EARL ON CARS
There is an old saying about the stock market: âYou can never buy from the bottom or sell from the top. This is because no one, not even the experts, can predict the absolute ups and downs of the markets. But, if you are careful, you can predict the best âroughâ time to buy or sell. This same truism holds true for buying a car in a seller’s market, where demand exceeds supply.
I’m a bit of an expert on the auto market because I’ve been a car dealer for over half a century, since 1968. I’ve seen a lot of ups and downs. This current and unprecedented rise in prices peaked about a month ago. Prices are still very high, although they are slowly falling and will continue to fall for up to six months. If you are planning to buy, be prepared to pay more than what you will pay next month or the next month, probably between $ 1,000 and $ 2,000 more. By June, you’ll save $ 3,000 to $ 4,000.
If you need to buy today, you will need to accept a target price close to the MSRP. I spoke to a woman last week whose current vehicle was destroyed in a car crash, but her insurance company paid her a very good price to replace it. She had to buy a car and I sold her one at my dealership for MSRP, outside plus sales tax and license plate. That’s about $ 2,000 to $ 3,000 more than I would have sold him the same car in two or three months. Most dealers still charge thousands of dollars off MSRP, using additional labels, hidden charges, and dealer installed accessories. You can read a mystery shopping report I conducted last week on a large South Florida Toyota dealership that refused to sell a new Toyota Corolla at MSRP, asking for $ 1,300 above, by clicking on this link www.MSRPTooLow.com.
Here are some tips to guide you through this high and stormy new car market:
?? If you need to buy a car soon, wait until Saturday, New Years Day, January 1, 2022, or Sunday and Monday immediately after. The first three or four days of January, in the new year, are when automakers and car dealers are pushing to “hit their numbers.” They close their books for sale after three to four days of the previous year. The motivation of manufacturers and dealers to sell cars peaks every year during these few days. Prices drop briefly from the prices of the previous year. Auto executives want 2021 to be as good as it can be for their boards, shareholders and Wall Street.
Car dealers feel the same, especially those that are publicly traded like Auto-Nation. You should have done your homework / due diligence in the previous weeks to pick the right car and the right dealership. The more flexible you are on color, model, trims and accessories, the lower the price you will get. Prepare for a very limited inventory of cars in stock or cars in transit to choose from.
?? Use www.CostcoAuto.com. After the first of 2022, the slow downward trend in prices will continue. Remember to order the exact car you want: color, options, make and model. If you are not already a Costco member, pay the annual membership fee of $ 65 and contract to purchase your car from a certified Costco dealer. Specify on the vehicle buyer’s official order that the price you pay the dealership will be the Costco Member price at the time your ordered car arrives at the dealership. Certified Costco dealers are contractually obligated to sell you the car at a lower price than they sold that model to any other customer.
?? Do not pay more than the MSRP if you need to purchase your car at a time other than the time suggested in points (1) and (2). It may take a bit of research and flexibility on model, color, and options, but there are a few dealers who will be reluctant to sell you a new car near the MSRP. The best way to encourage them to do this is to buy the best outside price you get from a dealer with their closest competitor for the same brand. It takes a lot less time if you do it online. In your communication with each dealership, be sure to set the outside price as the price for which you can write the check to purchase the car plus state sales tax and license plate. In other words, nothing was added to the price except government fees. The test of government fees is that there is no sales tax collected for real government fees. ??