean OEM comparison tools, trusted review sites and side-by-side walkarounds from the comfort of your computer. The goal is the same: reduce “decision fatigue,” avoid impulse upgrades, and show up ready to focus on the out-the-door price.
Find the real car cost
After finalizing the make and model of the car you want, go to a site like Car Cost Canada, or one of its competitors like Unhaggle, to make a potentially intimidating negotiation process much smoother.
Whatever online platform you choose to work with (I recommend trying more than one), they usually start the same way: You enter the make and model of the car you’re seriously considering and you’ll be given a list of various class types of that car with all-wheel or two-wheel drive. Choose the class you’d like and, after signing up for free with an email, name and password, you’ll be taken to a dealer report for your chosen car.
Both Car Cost Canada and Unhaggle dealer reports present the dealer invoice price — what the dealer pays the manufacturer for the car — as well as the Manufacturer’s Suggested Retail Price (MSRP).
Xu says that most dealerships add an average markup of 7% to 8% on the dealer invoice price when retailing to consumers. Knowing this helps you find the deals. For example, if the MSRP base price is $25,400 while the dealer invoice base price is $24,003 that means the dealer markup is only 5.8% — making it a competitively priced vehicle.
Another option is to use online car marketplaces, like CarGurus, that provide insight on whether or not the dealer’s price is high, fair or good value. By using CarGuru’s “Instant Market Value” tool you get a clear snapshot of what a car should cost in your area — and avoid paying more than you need to.
Get ready to negotiate
In addition to providing the dealer invoice price and the MSRP, good auto search platforms should also provide a list of cash incentives, financing incentives, leasing incentives and rebates available for the cars they catalogue. This allows you to see all the possible discounts you may be offered when at the dealership.
“What we recommend is getting the free dealer’s report on the car you want and then doing it again with the same make and model in a different class. Print all that off and take both reports to the dealership and negotiate based on that,” says Matthews.
Once you have your reports, use online tools to help you narrow down the car you want to buy. For instance, platforms like CarGurus help you compare thousands of listings from licensed Canadian dealers — before you commit to buy.
“A lot of people don’t realize the best way to get a deal is to let the salesperson know that you are buying a car today, instead of giving them the impression that you’re just shopping around. No one wants to waste their time,” adds Xu.
Seasonal selection and other tips
Dealers like Xu concede that there are certain times of the year when a manufacturer sweetens their incentives and offers are at their lowest.
“It always depends on the manufacturer, but normally a good time to buy a car is March, April, or September because we’re in Canada and retail business is slow from the end of October to the end of February,” says Xu.
“Spring is when everything resumes, so you’ll see more aggressive pricing and in September they’re going towards that slow season, so they want to make a final push to clear inventory,” he adds.
But Xu also recommends not taking those incentives too literally.
“Those commercials usually say up to 0% financing and that “up to” is pretty important. Cars are like any other product; if they are popular, there’s not going to be any incentives. The incentives are usually on the least popular models. The trend is to only buy the car you want, not a lot of people buy a car just based on getting a cheaper price.”
Consider the cheaper option
Putting in the two months of recommended research and utilizing online car shopping platforms may lead you to realize that there are more affordable options out there than the car you originally intended to buy. If you see a chance to buy a cheaper vehicle that still meets your needs, jump on it.
For many Canadians, buying a new car means taking out a car loan. But if you’re financing, don’t negotiate only on purchase price — negotiate on the out-the-door price and sanity-check the overall cost. Autotrader’s Dealertrack data report indicates payments on new vehicles hover around $1,000 per month in Canada (2), while used-vehicle monthly payments average about $637. That’s why even a small price reduction — or choosing a lower trim — can matter more than ever.
If you do opt to finance your new car purchase, keep in mind that your credit score will come into play, so it’s best to check your credit history and confirm your credit score before applying for a loan.
— with files from Romana King
Article sources
Autotrader (1, 2)
Aaron Broverman is a freelance writer based in Toronto. When he’s not writing about money for publications like Yahoo Canada and Money.ca, you’re likely to find his nose in a comic book. He likes comics so much, he hosts a podcast called Speech Bubble where he interviews those involved in the comic industry. You can follow him on Twitter: @broverman.
