New Car Buying Hasn't Changed

[Midpack]

I guess you haven't been car shopping lately, have you? The consumer is NOT in a position to negotiate for most new cars.

A lot of that going on in this thread, but if you haven't bought a car or read closely lately you might not realize it's an extreme sellers market right now. I've gotten way under MSRP on every car I've bought, but that's not possible now unless you buy something really unpopular or odd.

 

[ExFlyBoy5]

A lot of that going on in this thread, but if you haven't bought a car or read closely lately you might not realize it's an extreme sellers market right now. I've gotten way under MSRP on every car I've bought, but that's not possible now unless you buy something really unpopular or odd.

Yes, and that was the point I was trying to make.

 

[braumeister]

A lot of that going on in this thread, but if you haven't bought a car or read closely lately you might not realize it's an extreme sellers market right now. I've gotten way under MSRP on every car I've bought, but that's not possible now unless you buy something really unpopular or odd.

That has apparently been going on for less than a year. When DW had no choice but to buy a new car last March, she was still able to get a very popular model for a couple thou less than MSRP thanks to manufacturer incentives.

 

[Midpack]

That has apparently been going on for less than a year. When DW had no choice but to buy a new car last March, she was still able to get a very popular model for a couple thou less than MSRP thanks to manufacturer incentives.

Definitely a recent phenomena. The examples in this article are more extreme cases, but $3000-$6000 isn't uncommon at the moment on any remotely popular make/model.

By John Goreham G+ May 19 2021 - 10:20am
$10k to $20K Dealer Markups Now Common Due To Vehicle Shortage - Your Options
Shopping for a new or used car? Be prepared to pay as much as $20,000 more than MSRP for a popular model. We break down the causes and make some suggestions for shoppers dismayed at dealer markups.

https://www.torquenews.com/1083/dealer-markups-10k-20k-now-common-due-car-shortage-here-s-why

If you do a search, you can find endless "market adjustment" horror stories...

 

[Midpack]

Yes, and that was the point I was trying to make.

Yep, just reinforcing your POV as examples of successfully negotiating (well below) MSRP keep popping up on this thread - they're simply not applicable for now.

 

[Romer]

Like many posts here I have bought my last 3 cars working deals on line, or over the phone/email and they have been pretty easy. I look the offer over before I come in and as others have said, pending trade value or car inspection test drive. The only exception was my wife's Lexus which was a pleasure to deal with

Cash always makes it easier

My last car I bought at the very beginning of the Pandemic when everyone hunkered down and no one was buying. I got my new Z4 at 10K off MSRP. Now they are going over MSRP and I could make money on it

 

[Music Lover]

Cash always makes it easier

Correct me if I'm wrong, but I can't think of any reason why a cash deal would be preferable to a certified cheque or financing to a dealer.

 

[foxfirev5]

Correct me if I'm wrong, but I can't think of any reason why a cash deal would be preferable to a certified cheque or financing to a dealer.

Cash is not king with car deals. It's simply a signal that they won't be able to make any additional funds with financing, add ons and subscriptions - A biggie going forward.

 

[FLJim]

Correct me if I'm wrong, but I can't think of any reason why a cash deal would be preferable to a certified cheque or financing to a dealer.

Dealers want you to finance, as they usually make some money on the financing packages that they promote. Cash (including personal check or cashiers check) is easier for the buyer who uses the "100% down" payment plan.

 

[Midpack]

Correct me if I'm wrong, but I can't think of any reason why a cash deal would be preferable to a certified cheque or financing to a dealer.

As an example, look at the profitability of GM Automotive (selling cars) and GM Financial (financing cars) - almost 40% of their EBIT comes from financing. Most of the major automakers have been in the financing business for a long time.

https://gmauthority.com/blog/2021/08/gm-q2-2021-earnings-revenue-income-profit/

 

[jollystomper]

As an example, look at the profitability of GM Automotive (selling cars) and GM Financial (financing cars) - almost 40% of their EBIT comes from financing. Most of the major automakers have been in the financing business for a long time.

https://gmauthority.com/blog/2021/08/gm-q2-2021-earnings-revenue-income-profit/

Reminds me of how someone once described CarMax: "A finance company that provides cars as an incentive to borrow money from them".

