How to Save Money On a Luxury Car

The plush seats. The engine purr. You want the joy of driving a luxury car without the wasteful price tag. Here’s how to do it.

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Any vehicle can get you from point A to point B. But once you’ve spent a moment behind the wheel of a luxury car’s purring, powerful engine, surrounded by all the creature comforts and state-of-the-art safety features, you can’t go back.

Of course, these cars don’t come cheap. The Audi Q5 SUV has a manufacturer’s suggested retail price (MSRP) of about $54,000 while a Mercedes-Benz GLC sells for $63,800. There are ways, though, to get your dream ride at a discount. Here’s how.

Dealerships have monthly quotas for their sales force to incentivize them, and to earn manufacturers’ bonuses, so you can often get a deal by buying at the end of the month.

Shop around

The pricier the car, the more profit the company is making, so you can comparison shop and negotiate. Remember, you’re negotiating how much profit the dealership makes, which will pretty much never dip below the wholesale price.

When you see the “dealer invoice” price advertised, that’s a gimmick and not what the dealership actually paid for the car. Also, read all the fine print in ads to see what’s not included in the advertised price. If a dealer offers you a choice between an upfront rebate or low-interest payments, take the rebate, it will often be worth more than you’d pay in interest on a personal loan or line of credit.

Finally, if you don’t feel you’re getting the best deal, “You’ve got to be willing to walk away,” says Viraf Baliwalla, president of the Automall Network in Toronto, a car brokerage. Someone else will be hungry enough for your business.

Hire a broker

Time is money, and if your time is worth more at work or play than kicking tires on a car lot, consider outsourcing all this comparison shopping to a broker like Baliwalla. He claims his experienced staff save buyers “at least two times,” but often more, than the $300 flat fee they charge. (They’ll source at dealers, but also at auto auctions, where deals abound.) Do your homework though: some brokers who offer “free” services get paid via kickbacks from the dealers.

Timing is everything

Dealerships have monthly quotas for their sales force to incentivize them, and to earn manufacturers’ bonuses, so you can often get a deal by buying at the end of the month. But that doesn’t mean the last day of the month is always the best; the dealership may have already met their quotas by then.

March through May is the best time of year to buy a car. New models are coming out, and dealers want to clear the older models off the lot. But by late spring, it’s less likely you’ll find a remaining model with all the features you want.

Lease for less

Generally, buying is a better financial move than leasing: at the end of a lease you walk away with nothing, whereas once your loan is paid off you own the car.

But, if you like to experience a new car smell every year or two, leasing allows you to do that at a lower monthly payment than buying.

He also advises anyone who leases to not put any money down upfront. If the vehicle is stolen or written off in an accident, you won’t recoup that money.

Buy recently used

New cars lose value as you drive them, and the pricier the car, the bigger the drop. Let someone else take the financial hit and buy a gently used car that’s still under the manufacturer’s warranty.

You can pay a premium and buy used from a dealer and get their OEM (original equipment manufacturer) warranty, or get a thorough inspection from a trusted mechanic (starting at about $150) and deal with repairs later as they come. And if you hate the colour of the car, you can get it repainted. After all, the ideal luxury car should both drive like a dream and look the part too.

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