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Should I stick with the MSRP when I'm shopping for a new car?

J.P. MOCZULSKI/The Globe and Mail

I'm about to start looking for a new car. I'm not comfortable haggling, so I feel like I'm wearing a bull's eye when I walk into a dealership. Should I just stick with the MSRP on the car company's website? Or is there some specific way to go about the process that will save me money? What mistakes do people make when they're looking for cars? – Dave, Montreal

If you're looking for a motto to help you find the right car at a fair price, the Boy Scouts have a good one. Be prepared.

"One of the biggest mistakes people make is probably not researching enough cars," says Ron Montoya, Consumer Advice Editor with edmunds.com, a U.S. car-review site. "A lot of people get locked into cars – they've always driven a Toyota so they just go get a new Toyota but don't look at the competition."

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Before you walk into a dealership, it's a good idea to research the car you want, and the competition, Montoya says. It's simple advice.

"The best defence is research. You don't want this to be an impulse purchase," Montoya says. "I got a phone call from a friend who wanted to do everything in one day."

"He said, 'Hi, I'm setting in front of the salesperson. Is this a good price?"

Consumer Reports suggests starting with the manufacturer's website to get basic information about trim and options.

"The vehicle descriptions are the same as advertising, so don't expect to find unbiased critiques," it says.

Next, look at ratings, reviews and comments from owners. Some of that information may be free online. Some, especially details on reliability, might require a purchase of a guide or a subscription (like Consumer Reports) — or a trip to the library.

It's still not time to head to the dealer. First, go to the bank and get pre-approved for a loan, Montoya says.

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"That way you know what your real budget is — if you know your interest rate and monthly payment, than you can shop as if you have cash," he says. "If you have good credit, you might be able to get a better deal on manufacturer financing and decide to do that instead — but at least you can make an educated decision."

Test drive now, buy later

Once you've done your homework and narrowed down the options, it's time to go to dealerships — but not to buy.

"Test drive a car but don't feel obliged to buy that day," Montoya says."Don't be afraid to test drive as many different cars as you need to. You're there to find a car that meets your needs."

That includes seeing whether or not your golf clubs will fit. Or if the back seat is comfortable for your passengers. Feel like you're wasting the salesperson's time? Don't.

"You can't worry about whether or not you're giving them a sale," Montoya says. "It amazes me that some people don't test drive. I'd spoken to a really tall guy who was complaining that his Honda Civic is too small for him and I thought, 'Why wouldn't you test drive?'"

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After the test drive, you don't have to go back into the dealership again, Montoya says.

Call dealerships

Instead, you should call at least three dealerships — or contact their online sales departments — and get quotes, Montoya says.

"When we've compared, you get a better price by calling them than just walking in an negotiating," Montoya says.

Montoya says it helps if you have an idea of what the dealer paid for the vehicle and what the same make and model costs in your area.

There are various sites that do this for a price in Canada, including unhaggle.com and carcostcanada.com.

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Ask the dealer to quote you an actual price — with all the costs and charges — and not an estimated monthly payment.

"If you tell them 'I can afford $400 a month,' the salesperson will lock in on that," he says. "You might end up paying more for the car than if they'd just given you a quote for the total price."

Once they quote you a price, then you can make a counter-offer.

"'I'll say, 'Do you have the blue Chevy Malibu and what's your asking price?'" Montoya says. "'Once you get the offer, you can say, 'I've had chance to do research on this car, this is what people are paying in the area and can you beat this price?'"

It ain't over yet

Once you and the salesperson agree on a price, they'll try to sell you extras, like VIN etching, undercoats and extended warranties. If the car wasn't an impulse buy, the extras shouldn't be either.

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"It's the opportunity for them to make a little extra profit," Montoya says. "You're under no obligation to buy that day or to decide on the spot whether those things are important."

Instead, research to figure out whether you need the extras — including the extended warranty. Then, figure out whether you can get them cheaper somewhere else.

"Some vehicles are really reliable and might not need an extended warranty," he says, "And, you can buy an extended warranty any time between now and when the car's warranty expires — that's a lot of time to shop around."

If you have questions about driving or car maintenance, please contact our experts at globedrive@globeandmail.com.

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