Buying a New Car in Current Market Conditions

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dhuser
Posts: 35
Joined: Tue Feb 26, 2019 9:59 am

Buying a New Car in Current Market Conditions

Post by dhuser » Thu Apr 02, 2020 12:46 pm

Hi all,

I've been looking at buying a new car for a few months, and given the current market conditions (car sales plummeting, dealer inventory rising, coronavirus uncertainty, etc...), what kind of deal do you think one would be able to get? Obviously, it will very by make, model, dealer and by location, but I'm sure there are plenty of dealers out there just looking to get any sales they can. And yes, I've decided on a new car over a used car, but I don't think that debate needs to be brought into it as there are plenty of other threads debating the merits of each.

Any advice/insight to share on car buying right now?

novemberrain
Posts: 300
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Re: Buying a New Car in Current Market Conditions

Post by novemberrain » Thu Apr 02, 2020 12:54 pm

This is absolutely one of the best time in our lifetimes to buy a new car I believe. Pretty much no dealer in Jan/Feb anticipated the steep sales drop off. So they have plenty of car inventory stocked up. And they have bills to pay.

However. Couple of points to keep in mind.

1. A lot of states have shelter in place. So you would find it hard to find a dealer that is actually open right now.

2. As you said, the discounts will vary by model. So brand new models may not be discounted that much. But late cycle models will see steep discounts (I wouldn't be surprised by 30+% discounts). Also older model year (like say 2018) but still brand new vehicles will have steep discounts.

3. The risk of yourself getting coronavirus goes up if you go around visiting multiple dealerships. And that will negate pretty much any potential discount you can get. I have observed that dealers don't play ball unless you have visited them in person and they know you are a real buyer. ( I have tried email enquiries in the last week)

4. The buyer's own financial situation needs to be good.
Last edited by novemberrain on Thu Apr 02, 2020 12:57 pm, edited 2 times in total.

bloom2708
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Location: Fargo, ND

Re: Buying a New Car in Current Market Conditions

Post by bloom2708 » Thu Apr 02, 2020 12:55 pm

Have you narrowed your scope down at all? Any new car/pickup/SUV is in scope right now? Any brand? Any price range?

I know you can get 84 months, 0% financing if you have top credit with GM.

Ford will make 3 of your payments and defer 3 of your payments. There are some nice discounts on Ford vehicles at our local dealer.

You will likely have to shop online via chat. I'm sure a dealer close enough would bring you are car to test drive.

Lower supply of new cars will likely keep prices relatively stable. At least for a while.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead

The Broz
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Re: Buying a New Car in Current Market Conditions

Post by The Broz » Thu Apr 02, 2020 12:56 pm

If you are a Costco member, I highly suggest looking into their new car purchase program. It makes the whole process very simple. The prices are non-negotiable and the discounts they offer are clearly spelled out.

Separately, I don't see anything wrong with identifying the car you want, going to a dealer and throwing them a low ball offer. Do your homework though. Know what you want, know the prices, etc. If you are willing to be flexible on silly things like the color of the car, they might have something that they really want to get rid of. Good luck!

gr7070
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Re: Buying a New Car in Current Market Conditions

Post by gr7070 » Thu Apr 02, 2020 12:58 pm

What's your C-19 risk group? That would affect my buying decision first and foremost.

If you know what make/model you want most of the purchase can be done online and over the phone. If you need to test drive a bunch of different cars, etc. I'd consider my health and those around me over a good deal.

Beyond that I would think deals can be reasonably had for the next month(s?). At the same time I don't think you're going to walk away with anything historic - I suspect the bottom line decision won't change much, they still need to sell at a profit??? Though it might be easier and quicker to get them to that rock bottom price.

Who knows, maybe there'll be a baby boomer like spending-spree a month or two from now and good deals will be hard to find soon.

All this is speculation and only time will tell what unfolds and what kind of deal you'll find.

novemberrain
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Re: Buying a New Car in Current Market Conditions

Post by novemberrain » Thu Apr 02, 2020 1:04 pm

gr7070 wrote:
Thu Apr 02, 2020 12:58 pm
they still need to sell at a profit???
Is that really true ? Here is my take on it.

Say a dealer has $10 Million inventory which they are financing at 3%. So every year they need to pay their banks $300k. Or around $25k per month. Now if nobody is buying anything, would they rather sell a couple of vehicles at a loss (and make their bank interest payment); or would they go into default on their own loans ?

gr7070
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Re: Buying a New Car in Current Market Conditions

Post by gr7070 » Thu Apr 02, 2020 1:19 pm

novemberrain wrote:
Thu Apr 02, 2020 1:04 pm
gr7070 wrote:
Thu Apr 02, 2020 12:58 pm
they still need to sell at a profit???
Is that really true ? Here is my take on it.

