This is a good time to buy a car--no?
October 7, 2008 6:54 AM Subscribe
I am going to buy a used car for my teen. I have the cash. The economy is in shambles. Cars are not exactly selling like hotcakes now. Shouldn't I be able to go to a car dealership and get a helluva deal now? What am I missing here?
You might want to try following this car buying guide by Consumerist.
posted by borkencode at 7:18 AM on October 7, 2008 [3 favorites]
posted by borkencode at 7:18 AM on October 7, 2008 [3 favorites]
I should think that if you were looking at an SUV, you could get it for next to nothing, particularly if it's used.
Another trick: try to identify used cars that have been sitting on a dealer's lot for close to a month. These are sometimes purchased at auction and financed, with the first payment (plus interest) due at 30 days. If they haven't sold the car by then, they're starting to lose money on it and can be more motivated to get it off their lot. Or so I hear.
posted by jquinby at 7:19 AM on October 7, 2008
Another trick: try to identify used cars that have been sitting on a dealer's lot for close to a month. These are sometimes purchased at auction and financed, with the first payment (plus interest) due at 30 days. If they haven't sold the car by then, they're starting to lose money on it and can be more motivated to get it off their lot. Or so I hear.
posted by jquinby at 7:19 AM on October 7, 2008
Best answer: One of the problems is that, to save money, people are really scrambling for those used, low cost fuel efficient vehicles. Monster SUVs and sports cars are being traded in for smaller 30mpg'ers that were cheaper to begin with. Maybe you *can* get a super deal on a used $20,000 SUV that's been sitting on the lot for a long time, but a great deal on a $20k car still won't make it as cheap as an ok deal for a $10,000 car.
In New England, gas efficient used cars from 2002 are selling for about what they were going for in 2003. Effectively, you could have driven for free for 5 years. That's a *huge* premium.
posted by Gable Oak at 7:26 AM on October 7, 2008
In New England, gas efficient used cars from 2002 are selling for about what they were going for in 2003. Effectively, you could have driven for free for 5 years. That's a *huge* premium.
posted by Gable Oak at 7:26 AM on October 7, 2008
Here are some data points from the Manheim used auto index.
As others have expressed, we need more input--how much of a discount are you expecting? What are you trying to buy? I'd guess that whatever you look at to judge economic reality is not the same thing a user car dealer considers. It may just be a matter of patience.
posted by mullacc at 7:33 AM on October 7, 2008
As others have expressed, we need more input--how much of a discount are you expecting? What are you trying to buy? I'd guess that whatever you look at to judge economic reality is not the same thing a user car dealer considers. It may just be a matter of patience.
posted by mullacc at 7:33 AM on October 7, 2008
I would check for private sellers first. Do not deal with car lots if you do not have to. Before you say "what if I buy a lemon from a private seller?" see the car first. Inspect it and if you are interested have the seller bring it down to your mechanic and then do a once over on it. It might cost you 100 bucks to have it looked at but in the end it will be worth it. However if you have your heart set on the car lot approach then do this... Research. Find a car(s) that you are interested in and find out as much about them as possible. Then look online and find several of them. Let the salesperson know that you have a whole list of other cars on other lots. Make them compete for you. Cars are not selling like hot cakes right now. If you show them several other car listings on several other lots they will try everything in their power to make you stay and buy one of their cars. Lastly do not be impulsive. Even if you really really really want the car walk away and get off the lot. Regardless of whatever high pressure strategy they throw at you. You can think about it and make a decision at our home where you can think. Also did you say you have cash to buy it with? Use that as a bargaining chip. No financing is a good thing.
posted by Mastercheddaar at 7:38 AM on October 7, 2008
posted by Mastercheddaar at 7:38 AM on October 7, 2008
A domestic sedan will usually be the best bargain, especially a mid-size or larger. Sure, you'll pay more for gas, but you'll more than make up for it in a lower-priced car. Plus, such vehicles are usually not hot-rodded, and tend to be well-maintained. If your teen complains that it's not cool enough, then s/he can try to look cool walking! :)
posted by Fuzzy Skinner at 7:53 AM on October 7, 2008
posted by Fuzzy Skinner at 7:53 AM on October 7, 2008
I just purchased a pick-up truck new for about 40% off the MSRP. They are giving them away. I think you have a better chance at getting a great deal on a new car because the manufacturers are subsidizing the discount. A used car is coming out of the dealer's pocket. He may be a little slower to give. Or, a desperate private seller as Mastercheddaar suggested.