 

[EA-Sports]

Dealers want you to finance, as they usually make some money on the financing packages that they promote. Cash (including personal check or cashiers check) is easier for the buyer who uses the "100% down" payment plan.

The better route is to finance if doing so will get you a better deal. Just make sure there’s no prepayment penalty so that you can pay it off after 1 or 2 payments.

 

[Turbo29]

Reminds me of how someone once described CarMax: "A finance company that provides cars as an incentive to borrow money from them".

At one time Sears was the same way. They made more money from their credit card than from their merchandise sales.

Look what happened to them.

 

[Mr._Graybeard]

At one time Sears was the same way. They made more money from their credit card than from their merchandise sales.

Look what happened to them.

And GM itself. Remember General Motors Acceptance Corp.?

Acceptance Corp. Wouldn't it be nice to be accepted? What a great exercise in doublespeak. A little like "fulfillment center."

 

[brett]

The last time we shopped for a new vehicle we did not even bother with Ford, GM. It was Acura, Lexus, Toyota.

Mostly based on our warranty and service experiences from years of running Ford/GM company cars and running new and older Toyotas at the same time on our own account.

But...as I aged I have changed. Last time we went to a dealership it was to buy an Acura. Money in the jeans ready to buy. DW just said do it. Went into the dealership. Loved the cars.

But that new car smell was meaningless to me, along with the sales patter. I looked at DW and quietly said that I liked my current 14 year old Toyota just as much and it ran like a top. So we walked. DW was amazed. She compares the male auto purchase routine to the annual rut. Inbred. Except this time I passed...no exitement, no urge.

 

[brett]

The last time we shopped for a new vehicle we did not even bother with Ford, GM. Drove by their respective stores. It was Acura, Honda, Lexus, Toyota.

Mostly based on our warranty and service experiences from years of running Ford/GM company cars and running new and older Toyotas/Hondas at the same time on our own account.

But...as I aged I have changed. Last time we went to a dealership it was to buy an Acura. Money in the jeans ready to buy. DW just said do it. Went into the dealership. Loved the cars.

But that new car smell was meaningless to me, along with the sales patter. I looked at DW and quietly said that I liked my current 14 year old Toyota just as much and it ran like a top. So we walked. DW was amazed. She compares the male auto purchase routine to the annual rut. Inbred. Except this time I passed...no exitement, no urge.

 

[travelover]

........But that new car smell was meaningless to me, along with the sales patter. I looked at DW and quietly said that I liked my current 14 year old Toyota just as much and it ran like a top...........

Just having a car detailed inside and out can change one's whole perspective.

 

[Romer]

Correct me if I'm wrong, but I can't think of any reason why a cash deal would be preferable to a certified cheque or financing to a dealer.

My experience has always been cash/check is easier. Easier is what I said not better for the dealer

first it allows me to negotiate and get the offer before I step foot in the showroom without having to see if my Finance is qualified. Last two vehicles I went with their asking price as I thought it was fair and reasonable and much lower than any of the competitors

second it tells the dealer they are not going to make extra money on me so dont waste 4 hours going back and forth. I once spent 4 hours in a negotiation and then went home. They then called me to accept my final offer. It was another 2 hours at the dealer while we went back and forth on options they said were normal (window etching) and extended warranties, none of which I accepted

The BMW Z4 I was discussing was actually priced $10K below MSRP two months into the Pandemic as they were selling zero cars. The only reason I bought then as I saw it as an opportunity

The cash deal make the paperwork and experience with the dealer easier for me. I was at the dealer for 15 minutes signing paper work after my 10 minute test drive. My trade in was in the condition I discussed and they did the review while I was on my test drive and went with the phone agreed to price

The previous vehicle I bought on a non haggle price. Their trade in wasnt what I wanted so I sold my old car myself.