Say a dealer has $10 Million inventory which they are financing at 3%. So every year they need to pay their banks $300k. Or around $25k per month. Now if nobody is buying anything, would they rather sell a couple of vehicles at a loss (and make their bank interest payment); or would they go into default on their own loans ?
There are certainly many other business aspects involved, e.g. cost to maintain a lot and overflow lots, etc. That factor into ones profit. It's why I included the ???

Ultimately I don't see them giving cars away at historic prices. Even the legitimate going out of business sales aren't anything historic. Only one way to find, of course, and shopping (ignoring the health risks) won't hurt.

And who knows, maybe one would regret buying in April and waiting a month or two would have been far better. Or maybe far worse.

jpohio
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Re: Buying a New Car in Current Market Conditions

Post by jpohio » Thu Apr 02, 2020 1:28 pm

Most car dealers in our area are advertising that the entire process can be done without going to dealership. They will email the paperwork, deliver the car. I imagine if you know about what you want, and researched pricing, all negotiations could be done by phone or email.

wolf359
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Re: Buying a New Car in Current Market Conditions

Post by wolf359 » Thu Apr 02, 2020 1:42 pm

novemberrain wrote:
Thu Apr 02, 2020 12:54 pm
This is absolutely one of the best time in our lifetimes to buy a new car I believe. Pretty much no dealer in Jan/Feb anticipated the steep sales drop off. So they have plenty of car inventory stocked up. And they have bills to pay.

However. Couple of points to keep in mind.

1. A lot of states have shelter in place. So you would find it hard to find a dealer that is actually open right now.

2. As you said, the discounts will vary by model. So brand new models may not be discounted that much. But late cycle models will see steep discounts (I wouldn't be surprised by 30+% discounts). Also older model year (like say 2018) but still brand new vehicles will have steep discounts.

3. The risk of yourself getting coronavirus goes up if you go around visiting multiple dealerships. And that will negate pretty much any potential discount you can get. I have observed that dealers don't play ball unless you have visited them in person and they know you are a real buyer. ( I have tried email enquiries in the last week)

4. The buyer's own financial situation needs to be good.
If you're state is under shelter-in-place orders, it still may be possible to buy a car.

Here's a cars.com article on the situation (state dependent) https://www.cars.com/articles/can-i-buy ... es-419583/

Some car companies will do deliveries: https://www.cars.com/articles/coronavir ... ry-419477/

I'd say that you have nothing to lose by checking your dealers' websites and seeing if their internet sales force is still active. If they are, and they have a way to close the deal, then get quotes and shop around. This works best if you already know what car and features you want, and are simply shopping for the best price.

meebers
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Location: Florida

Re: Buying a New Car in Current Market Conditions

Post by meebers » Thu Apr 02, 2020 8:15 pm

I need to go thru the trade in process at least for a couple of hours. Selling it myself is out of the question now that we are "locked" down. They need to look at and "test "my car. I absolutely expect them to low ball more so without it being there. ?? :mrgreen:

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Watty
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Re: Buying a New Car in Current Market Conditions

Post by Watty » Thu Apr 02, 2020 8:38 pm

Here is a post that I did about two years about about how I bought a car by getting bids on the internet.

viewtopic.php?f=11&t=239526&p=3746230

Many of the steps would be the same now.

You could try something like that to see what sort of deal that you could get then decide if you want to buy right now.

I don't know if you will be getting great deals or not since, as I understand it, no cars are being manufactured now so a dealership will not be able to get replacement inventory if they sell most of the cars they have on their lot. Cars may also need final preparation and inspections when they are sold and they may not have staff that can do that if your area is shut down.

logical synapse
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Re: Buying a New Car in Current Market Conditions

Post by logical synapse » Thu Apr 02, 2020 8:49 pm

The Broz wrote:
Thu Apr 02, 2020 12:56 pm
If you are a Costco member, I highly suggest looking into their new car purchase program. It makes the whole process very simple. The prices are non-negotiable and the discounts they offer are clearly spelled out.

Separately, I don't see anything wrong with identifying the car you want, going to a dealer and throwing them a low ball offer. Do your homework though. Know what you want, know the prices, etc. If you are willing to be flexible on silly things like the color of the car, they might have something that they really want to get rid of. Good luck!
FYI the Costco price is absolutely negotiable. We priced a new car with Costco in February and used that amount as a starting point for negotiations. The final price agreed upon was significantly lower than the Costco price.