posted by JohnnyGunn at 8:34 AM on October 7, 2008
posted by JohnnyGunn at 8:34 AM on October 7, 2008
The thing you're missing is that the supply/demand economic model doesn't fit the consumer product market very well.
posted by Willie0248 at 8:36 AM on October 7, 2008
posted by Willie0248 at 8:36 AM on October 7, 2008
Shouldn't I be able to go to a car dealership and get a helluva deal now? What am I missing here?
You sound a little frustrated. Have you not been getting the deals that you'd hoped you would be getting?
Business transactions don't take place between abstract economic forces; they take place between flesh-and-blood human beings. For some of those human beings, refusing to compromise on the price is just a matter of pride. They know what the current market price is. They know that the rate they're charging is well above that. But they refush to yield because they cling to the notion that someone, somewhere out there, will pay the price they want.
Human beings are funny in that regard.
posted by jason's_planet at 9:03 AM on October 7, 2008 [1 favorite]
You sound a little frustrated. Have you not been getting the deals that you'd hoped you would be getting?
Business transactions don't take place between abstract economic forces; they take place between flesh-and-blood human beings. For some of those human beings, refusing to compromise on the price is just a matter of pride. They know what the current market price is. They know that the rate they're charging is well above that. But they refush to yield because they cling to the notion that someone, somewhere out there, will pay the price they want.
Human beings are funny in that regard.
posted by jason's_planet at 9:03 AM on October 7, 2008 [1 favorite]
One possible factor is that, since the economy is poor, people are keeping their cars longer then they used to. That is, the poor economy also reduces the supply of used cars. Also, it's not clear how the poor economy would affect the demand for used cars: while some on the lower end of the scale may be putting off buying a used car, some towards the middle who would normally be looking for a new car might be looking at used cars instead.
posted by DevilsAdvocate at 9:09 AM on October 7, 2008
posted by DevilsAdvocate at 9:09 AM on October 7, 2008
Supply and Demand is a good way to look at the basics of changes in price and the # sold.
The question writer assumes that as we get poorer during an economic downswing we buy fewer used cars.
However, used car sales seem to be increasing . This suggests that as people get poorer they are looking for used and not new cars.
Just like people are probably eating more canned soup instead of meals out, or ramen instead of spaghetti or hamburger instead of steak.
posted by akabobo at 10:09 AM on October 7, 2008
The question writer assumes that as we get poorer during an economic downswing we buy fewer used cars.
However, used car sales seem to be increasing . This suggests that as people get poorer they are looking for used and not new cars.
Just like people are probably eating more canned soup instead of meals out, or ramen instead of spaghetti or hamburger instead of steak.
posted by akabobo at 10:09 AM on October 7, 2008
Response by poster: The hubby and I have been researching online and at the car lots (new and used) for about a month and of course there's barely a small fuel efficient car to be found. Forget about a Honda or Camry--they are scarce. Big ole SUVs are a dime a dozen.
We have been looking seriously at the Jeep Liberty--can get one anywhere from 5k on up depending on how many miles it has on it. Also looking at the Jetta/Passat seriously. We have looked at some for sale by owner also. The kid basically has to drive to school and back and to a few extra curricular activities.
OK , so maybe the car dealers aren't as desperate as I thought.
posted by sandra194 at 10:21 AM on October 7, 2008
We have been looking seriously at the Jeep Liberty--can get one anywhere from 5k on up depending on how many miles it has on it. Also looking at the Jetta/Passat seriously. We have looked at some for sale by owner also. The kid basically has to drive to school and back and to a few extra curricular activities.
