Discounts grow as sedan demand slows
DETROIT - If you do your homework, now is the time to practically steal a new sedan from your car dealer.
For more than a year, sales of cars have been tanking because Americans have gone nuts over SUVs and trucks. As stockpiles of sedans such as the Chevrolet Malibu and Chrysler 200 stretch across car lots, automakers are forced to offer big discounts to move them.
There are a few steps to finding the best bargain, but it boils down to this: Figure out which cars aren’t selling, research discounts and don’t buy until the end of the month when dealers are more desperate to sell.
Brad Korner, general manager of AIS Rebate, an Ann Arbor, Michigan, firm that follows the labyrinth of automaker discounts, equates buying a car cheap with purchasing discounted baked goods. To get the good deal, you have to really look. “You go into the store and the day-old bakery stuff is on a different shelf,” he says.
Be wary of offers that seem too good to be true, like $69 per month payments. Earl Stewart, a North Palm Beach, Florida, Toyota dealer who is critical of other dealers’ sales tactics, advises people to ignore dealer advertising.
“Probably 99 percent of it is misleading,” he says. The low-price deals often are on stripped-down models that the dealer may not even have. They can also include hefty down payments.
But armed with the right information, you can navigate the new car sales maze and get 20 percent or more off a car’s sticker price:
Pick a target: For more than a year, many compact, midsize and large cars, gas-electric hybrids, and many lower-level luxury cars haven’t sold well. So dealers have big supplies. Because they’re paying interest on the cars, they’re eager to sell. So figure out the size of car you want. Then look for automaker monthly sales press releases on the internet and find models with big year-over-year declines. The sales figures are released early in the month.
Look for discounts: Many websites, including the auto companies as well as kbb.com, truecar.com and Edmunds.com, list publicly available discounts called incentives. Say you decide on a midsize car. Sales of the Nissan Altima were off nearly 15 percent in January, so incentives are likely. On its website, Nissan was offering $4,550 off a nicely equipped $25,460 Altima Midnight edition. That’s nearly 18 percent off the sticker without haggling!
Visit dealers: During the first two weeks of the month, go to a few dealers. Confirm the incentives you found online — then ask for more. Often automakers add deals by region. There also are other discounts for being an AAA member, serving in the military or being a recent college graduate. Michelle Krebs, an analyst for Autotrader.com, says at this point, don’t mention a trade-in. Work that into the deal later.
Make a deal: You’ll get an even better price by waiting until the last few days of a month or quarter. First, dealers offer sales people bonuses to meet monthly sales goals. If they are close to the bonus, they’ll be more willing to deal. Also, dealers get what are called “stair step” incentives from automakers for hitting sales goals. It’s big money, so dealers close to their targets are more willing to bargain.
For a larger dealer, Stewart says hitting stair step goals can mean $250,000 or more, the difference between a monthly profit and loss. General Motors is helping some dealers get rid of 2016 cars by giving up to 20 percent off the sticker.