Regular readers of my column know I recommend that you don’t buy a new or used car until the last quarter of this year unless you must. This is because of the extreme, but temporary, spike in new and used car prices. This record increase in all vehicle prices emanates from the extreme shortage from the microchip shortage with simultaneous extreme demand from the booming economy. Of course, no one anticipated that such a thing would occur because of the global COVID-19 pandemic. I’ve been a cars dealer since 1968 and I never recall a time when most new cars were being sold above sticker, MSRP.
I came up with a solution to this temporary hyper-inflation problem. Simply and succinctly stated, you can buy your new car today, but pay the price that it will sell for after prices drop sharply in October, November, and December. The caveat is that you cannot buy a new car from dealer’s stock and take delivery
today or even soon. You must order your new vehicle from the dealer’s manufacturer. It typically takes 2 to 3 months to receive a custom ordered car. By the time you’ve done your homework selecting the right vehicle, shopping for the best price, and placed your order with the manufacturer, your new vehicle will arrive in the last quarter of this year. The price will be several thousands of dollars lower than you’ll pay today.
You accomplish this by making it part of your new car purchase contract that you pay the best price you can get in October-November-December than the price you’d have to pay today. I caution you that you’ll have to talk to a dealership manager, maybe a general manager or the dealer himself, to finalize this agreement. A salesman is highly unlikely to agree to this because he’s not authorized, and he’s mainly interested in selling a car today from stock at MSRP+ to earn a huge commission.
Yes, you’ll have to wait for your new car, but you’ll get exactly the car you want…model, color, and options. Buying a car from dealer stock today, you’re almost sure to make lots of compromises, not to mention the highest markup you’ll ever pay again on a new car.
How can you be certain that you will pay a very low and fair price in October-November-December? Buy your new car through www.CostcoAuto.com or www.TrueCar.com. I recommend that you use Costco. If you’re not a Costco member, pay the $65 annual membership fee just for the privilege of buying your new car through a Costco approved dealer. Costco dealers are contractually obligated to sell their members cars at a lower price than they sell anybody else that same car. Today, because Costco dealers are selling all their cars at highly inflated prices, the Costco price is still too high, even though it’s lower that all their other prices.
If you plan on trading in your current car, you have a problem because used car prices are also at record high prices. Your trade in value will drop, but not enough to entirely offset the savings on your new car. This is how you can “have your new car cake and eat it too.” Sell your trade-in to the highest bidder today. You’ll get a record high price for your trade. Now you’ll save thousands on buying your new car and almost as much on selling your trade-in…a “twofer”. Be sure to shop your used car with at least three buyers…the dealership you bought your new car from, CarMax, www.WeBuyAnyCar.com, www.Carvana.com, and www.Vroom.com.
You’ll ask, how am I going to get along without my old car for three months? The answer can be carpooling, Uber or Lyft, or doubling up on another car in your family. Renting a car is very expensive today, but you have ask, will the thousand or more dollars I get on my car today vs. three months from now offset my substitute transportation costs?Have Your “New Car Cake”