OK , so maybe the car dealers aren't as desperate as I thought.
posted by sandra194 at 10:21 AM on October 7, 2008
We have been looking seriously at the Jeep Liberty--can get one anywhere from 5k on up depending on how many miles it has on it
FWIW, my gf has this car. She gets maybe 15 mpg with it. I would seriously suggest looking at 4-cylinder econoboxes for a teen. Gas isnt getting any cheaper. These things are cheap because Jeep makes more of these than they can sell and people with them don't ever go off-road and have no need for trail rating or whatever, and dont want to pay the gas premium.
posted by damn dirty ape at 10:27 AM on October 7, 2008
FWIW, my gf has this car. She gets maybe 15 mpg with it. I would seriously suggest looking at 4-cylinder econoboxes for a teen. Gas isnt getting any cheaper. These things are cheap because Jeep makes more of these than they can sell and people with them don't ever go off-road and have no need for trail rating or whatever, and dont want to pay the gas premium.
posted by damn dirty ape at 10:27 AM on October 7, 2008
>Forget about a Honda or Camry--they are scarce.
Hondas and Toyotas can be scarce, but have you tried looking at Hyndais or Saturns? I find that they are almost as good as a Civic but are much cheaper.
posted by damn dirty ape at 10:28 AM on October 7, 2008
Hondas and Toyotas can be scarce, but have you tried looking at Hyndais or Saturns? I find that they are almost as good as a Civic but are much cheaper.
posted by damn dirty ape at 10:28 AM on October 7, 2008
Best answer: Nissan is another good and affordable substitute for a Honda or Toyota. I have an '01 Sentra that's still running great at 120,000 miles. It cost less than $12K new.
posted by vorfeed at 10:42 AM on October 7, 2008
posted by vorfeed at 10:42 AM on October 7, 2008
OK , so maybe the car dealers aren't as desperate as I thought.
I think they are more desperate than you thought. They need to make bigger profits per sale in order to cover their overhead, especially the overhead on their new car side.
A good way to look for a used car is to look for competing models being sold at the competitor's dealership, like, say a Toyota at a Nissan dealership. The dealer can't talk the model up or inflate the price because that would be advertising the enemy, but they have to get the car off the lot. This is where deals are made.
posted by Pollomacho at 11:04 AM on October 7, 2008 [2 favorites]
I think they are more desperate than you thought. They need to make bigger profits per sale in order to cover their overhead, especially the overhead on their new car side.
A good way to look for a used car is to look for competing models being sold at the competitor's dealership, like, say a Toyota at a Nissan dealership. The dealer can't talk the model up or inflate the price because that would be advertising the enemy, but they have to get the car off the lot. This is where deals are made.
posted by Pollomacho at 11:04 AM on October 7, 2008 [2 favorites]
My in-laws got a new (cherry red!) Corolla on the 30th of Sept. -- end of month and end of quarter -- for a good deal. (No, I don't know the actual price.) This is in New England, and from Ernie Boch, too. Heck, they even traded in a '97 Camry. No idea how they worked this magic.
posted by wenestvedt at 11:17 AM on October 7, 2008
posted by wenestvedt at 11:17 AM on October 7, 2008
Jeeps are cheap because Chrysler over-saturated their own market with redundant vehicles. They also get poor gas mileage.
You may want to look at Hyundais - they are equal with Honda in quality/reliability, yet they are far cheaper used. (Check out where VW falls on that reliability list).
If you want a 4WD vehicle, the Tucson is nice. Hyundai's luxury model -the XG350 - is also very reasonable. You could get a 2004 XG350 for around $10-11,000 and it would have a V6, heated seats, and leather.
posted by Ostara at 12:31 PM on October 7, 2008
You may want to look at Hyundais - they are equal with Honda in quality/reliability, yet they are far cheaper used. (Check out where VW falls on that reliability list).