Johnny Thinwallet
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Re: Buying a New Car in Current Market Conditions

Post by Johnny Thinwallet » Thu Apr 02, 2020 8:50 pm

Before any of this happened, I was considering replacing my car toward the end of the year this year. I have a 2007 Accord, and I would just be replacing it with another Accord, either a new 2020 or a new 2021 (depending on any changes).

I briefly gave it a thought on looking to replace my car now, but even if I got a terrific deal I still have some headwinds on what to do with my old car. During normal circumstances, I could sell it private party for a fairly decent price, certainly higher than a dealer would offer in a trade. But I simply couldn't (or wouldn't want to) try to sell a car private party right now. So my options would be trade in my old car and get less value or wait for the pandemic to be over to sell it private party. Problem is then I have to pay to insure an extra car for an unknown amount of time, and that adds a cost too.

Then I thought about the fact that there's nothing wrong with my old Accord and right now I'm driving less than at any point in the last 20+ years since high school. My wife and I both working remotely during the pandemic rather than driving to work. We're in a "stay-at-home" state, and both our cars are basically sitting in the garage. I'll probably just sit tight for now.

helloeveryone
Posts: 517
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Re: Buying a New Car in Current Market Conditions

Post by helloeveryone » Thu Apr 02, 2020 11:06 pm

dhuser wrote:
Thu Apr 02, 2020 12:46 pm
Hi all,

I've been looking at buying a new car for a few months, and given the current market conditions (car sales plummeting, dealer inventory rising, coronavirus uncertainty, etc...), what kind of deal do you think one would be able to get? Obviously, it will very by make, model, dealer and by location, but I'm sure there are plenty of dealers out there just looking to get any sales they can. And yes, I've decided on a new car over a used car, but I don't think that debate needs to be brought into it as there are plenty of other threads debating the merits of each.

Any advice/insight to share on car buying right now?
Trucks right now seem to be incredibly priced. Although not in the market I love perusing cars.com. Chevy Silverado, GMC sierra are the ones that I saw were had the greatest % discount off MSRP (by a LOT), ford less so. Toyota's barely.

As others note - now seems like a great time. If you've been doing research - look now and see how prices compared to when you started your search.

Topic Author
dhuser
Posts: 35
Joined: Tue Feb 26, 2019 9:59 am

Re: Buying a New Car in Current Market Conditions

Post by dhuser » Fri Apr 03, 2020 7:16 am

Thanks for all the replies. I have settled on make and model (VW Atlas) so I’ve been reaching out to dealers within about 200 miles. My state and neighboring states do have similar shelter-in place orders, but all the dealers have been responsive thus far. Most are starting some of their 2019s around 20% off MSRP on their website so I’ve going to try to negotiate down with them from there.

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Go Blue 99
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Re: Buying a New Car in Current Market Conditions

Post by Go Blue 99 » Fri Apr 03, 2020 7:25 am

My cousin is a finance manager at our local Honda dealership. He said they aren't offering any discounts beyond what they would normally give. Sales are of course down. On a normal busy Saturday he would sell 30 cars, but last Sat he only sold 9.

Jack FFR1846
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Re: Buying a New Car in Current Market Conditions

Post by Jack FFR1846 » Fri Apr 03, 2020 7:26 am

Has your state designated car dealers "essential businesses"? I know Massachusetts has. Along with other essential businesses like Dunkin Donuts, all liquor stores and the local Harley Davidson dealer remain open as essential. I mean.....getting more chrome on that Wide Glide is worth catching a deadly disease, right?

Now that my snark is done....every dealer I've looked at online has the option where they will bring you the car, give you a quote on your trade and complete the transaction at your home. Have you watched TV? I remember the Ford commercials saying you can do that from any Ford dealer.
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The Broz
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Re: Buying a New Car in Current Market Conditions

Post by The Broz » Fri Apr 03, 2020 11:48 am

logical synapse wrote:
Thu Apr 02, 2020 8:49 pm
The Broz wrote:
Thu Apr 02, 2020 12:56 pm
If you are a Costco member, I highly suggest looking into their new car purchase program. It makes the whole process very simple. The prices are non-negotiable and the discounts they offer are clearly spelled out.

Separately, I don't see anything wrong with identifying the car you want, going to a dealer and throwing them a low ball offer. Do your homework though. Know what you want, know the prices, etc. If you are willing to be flexible on silly things like the color of the car, they might have something that they really want to get rid of. Good luck!
FYI the Costco price is absolutely negotiable. We priced a new car with Costco in February and used that amount as a starting point for negotiations. The final price agreed upon was significantly lower than the Costco price.
Consider my mind blown. Either something changed since I bought my car 7 years ago to allow that, or I really missed out. Thanks for mentioning it! I am not sure that I will ever get a new car again, but it is good to know if I decide to go down that path.

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