Some sales predictions you may not want to hear: Lower inventory levels mean higher car prices, according to Edmunds.
Although some dealers typically slash prices in order to increase sales this time of year, as the U.S. auto industry continues to grapple with a shortage of cars from last year, it seems consumer demand is just as strong. As a result, we are in for more of the same, Edmunds CEO Jeremy Anwyl said at the Dealers Association of America’s Fall Dealer Conference last week.
Some dealers continue to lock up parts that are in relatively short supply, including key components like spoilers, keyless entry systems and body panels — all of which can add significant money to the price of your car. Also, unscrupulous dealers can both spike prices by throwing in additional fees, and skip any discounts for customers who don’t act fast enough to place an order on Black Friday.
“A car that was originally $25,000 is now as much as $30,000,” Anwyl said. “That’s a big difference.”
Meanwhile, older models — those typically made by GM, Ford and Chrysler — continue to provide the cheapest cars for consumers, and will typically get upgrades, Anwyl said. He noted that even though Americans no longer need a V8 to go on a trip with their families, GMC Yukon customers can get the V8-powered XLT if they like the 8-speed automatic transmission.
Here are five tips to make sure you get the best deal possible this holiday season, Edmunds said:
Know what kind of car you want.
Look at residual values, or the expected resale value of your car. If you’re looking for a car, how much will it cost you to get on a good month to your trade in? Are you buying a new or used car? If it’s a used car, do the vehicle’s mileage come out to a full tank or only a quarter tank? Do you get enough miles? In cases of new cars, you may want to evaluate what the average trade-in value for the model you’re considering is, Edmunds said. Once you figure out how much you want to spend on a car, reach out to dealers with more information.
Check out other outlets.
Like Car and Driver, Edmunds offers original pricing with a comparison map. Try Edmunds.com and the cars by manufacturer tab. In addition, Edmunds has Black Friday ads that you can view right now on its mobile app. Similar to a catalog, the apps show unique examples that also include prices and different features. What’s more, it’s important to keep in mind that the average car that is sold during the Christmas season last year had 70,000 miles on it, Anwyl said.
Negotiate from the top.
When negotiating on a car or SUV, always start from the very top of the price list. Higher numbers always go up faster and lower numbers go down slower, Anwyl said.
Get the extras.
Most dealers will start giving discounts on popular models immediately after a round of public announcements, with additional offers a few days later. Don’t hesitate to ask for “economy”, “luxury” or even “low-end” versions, Anwyl said. Depending on your specific needs, you might save some money with incentives like incentives or cash rebates.
Don’t overlook options.
Edmunds offers a number of different choices, such as a credit upgrade plan or an extended warranty for which dealers are offering their best deals during the holidays. As vehicles continue to get more and more sophisticated, options are a lucrative way to bring more cash into dealerships.
And remember that warranties last for three years or 36,000 miles, whichever comes first.