questions on end-of-year car buying

December 30, 2008 7:50 AM

A handful of year-end / bad-economy new-car-buying questions: 1. How much actual pressure do car dealers feel to sell 2008s by end of day 12/31? 2. How incented is a car salesperson to make a sale on a car on a different dealer's lot 15 miles away? 200 miles away in a different state? 3. Within a model line, how much does dealer flexibility on price vary with trim and feature levels? 4. How likely is a dealer to go for a price under invoice or dealer cost?

For 1, I ask because there's this "Toyotathon" that expires 1/7/2009. If there was indeed pressure to sell by not just the end of the month, but the end of the year, why would it expire after the new year? Seems to be counter-productive if there actually is year-end pressure to clear inventories.

For 2, We're looking at 2 2008s, one 15 miles away from our local dealer, and another 200. One is the color she wants, the other is what I prefer. The one 200 miles away, obviously, comprises a fairly rare feature set (exterior/interior color combination, lack of navigation).

For 3, for this model there's three trim levels and all sorts of configurations of options. Should I make an offer based on the overall local availability of the model line, or adjust based on the trim and even major features availability?

For 4, at this stage, do you think they will be willing to go below invoice (digging into the holdback and wholesale financial reserve) or even dealer cost just to move the damn car off the lot?

I've read a few good posts here on Ask Metafilter, and taken the core advice to heart: do not negotiate on their terms. For the most part I have stayed behind the phone and several email accounts to probe pricing and availability...

Thanks!

posted by schmoppa to Travel & Transportation (7 answers total)

For 1, most companies (not just automotive) do their utmost to ship product before the end of the month, quarter, and especially year because that is what their financial reports are based on. You could make less per unit profit but make the books look better. After the fiscal period is over, you have no motivation to make less profit until the end of the next period. For example, the dealer could sell you a car on, say, Jan 8th at his cost, or he could hope that someone walks in the following week and pays full price for it. The second situation is better for him.

As for the rest of your questions, "it depends". Dealers have a lot of flexibility and are run independently of the manufacturer. They can bargain, or not bargain as they like.
posted by txvtchick at 8:24 AM on December 30, 2008

With the current economy, there is pressure to many ANY sales, I think. I can't speak to all of your specific questions, but I can tell you this: an acquaintance bought an SUV yesterday and got $10,000 off the price. They were planning to haggle for $2500 off, and it was fairly easy to get the big discount with little effort. Sounds like times are desperate.
posted by cherie72 at 8:47 AM on December 30, 2008

Response by poster: @cherie72 - what kind of SUV?
posted by schmoppa at 9:36 AM on December 30, 2008

Another scenario: Mrs. BBB worked at a car dealer for many years, and the dealership would sometimes get incentives from the Head Office--sell 10 Chevy Blazers by the end of the month, and we'll give you a bonus, usually $1 to $5 thousand, depending. This would give the dealer incentive to sell those last Blazers to reach number 10, they would take a loss so they could get the bonus. There is no way you as a buyer could know this, but if it's the end of the month, and there's a bonus hanging out there, you could benefit. So, once again, it depends on what incentives, if any, the dealership may have.
posted by BozoBurgerBonanza at 9:51 AM on December 30, 2008

You may get a better deal on 2009s, actually -- I just helped one of my sons buy a new Honda Civic, due to an accident where he totaled his previous ride (so no trade-in).

We'd originally been shopping for low-mileage late models, and hunting around online I had zeroed in on a 2008 with 9000 miles. When I called the dealership and spoke with the internet sales guy (aka the fleet sales guy -- the only way to go if you know what you want, in my opinion -- bottom dollar, no haggling and minimal car sales theater), he ended up offering me a brand new 2009 for $1300 more.

Checking online sources for "best recent prices in your area", this beat what I should have been able to buy it for by about $2300. They didn't actually come out and say it, but I had the clear impression that this dealership at least was quite a bit more motivated to get the 2009s off the lot by the end of the year than the older models.

Good luck!
posted by nonliteral at 10:15 AM on December 30, 2008

I got a pretty decent deal (about $2.5k off MSRP) on a new 2006 Subaru the day after New Year's 2007. So, if you're buying new, yes, there's a possibility for a deal. But, they're not really desperate--they just want to move that inventory.
posted by Netzapper at 11:53 AM on December 30, 2008

>4. How likely is a dealer to go for a price under invoice or dealer cost?

You're a willing & able buyer, go out there and fire out a price that makes you happy and if you don't get the sale that's their problem not yours. I actually prefer dealing in person since it shows that I am willing to invest time and energy into the deal.
posted by troy at 2:43 PM on December 30, 2008