They say the best time to buy a car is during the fall when the new models come out or at the end of the month when sales associates and dealerships are looking to hit their targets. I say the best time to buy a car is after you’ve done all your research.

In today’s “Do It Together” segment: I’ll go through the key elements you need to know when buying a car.

For most of us, buying a car means financing the majority of the purchase after you put down the down payment, which I’ll talk about that later. Buying is cheaper if you plan on owning the car for more than 5 years. If you’re like most Canadians and keep your car for an average of 11 years, then you’ll be driving debt-free for a few years before you need a new car.

Now, we all get carried away when we sit in a new car but I want you to keep something in mind. There is no such thing as 0% financing! Unless it’s from family, no one is lending you money for free… If the government of Canada has to pay 1.5% to borrow money for 5 years, you are going to have to pay more than that! All those ads on TV offering 0% financing are really appealing and do draw customers into the showroom but they are basically false advertising. So how can they offer 0%? It’s simple, they inflate the price of the car to offset the lower cost of financing, which, when you think about it, might explain why the car depreciates so fast when you drive it off the lot.

Knowing all that, there are only two primary factors to negotiate: the price of the car and the financing rate.

Now the price of the car means the sticker price, the monthly payments. You don’t want to spread out the loan over a lengthy period such that you end up paying way more than the car’s worth because of interest.

Of course, you could buy the car outright with cash and drive off the lot with a discount. Here’s how: because the dealers and manufacturers inflate the price to offset lower financing rates, you should get a substantial cash discount if you buy the car outright. To figure out how much, you’ll have to know how to discount the proposed car payments over the term of the loan at a reasonable discount rate, say 5%. In other words, 5% is your opportunity cost on the money you could have invested if you financed the car instead of buying it outright.

And before I wrap up, here are some other considerations that apply to both leasing and buying a car.

Don’t buy at the first dealership you find. Comparison shopping is key when getting a new car. There are always several dealers in every region for each car brand. They are supposed to be competing against each other for your business, so make them! Dealerships work on volume, so if they’re getting close to the end of the month and haven’t met their targets, they will be highly incentivized to move the cars off the lot to meet their manufacturer’s volume target. Use that to your advantage!

The trade in value: Always, always shop your trade in around too! See who will give you the best price, then leverage that with the dealer you finally choose to work with. Don’t keep the numbers in your head, write everything down and take your notes with you. That will give you extra negotiating power.

Try not to get tempted by all the extras because like the name says, those extras will cost you a lot. They’re cool to have but they’re also money out of your pocket and you won’t use them as much as you think. Is that sunroof really worth it? Probably not.

And one final thing: car dealers expect negotiation, so take notes, prepare, go in there and get a new car at a great price whether you buy or lease.