mercedes cars for salebuy cars Comes with the rules. Rules like “the sticker price is just a starting point and negotiate down from there” and “cars are cheaper at the end of the month and the end of the year.”

This rulebook has been phased out in the last couple of years. Shoppers used to pay more than the MSRP, or the manufacturer’s suggested retail price. They watched prices rise steadily, with no periodic declines. The end of well-established styles leaves many car shoppers confused. The most common question is, “When will new car prices drop?”

The answer is a little more complicated. In some cases, prices for new cars have already begun to fall. In other cases, they may not fall for the foreseeable future. The new world of car shopping requires an open mind and new skills.

Brian Finkelmeyer of Cox Automotive likens shopping for a new car to this quote from science fiction writer William Gibson.

“The future is already here. It just isn’t evenly distributed.”

Finkelmeyer is the Senior Director of New Vehicle Solutions at Cox Automotive, the parent company of Kelley Blue Book.

In this story, we’ll explain how to navigate the new car buying patterns and dealer pricing, so if you’re in the market for a car, you’ll be equipped with the best information we know from our experts. We’ll also dig deeper to answer the question about car prices dropping, even if the answer remains unclear.

What drives car prices

According to Finkelmeyer, these are the typical factors that influence new car prices:

  1. Stock Availability
  2. Manufacturer’s incentives
  3. Merchant discounts
  4. car swap value

However, the four countries have experienced major turmoil in the past two years.

Some brands have stock, some don’t.

In the past several years, inventory has fallen to its lowest levels, driven in large part by a shortage of microchips around the world. Without enough microchips, which control everything from engine timing to navigation systems, automakers couldn’t build cars as quickly as they would like.

Automakers measure their inventory of new cars to sell in a measure they call “inventory days” — how long it would take to sell new cars at today’s sales pace if they stopped building new cars. In 2019, most were aiming to keep six weeks (or 42 days) or more in stock. In 2022, the stock of many automakers has fallen to just seven days.

Related Is now the time to buy, sell or trade in a car?

Some automakers have recovered, while others have not.

“Some brands, such as Buick, Jeep, and Ram, have a 75 to 85 day supply,” Finkelmeyer says. Others still sit well in the normal position. “Kia has an average number of show days for the brand of 19.”

Incentives now vary from brand to brand, from lot to lot

When automakers routinely build a surplus of cars, they discount them to take cars off a lot of dealerships.

Now that some don’t have cars in abundance for sale, they hardly do a discount. Still others need deductible cars to transport minerals.

For example, the three best-selling cars in America are three full-size domestic trucks – the Chevrolet Silverado, Ford F-150, and Ram 1500. Chevrolet and Ford dealerships, Finkelmeier says, have an average supply of 40 to 60 days. of vehicles. Ram dealers often stock twice that.

According to Finkelmeyer, estimated incentives for a Ram 1500 pickup were $4,426, more than double the $1,933 on a Chevrolet Silverado and four times the $1,059 on a Ford F-150 in September.

Traditionally, merchants often base their discount offers on manufacturer incentives. You’ll see these less often right now.

The higher the value of your exchange, the greater the frustration of the offer

Trade value is the last factor driving prices and the weirdest in the market today.

“Used car stocks across the country are currently bloated with expensive used merchandise fetching over $35,000,” Finkelmeyer says.

Automakers scaled back production for several years after the 2008 recession. This makes it difficult to find older auto dealers for less than $10,000.

Meanwhile, high gas prices throughout 2022 have some buyers looking to ditch newer-style trucks and less fuel-efficient SUVs — even if they are relatively new.

Merchants estimate your trade based on what they need in stock. They are more likely to offer a good deal on a car less than people are looking for at the moment. The supply of car dealers with relatively expensive used cars is increasing.

“Consumers who trade in a 2018 Honda Civic will be happier with the trade-in valuation than those who trade in a 2021 Jeep Grand Cherokee,” Finkelmayr explains.

New skills for a new market

So, when will car prices drop?

For some brands and some dealers, prices are starting to drop a bit.

“For some high-volume brands such as Honda, Kia and Toyota, new stocks remain very tight in the 20-30 day supply range, and deals are almost impossible to find,” Finkelmeyer says.

With other brands, shoppers must be prepared to hunt. For example, Chevrolet and Ford currently have between 40 and 60 days of supply for some vehicles. This is almost the historical norm.

However, other automakers are facing a glut in selling new cars. “If consumers want the best selection and the best deals, they should head to their local Jeep or Ram dealer,” Finkelmeyer says. These dealers “offer 0% for 48 months or 2.9% for 72 months on select models.”

Large SUV shoppers will find a Ford Expedition, Chevrolet Tahoe and GMC on sale this month at nearly sticker price. Jeep Wagoneer is offered with an incentive of over $4,700.

Compact SUV shoppers will find discounts on the Nissan Rogue and Jeep Cherokee (they lead the segment with a 45-day supply) but not the Toyota RAV4 (rare at the moment, with only seven days).

Shoppers should also be prepared to shop in their stores. Withdrawing is a little more complicated, but it may make sense to sell your old car to one dealership and buy your new one from a different one if the numbers are better. Use the Kelley Blue Book Instant Cash Offer tool to shop your business deals at agents near you. When you allow deals to reach you without any obligation, you can choose the barter offer that best suits your situation.

What to expect: looking forward

But what if you desperately want a popular low-supply car? Then you may need to be patient.

“Ultimately, we believe that inventory levels and incentives will increase going forward,” Finkelmeyer says. The Federal Reserve’s recent moves to curb inflation are making it harder for everyone to buy big tickets. This will slow down sales.

The shortage of microchips will likely be resolved sometime in 2023. This will lead to oversupply.

These trends can bring down the prices of even the most popular cars. But experts can’t say when this will happen. Instead, says Finkelmayer, shoppers should be flexible.

It is already possible to find a low price for a new car. It may not be the car you thought you would buy. Or you may need to go to buy the car in a smaller town outside the big city where the competition isn’t tough.

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