Say "No" to Dealer Markup: Some Tips for Scoring a New Vehicle in Today's Low-Supply Market
Buying a new or lightly used car is tough these days. In our last story we outlined some of the issues impacting the new car market today and how the situation has lead to unbelievable high prices for new vehicles, with both limited production enthusiast models and mainstream vehicles being hard to come by.
Needless to say, there’s a strong argument to be made for waiting out the market completely, and to put off getting a new car until (hopefully) production ramps up and prices drop.
But if you don’t have the ability to hold off, are convinced the current market is gonna be the new normal, or simply want a new vehicle sooner than later? Well, we have some tips to help you navigate the market—and depending on your situation you might actually be able to benefit from upgrading your car in this inflated situation.
Buy High, But Sell Higher?
And the way you can benefit in today’s market is by maximizing the value of trading in or selling your current vehicle. Yes, both new and near-new cars and trucks are harder to find and more expensive than ever, but that also means your current vehicle may also be worth more than ever.
In theory, this might be seen as a wash. After all, what’s the point of selling/trading your current vehicle for a premium only to overpay for its replacement? But if you maneuver right and have a little patience you can come out ahead.
And of course, if you are selling or trading your late model vehicle, do yourself a favor and get quotes from any of the large online used car companies before you trade it into a dealer.
You might just be blown away by how much some of these places will pay for your car. And if you put in the time and research to source a new car reasonably, you can actually come out ahead.
Cast a Wide Net
Whether or not you are selling/trading one vehicle for a new one, one of the most beneficial things is to look into many places in your new vehicle search. Even in normal times, only sticking with your local dealership(s) would limit your chances of getting the best deal, and that’s even more true right now.
Unless you live in a very isolated area, chances are there are multiple dealerships for the same brand within a few hours drive, and with on-hand inventory lower than ever, the more dealers you reach out to the more chance there is to find what you are looking for.
While you probably won’t be able to get dealers bidding against each with aggressive discounts, you will open up your options and be lot more likely to find a car at MSRP or even a little less. And most people would gladly travel a few hours to save thousands of dollars.
Look Into Shipping a New Vehicle
In some instances there have even been people paying to have new cars shipped all the way across the country, because different regions will have differing levels of inventory and demand.
It may seem crazy having a mass-produced car shipped across country, but on popular vehicles it can be better to spend $1,500 for transport than paying $5,000 in added mark up at a dealer in your region.
On some popular enthusiast cars like the Honda Civic Type R, cross-country shipping was a common practice even before the current shortages as buyers looked to avoid high markup in their home areas.
Order or Reserve A Car Before It Arrives
Unless you are looking to buy a Tesla, you’ll still have go through a dealership if you want to buy a new car, but rather than looking through the slim pickings on lots these days, it's proven to be easier and cheaper to order or a reserve a new vehicle through a dealership before it arrives.
This doesn’t necessarily mean ordering a custom build from scratch with all of your preferred options (though many people are doing that), it often means just checking with a dealership to see exactly what they have coming in, putting your name on it and likely putting a refundable deposit down to secure it.
Every dealer does things differently, with some wanting to milk everything they can from the few cars they are getting. But many larger dealers are pre-selling their vehicles as they are allocated for prices at or near MSRP.
You might end up waiting anywhere from a couple weeks to a few months to get your vehicle in this case, but it’s one of the proven ways to get a car at a reasonable price, and to avoid the frenzy of buyers looking to buy vehicles already on the lot.
If you do go the route of ordering or reserving a car that’s inbound, make sure you have a price in writing beforehand. There have been a lot of horror stories of people ordering vehicles presumably at MSRP only to have them show up and the dealer add a “market condition” price raise, so make sure everything is transparent before you commit.
Research & Patience Pay Off
While it’s surely not an ideal time to be hunting for a new vehicle, putting in some extra research and legwork has always been the best way to buy a car, and in the current high demand, low supply market that’s the case more than ever.
Who knows if we will ever get back to the days of bargain-basement Scat Pack Dodges, but with a little work on the buyer’s end, the current market doesn’t have to be as brutal as it seems.
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- Or maybe you want to bypass of the price of a new vehicle altogether and score a hidden gem like a first gen Toyota Sequoia for cheap?