Now you might say I should have taken the dealers low financing and invested the money. Maybe true, but I learned after my first car loan its better to buy a car when you can pay cash for it and having doing that as a rule for 30 years. It works for me, where as others would do the math on low interest loan and go that route. All though finance requires a lower deductible on car insurance than I am carrying so I do save money there

 

[JoeWras]

But that new car smell was meaningless to me, along with the sales patter. I looked at DW and quietly said that I liked my current 14 year old Toyota just as much and it ran like a top. So we walked. DW was amazed. She compares the male auto purchase routine to the annual rut. Inbred. Except this time I passed...no exitement, no urge.

Next time, take a few pills of Cartelias 2 hours before negotiations for assured excitement and vigor.

 

[EastWest Gal]

Our 2009 Prius is starting to give us more and more trouble at 200K miles, so we decided to look at purchase/lease of a new car. I was intrigued by the Prius Prime, a plug-in hybrid Prius. However, they are few and far between, and searching online, they are being sold used at $4-5000 over the MSRP of new models! I also searched online for info about leasing and got an estimate of the cost of a lease.

We went to our local dealership, and sat down with one of the sales guys. He told us that Toyota has divided our country into 12 regions, and is only allowing one state in each region to sell the Prius Prime, since they are so few. It would be easier to buy a Prius Prime in So. California than in the mid-Atlantic, as it is the only region that has good deals. Also, all of California has Prius Primes. No fair! (just kidding)

Anyway, the salesperson described the leasing process, and approximate cost, and I went back home and researched everything he said, and it was entirely correct. No pressure, no hard sell.

We went home and discussed it and decided we need to do this. So we will go back and order a regular Prius to lease and decide on buying it later or getting a different car later.

 

[Mr._Graybeard]

The last time we shopped for a new vehicle we did not even bother with Ford, GM. Drove by their respective stores. It was Acura, Honda, Lexus, Toyota.

For 30 years I drove used BMWs and Mercedes. NEVER bought from a dealer, always private party. On those rare occasions when I needed service I couldn't do myself, the local clubs recommended some favored shops.

My most recent buy was a new Ford. The dealer is 5 miles away. The nearest Toyota store, 35 miles. I have more trust in my small-town Ford service department than the pirates at Toyota. The last time I was there, I had them flush the brake fluid and inverter coolant in our Prius. I had to laugh at all the upsell pressure I got.

 

[travelover]

........My most recent buy was a new Ford. The dealer is 5 miles away. The nearest Toyota store, 35 miles. I have more trust in my small-town Ford service department than the pirates at Toyota. The last time I was there, I had them flush the brake fluid and inverter coolant in our Prius. I had to laugh at all the upsell pressure I got.

Dealerships are independent businesses and determine their own business practices. One would think that they dance to the manufacturer's tune, but that its not the case. Local and state laws give them a lot of autonomy. One of the "good" things about the Great Recession was it was an excuse for manufacturers to get rid of a lot of the worst dealerships.

 

[FLJim]

Dealerships are independent businesses and determine their own business practices. One would think that they dance to the manufacturer's tune, but that its not the case. Local and state laws give them a lot of autonomy. One of the "good" things about the Great Recession was it was an excuse for manufacturers to get rid of a lot of the worst dealerships.

The trend for the last decade or more has been for the OEM's to help create multi-location "mega-dealers". Smaller, weaker, & 'worser' dealerships are "encouraged" to seek to be bought by a mega-dealer. OEM's greatly prefer to deal with fewer, larger, and better-capitalized dealers.

 

[travelover]

....... OEM's greatly prefer to deal with fewer, larger, and better-capitalized dealers.

The dealer is the face of the OEM to the consumer, so a bad dealer gives the whole OEM a bad name.

 

[FLJim]

The dealer is the face of the OEM to the consumer, so a bad dealer gives the whole OEM a bad name.

What makes a 'bad' dealer? I think there are fewer now that they have been acquired or merged.