Is $5000 Over MSRP a Fair Price - New Car Negotiating Tips
New car buying has never been crazier, but I hope these tips will help buyers to understand how to work around this chaos rather than to fear it!
The worldwide chip shortage is the driving factor in turning the present day car market upside down. About 1,500 micro-chips are built into new cars, giving them all the cool features we know and love - thus a shortage of these chips means less new cars being manufactured. For buyers in the car market this chip shortage means that you can expect to pay MSRP (Manufacturer Suggested Retail Price) or above MSRP for a new vehicle.
Today, negotiating a price below the MSRP is nearly unheard of, but don’t let that stop you from shopping for a vehicle that can fit your family’s needs. As moms we don’t always have the luxury of waiting to buy a new vehicle, because we can’t stop our families from growing and their needs changing. So lets dive into some new car negotiating tips that will help you to feel empowered, get the best deal, and (hopefully) have fun!
Tip 1 - Start the Process Early
Gone are the days of walking into a dealership and having dozens of options of desired vehicles, and then walking out with a car that afternoon. Instead be prepared to not even have a vehicle to test drive - almost every new car vehicle being sold is an ordered vehicle. In order to stay on track deeply think about your timeline, and start shopping 6-8 months before you need this new vehicle. You will most likely need to order a new vehicle, so do not waste any time.
Tip 2 - Be a Serious Buyer
If you show up to the dealership and you’re not a serious buyer, you will not get the attention you need to find a car and ultimately get a good deal. Instead walk into the dealership say exactly what car you want to buy. In this case the dealership knows that if they don’t find you the car you want, another dealership will. Your biggest leverage in this market is that you can say “I want this car at the best price and I will buy it today”.
Tip 3 - Play with the Build Your Own Feature
Once you know the car you want to buy visit the manufacturers website. Here you can understand the different packages and trim levels, rather than hearing about them for the first time in the dealership. This will allow you to know what trim level you want and how much it’ll cost before entering the dealership.
How to Know what a Fair Price Over MSRP is
We have two tools straight from Edmunds.com that can help us figure out how to get the best price over MSRP.
The first tool is gives an idea of how much you should pay over MSRP. Visit Edmunds.com and search for their new vehicle inventory. You will be able to see real vehicles and their suggested MSRP versus how much others are paying. For example a 2022 Kia Telluride has an MSRP of $44,890 but others are paying $47,357 - meaning $3000 over MSRP is considered a good deal. Furthermore you can click on the bar that says “Show the Edmunds Deal” and you will be able to see a chart showing what would be a good or a bad deal or this vehicle, and how many people in your area have paid for this model in each price range. If you visit a dealership and they presented you with a number thats on the highest price on the Edmunds scale - consider taking your business elsewhere, or be prepared to negotiate down to a lesser price. Remember to familiarize yourself with this Information and be prepared to use it in realtime at the dealership.
The second tool is useful if you have a quote from a dealership and want to see if it’s a fair price. Again, visit Edmunds.com and click on “New Car Pricing” then find where it says “Price Checker”. From here enter the make, model, year, style, and even the dealership in your area that gave you the original quote! By doing this you can see what other buyers from that exact dealership have paid for the same car. I know, tea. Now enter the dealer quote price and the MSRP from quote. Then click “Rate this Offer” and Edmunds will say if they think it’s a good offer that you should take or a bad one that you should pass on. This feature also includes an estimate on what the taxes and fees would cost!
Make sure you use both of these features as negotiation tools and bring these numbers to the dealership beforehand!
