New Cars Dealership

The prices of new cars are starting to drop. But not much

The prices of new cars are starting to drop. A little.

Analysts say that cars are still selling for higher than manufacturers’ sticker prices on average but they are closer. Several car brands are selling below the sticker price, which was once a common practice but has become rare in recent years.

Edmunds.com analyst Ivan Drury stated that new car prices were $700 higher than the manufacturer’s suggested retail pricing for the first six months. Edmunds reports that prices have dropped to $230 per month over the MSRP in the last few months.

However, some car brands still sell for more. On average, Land Rover models still sell at $4,500 above the sticker price, while Kia models go for around $1,600 more than the sticker price. Edmunds.com data shows that Hondas sell for $1,360 more than their suggested retail price.

According to Cox Automotive analysts, mainstream buyers tend to pay more for non-luxury cars than luxury buyers. Luxury car buyers make up 17% of the market. However, they pay more than the sticker – $66,000, compared to $44,000 for nonluxury brands. Mark Schirmer, a Cox spokesperson, stated that the slight price difference may be due to non-luxury vehicles having many of the same features and appointments as luxury cars. Dealers now demand that customers pay the product’s actual price, not the manufacturer’s suggested price. He said that luxury car dealers might place greater value on customer experience than mainstream dealers and therefore be more aggressive in pricing.

Cox’s auto pricing experts show that buyers pay $527 more than the sticker average. This is higher than Edmunds claims but lower than any time earlier in the year. According to spokespersons for both companies, the difference is due to differences in data sources and methods of analysis.

Dealerships asking customers for more than the sticker price to buy a car are considered unusual and only used for highly desirable or difficult-to-find models, such as high-performance sports cars. Cox Automotive says that car dealers have been able to raise prices to above MSRP for the past 17 months due to vehicle inventory shortages. Dealers can negotiate car prices individually, which is a significant advantage over most other things. Supply chain problems have caused manufacturing slowdowns. Car companies have struggled to get certain parts. This has made it difficult for car dealers to negotiate hugely.

Ford and Honda have seen customers willing to accept lower inventories, higher prices, and longer wait times to obtain their vehicles. These executives have stated that they do not plan to go back to the days of waiting for cars and SUVs to sell.

Cox reports that vehicle inventories are still low, particularly for Honda and other manufacturers, but they have been at their highest level since June 2021.

Rebecca Rydzewski from Cox Automotive stated, “If consumers are flexible about make and model it will be possible for you to find a great deal at year-end events.”

Edmunds reports that some large SUVs, such as the Lincoln Navigator or Volvo XC90, are being sold at significant discounts of $1,400 to $1,900 off stickers. According to Edmunds data, Volvo and Lincoln are the two brands that offer the largest discounts off MSRP. Cox also found that Buick offers some significant discounts.

Drury stated that customers can get very good interest rates for new car loans with shorter-term loans of 36 to 48 months. These shorter terms can result in higher monthly payments but buyers can still save thousands of dollars on interest due to rising rates. Expect the Federal Reserve to keep raising its benchmark rate, which could lead to higher interest rates for auto loans. The most important factor in how many auto lenders will charge is the individual’s credit score. However, there are still great financing deals available for those who are well-qualified. According to Bankrate.com. According to Cox Automotive, the number of offers of 0% interest rates has increased dramatically since the beginning of March.

Drury said that used car prices are starting to fall a bit. This could encourage new car buyers back into the market.

He said that consumers who have been sitting on the sidelines and watching their trade-in appreciate will feel the urge to take action if they want maximum trade-in value for their vehicle.

Inflation and high gas prices will mean that owners of fuel-efficient, cheaper models will receive the highest trade-in values, Cox Automotive analyst Brian Finkelmeyer stated in a recent report. However, those who trade in larger, more expensive vehicles may be disappointed.

He wrote, “Used-car inventories in the country are currently bloated by expensive used merchandise priced more than $35,000,”

Edmunds’ Drury said that it will take a while before shopping is back to normal. Buyers will still be able to get steep discounts on many vehicles. He said that this won’t happen until 2023, or even 2024.

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