If you’re in the market for a new vehicle, there’s bad news for car dealers that means good news for you.
Labor Day weekend was supposed to bring a flood of buyers into showrooms across the country. The experts predicted that a recession’s worth of pent-up demand would be unleashed over the holiday. Instead, “It was the worst August for U.S. auto sales since 1983,” according to one this Associated Press News report.
Granted, the cash for clunkers program was fueling sales last August, making this August a tough month for comparison purposes.
Not all the news was bad for automakers. Chrysler reported sales rose 7 percent in August. But GM sales fell 11 percent. So if you don’t have a fierce brand loyalty, seek out the models that are selling slowly but are still highly rated.
For instance, while GM sales dropped 11 percent, its Chevrolet division dove 22 percent. Yet the Chevy Malibu has earned good reviews and is currently offering deep discounts. Ditto with many Toyota models – sales are down a whopping 34 percent from last August. Obviously, that’s due to the numerous recalls as well as the economy – but even well-reviewed Toyota models that haven’t faced recalls have been tainted by recent headlines.
In short, dealers aren’t doing well, so deals abound.
Where the deals are
Here’s the Consumer Reports list of the best deals on 2010 models. To get complete information, however – like the bottom line price – you’ll have to sign up with Consumer Reports.
Here are some of the promotions currently being offered, according to this article in US News and World Report:
- Buick, GMC, Cadillac, Chevrolet: 0% financing available on many models, rebates of up to $3,000 on some – expires 11/1/10
- Ford, Lincoln, Mercury: 0% financing on most models, rebates of up to $2,500 on some – expires 10/4/10
- Honda: 0.9% to 2.9% financing on some models – expires 11/1/10
- Nissan, Infiniti: 0% financing on many models – expires 9/30/10
- Toyota: deals vary in different areas, but 0% financing is common on some models – expires 10/4/10
Here are some quick tips to get you started driving that hard bargain…
1. Financing first
Whether you’re shopping for houses, cars or anything that’s going to require borrowing money, always get approved for financing before you start. That way you’ll know in advance what you qualify for and be “fully funded” when you start your search: that enables you to pounce on a great deal if you see one. We have a car-loan search tool that will help you find the best rates where you live. Also check with local banks and credit unions to see what they’re offering. And watch this news story that explains exactly how to find the best car loan.
2. Join the club
Membership has its privileges. If you signed up for AAA because you wanted roadside protection, you also get access to vehicle research and member pricing. Same thing if you have an American Express card or belong to certain unions and trade organizations. Many community banks and credit unions can also hook you up with new and used-car buying services, research and special pricing.
Edmunds, Kelly Blue Book, MSN Autos, Yahoo Finance, Consumer Reports: all great sites to get information, reviews, financing tips and pricing on new cars. But you can use the web for more than just finding a car: you can use it to buy one as well by pitting local dealers against one another.
Once you decide exactly what car and options you want, here’s what you do: go to a site called Zag.com and pick one of the sites affiliated with this buying service, such as Consumer Reports, Overstock, USAA , American Express or others.
After joining one of the above sites to gain access to their buying service, you’ll be able to see real prices on real cars from real dealers in your area – before you provide your contact info. That means you’ll be able to pick which dealers you’d like to work with before the bidding process begins.
Once you’ve decided which dealers you’d like to compete for your business, you simply tell them what you’re looking for, then see who comes back with the best price – no salesmen, no high-pressure tactics, no worries. Once you’ve gotten the best possible price, go to the dealership and pick up your new car.
4. Beware the hidden fee
Like many businesses these days (think airlines), car dealers will often try to pad their profits with all manner of fees: destination fees, documentation fees, title fees, licensing fees, registration fees – the list is long. Demand a written list of every fee and tax before you buy and attempt to eliminate as many as possible. Here’s an Edmunds list of the most common fees and what they mean.
5. Investigate incentives
In the good old days (for dealers, that is), incentives were rare and modest. Not anymore. The big one this month is the end-of-the-model-year incentives to clear the lots for new inventory – see the list above. But some dealers might also offer discounts to new college grads, military members, and repeat buyers. So be sure to ask.
6. Consider the costs once you drive off the lot
So you want a small car because it’s more fuel efficient? That’s great. But realize you might pay more for insurance. And high-tech cars sound more reliable, but they actually lead to more costly repairs. Before you buy, check not only the price of the vehicle, but also the cost to insure it and repair it, as well as its reliability.
7. Consider “Pre-Owned”
Finally, if you’re still not sure about a new car, consider used. Money Talks News founder Stacy Johnson has never owned a new car – he drives an $80,000 Mercedes he bought for $20,000. He explains why he always buys used here. And if you’re looking for a bargain-priced used car, he tells you how to find one in the this story: 8 Tips for Buying a $5,000 Car.