If you want a 4WD vehicle, the Tucson is nice. Hyundai's luxury model -the XG350 - is also very reasonable. You could get a 2004 XG350 for around $10-11,000 and it would have a V6, heated seats, and leather.
posted by Ostara at 12:31 PM on October 7, 2008
well there is always Subaru cars as well. The mileage on something like a Forester at 18 mph is not great but the vehicle is reliable and works well in snow, if that is a concern.
posted by jadepearl at 1:32 PM on October 7, 2008
posted by jadepearl at 1:32 PM on October 7, 2008
I've been looking for a second car for about half a year now; I'm in no big rush so I've gotten some perspective on the overall market. It seems that, largely due to gas prices, it's a buyer's market for big American cars and a seller's market for smaller foreign cars. You can get a 2005 Maibatsu Monstrosity for a handshake and a song, but a 1995 Toyota Camry with 175k miles will set you back $10,000.* Everyone is scrounging from the same small pool of econoboxes. One reason that this pool is so small is SUVs and trucks outsold smaller cars during the late 90's and early 00's so the manufacturers made fewer of the cars that are so desirable right now. Scarcity + demand = higher prices.
Another thing to consider is the current credit situation.** Banks are reigning in credit lines so car dealers can't offer the great deals they've had in the past seven-or-so years. NPR has been airing interviews with car dealers bemoaning the fact that they simply can't move cars since the banks are all freaking out.
*gross hyperbole, but only just barely.
** I'm assuming you're in North America or otherwise in a region that is affected by the current economic woes.
posted by lekvar at 1:59 PM on October 7, 2008
Another thing to consider is the current credit situation.** Banks are reigning in credit lines so car dealers can't offer the great deals they've had in the past seven-or-so years. NPR has been airing interviews with car dealers bemoaning the fact that they simply can't move cars since the banks are all freaking out.
*gross hyperbole, but only just barely.
** I'm assuming you're in North America or otherwise in a region that is affected by the current economic woes.
posted by lekvar at 1:59 PM on October 7, 2008
As that (2004) article points out, Kia is another brand that has improved its quality with its newer cars (although the long-term reliability has yet to be proven). I drove a rented 2007 Kia Optima this year and it was a pretty nice car, although I haven't recently driven a Camry or Accord to compare head-to-head.
Consumer Reports has a used car buying kit that helps you select vehicles in your price range and your desired characteristics (although surprisingly it does not let you sort by MPG). CR always says you should know the price before you start negotiating.
In any case, I would continue the rest of this month browsing around town, aiming at going in to one of the dealerships right at the end of the month and pressing your proposition. Maybe the deal you want is still a money-loser for them, but in the current circumstances they should love cash. Just be prepared to play hardball and walk off the lot if necessary. That's often when you get a "last offer" which will be about as close as you can get to what the dealer is really willing to accept.
posted by dhartung at 4:25 PM on October 7, 2008
Consumer Reports has a used car buying kit that helps you select vehicles in your price range and your desired characteristics (although surprisingly it does not let you sort by MPG). CR always says you should know the price before you start negotiating.
In any case, I would continue the rest of this month browsing around town, aiming at going in to one of the dealerships right at the end of the month and pressing your proposition. Maybe the deal you want is still a money-loser for them, but in the current circumstances they should love cash. Just be prepared to play hardball and walk off the lot if necessary. That's often when you get a "last offer" which will be about as close as you can get to what the dealer is really willing to accept.
posted by dhartung at 4:25 PM on October 7, 2008
Best answer: Fuel economy is relative to utility. As you point out, your kid doesn't have to do too much driving; weigh the cost of paying a premium, possibly hundreds or thousands of dollars, for a fuel-efficient small vehicle against the cost of the very few gallons of fuel that will be saved in a low-mileage lifestyle. If I were buying my child a vehicle right now for a few short trips per week, I'd focus on a moderately sized, safe, late model SUV or pickup at a bargain price. The thousands you save on the initial purchase will make the marginal cost of a few extra gallons of fuel trivial. And if college is in the future, you'll be glad you've got that extra cargo space come moving day.
posted by dinger at 5:40 AM on October 9, 2008
posted by dinger at 5:40 AM on October 9, 2008
SUVs arent safe.
Also people's driving habits change. He's probably going to college soon. A low mpg car is really worth it.
posted by damn dirty ape at 12:48 PM on October 9, 2008
Also people's driving habits change. He's probably going to college soon. A low mpg car is really worth it.
posted by damn dirty ape at 12:48 PM on October 9, 2008
This thread is closed to new comments.
posted by Inspector.Gadget at 7:02 AM on October 7, 2008