Personal Finance
What’s the Car-Buying Process Like in 2023?
When my wife and I purchased our most recent car in 2019, we opted for a “more modern” solution by buying online and retrieving our new (used) vehicle from a vending machine. Despite such platforms growing in popularity, believe it or not, there is still the old fashioned way: visiting a dealership. That’s exactly what we did this week as we accompanied my mother-in-law on a test drive and, to our surprise, ended up a party to the purchasing of a new minivan.
I assume most people of a certain age have gone through the dealership car-buying process at some point — but things are a bit wonky in 2023. In particular, how do you negotiate a deal when they can’t even keep a certain model of vehicle on the lot? Let me share a bit about our experience.
Buying a Vehicle in 2023: The Pitfalls of Picking Up a Popular Model
What she was after (and how we got to the point of buying)
For the past few months, my mother-in-law has been considering replacing her old minivan — with the additional hope of then handing the old one down to her daughter and her husband as they grow their family. After reading a number of articles and watching YouTube videos, she landed on the hybrid Toyota Sienna.
There’s just one problem: they’re apparently quite popular. In fact, when they went to the dealership, they didn’t have any for her to test drive. Instead, they were only able to discuss the various trim/package options and note her interest. At the time, they estimated that, between their allocated vehicles and the number of people on their list, it’d probably be months before she’d have the chance to actually buy one.
Luckily for her, when she called last week to see if we could check out the van while my wife and I were in town, they’d just received a couple of Siennas for test drives.
As a bonus, when we arrived at the dealership, the salesman she’d be working with let her know that one vehicle would be coming available sooner than expected.
Nabbing a short-supply vehicle
The full story as to why this vehicle was suddenly available was that it had been reserved by someone else but that person grew tired of waiting. After checking with some others on the list who declined it (due to holding out for specific features), this particular vehicle could be hers if she wanted it. While it didn’t have quite everything on her wish list, it checked off the most important elements.
With that, we set off on our test drive before heading back to the shop and “talking turkey.”
Over MSRP
Upon our return (and after looking even more closely at the test model), the salesman printed off the spec sheet for the specific vehicle that was available. This included the price at the top. However, as we were informed once we indicated that we’d be interested in moving forward, that MSRP wouldn’t be what the asking price would be.
In most car-buying situations, you can usually negotiate for a price often thousandS below the manufacturer’s price. For example, some buyers might set a goal of getting down TO the so-called “invoice price” — which may or may not actually be what the dealership paid for the vehicle. Of course, given the laws of supply and demand, dealerships who are already having trouble keeping a certain model in stock may start their negotiations (if there are any to be had) above this MSRP.
I’ll get into how this turned out for us later — but, first, let me cover the final piece of the puzzle.
Trade-in
Currently, my mother-in-law and her youngest daughter are the only ones in the house. Yet, they own a combined total of four vehicles. So, in addition to the aforementioned plan to pass the old van onto another daughter, they decided to trade in another one of their cars. In this case, that was a 2012 Toyota Corolla.
I’ll admit that I had no idea how much this car was worth — but my sister-in-law had previously checked Kelly Blue Book and a couple of other resources ahead of time. And while the used car market has softened a bit since the crazy heights it reached during the pandemic, the value was still pretty impressive IMHO. Plus, by throwing a trade-in into the mix, we’d have another means of negotiating.
What she paid
When the salesman returned from the dreaded “I’ve got to go talk to my boss” conversation, he laid out the offer. First, while they are apparently currently asking for $2,000 to $3,000 over MSRP for some of their most popular models — namely hybrid ones — he said that with my mother-in-law’s history with the dealership (we were trading in another Toyota that was purchased there, after all), they’d “only” mark it up by $500.
As for that trade-in, the offer came back at $8,000. Although that was lower than the KBB private sale estimate of $10,000 (which is to be expected), we deemed it to be pretty fair. Plus, that $8,000 credit would reduce the tax on the overall vehicle cost by more than $500.
With that, out the door, she was looking at a net of around $33,000. And so we… took the deal. That’s right — we didn’t even bother negotiating. Honestly, we figured we didn’t really have any leverage and we were happy enough with the price, so why bother?
By the way, the car isn’t actually built yet. Nevertheless, with it slated to arrive next month, it’s still sooner than she’d likely have obtained one otherwise.
The moral of the story
I’m sure there are people out there reading this that totally would have played a bit of hardball and perhaps could have talked their way out of that $500 up charge or arranged for a better trade-in value. But, here’s the thing: whether you’re buying in a strange market like now or negotiating from a stronger position, the key is to have your goal price in mind. Yes, saving some extra money could be great — but $33,000 was squarely in the range of what she was willing to pay.
Ultimately, markets can swing back and forth — but the principles of buying remain the same. In my view, whether you’re making a large purchase (such as a house or car) or just making a small splurge, the key to making a smart purchasing decision is to know how much you’re willing to spend and stick to that. As long as you do that, hopefully you’ll have fewer regrets about what you buy.
Author
Other Articles by Kyle Burbank
Small Business News
Credit Cards
Discover Announces 5% Bonus Categories for First Quarter of 2024
With 2024 sneaking up on us, Discover has announced its rotating 5% bonus categories for the first quarter of next year. About the Q1 2024 bonus categories: From January through March 2024, Discover It customers will be able to earn up to 5% back in two categories: restaurants and drugstores. According to the company, the Restaurants category includes full-service establishments, cafes, cafeterias, fast-food locations, and dining delivery services. For the...
FinTech News
