Sometimes we have to wonder if auto manufacturers, dealership networks, and all other entities involved in selling new cars operate by the same business principles as the rest of the economy.
After all, even though prices for shiny new vehicles have budged a tiny bit in recent months, they’re still way up since the onset of the Covid-19 pandemic. Data from mid-Q2 showed the average transaction price for a new vehicle was $47,433.
The unwillingness of manufacturers and dealers to lower prices and associated costs, even though plenty of brands are seeing double-digit sales drops, seems absolutely ludicrous for consumer advocate Clark Howard.
In a recent TikTok post that’s amassed nearly 250,000 views, Howard (@ask_clark) tears into the carmakers who are essentially playing chicken with the buying public to see how far their sales can fall before they start sticker slashing on prices.
Expert says the car market undergoing ‘huge’ change
“Cars piling up on dealer lots. Dodge cutting prices on Jeeps. Ram dealers stuck with inventory of Ram pickup trucks. Time that vehicles are sitting is in months now where it used to be measured in days. And now if you are interested in a new vehicle, pickup truck, SUV, car, whatever, the dealers are having to beg you, the manufacturers beg you with rebates, special financing and all the rest. It is a huge change in the marketplace.”
Howard strikes us as a cross between Dave Ramsey (the eternally disappointed-in-you Boomer dad of financial gurus) and Matthew Lesko, he of the circus-colored suits adorned with dollar signs or, for some reason, question marks.
On his website, Howard offers a free five-step tutorial on how to buy a new car without getting suckered in the process. He’d no doubt love for everyone to pay the guide a visit, and in the process click on one of the MANY affiliate links he has for a variety of financial services, insurance companies, etc.
Feel welcome to do that, of course, but here’s a handy Cliff’s Notes version.
- Get pre-qualified for a loan. Howard advises using a bank or credit union lender to avoid the often higher interest rates of dealer-arranged financing or loans offered from the manufacturers themselves. Knowing in advance how much you can spend gives you a better bargaining position.
- Choose the car you want. The idea here is to research all comparable makes and models, evaluate safety and reliability and avoid being wow-ed by something bright, shiny, and unfamiliar. This also helps with knowing ahead of time what the insurance coverage will add to your monthly payout.
- Get price quotes. Looking up the going rates through Edmunds and J.D. Power for selected models in your area will keep you from unknowingly getting price gouged.
- Test drive the car. Howard says to rent the model in question for up to two days to make sure it feels comfortable, and still performs well with lots of harder miles on it. This is a better move than the twice-around-the-block drive you’ll get with the sales manager riding shotgun.
- Close the deal. With the early loan qualification and comparison pricing done, the price should be pretty much agreed upon without a lot of haggling. Howard says to make sure the purchase agreement reflects all of the terms you’ve negotiated, either in person or over the phone.
Commenters on Howard’s clip were pretty unanimously on his side, expressing frustration and outrage over the price of modern vehicles.
“If they can’t sell new cars for less than $30,000 they deserve to go out of business,” one of them said.
A coming sales slump could be looing, according to another: “They need to bring the prices down. No one’s paying these ridiculous prices. They’re just holding onto their old cars.”
@ask_clark With so much inventory on the market, now is the perfect time to find amazing deals at your local dealers. Your wallet will thank you! Remember to do your research online before stepping onto the lot to ensure you get the best price possible. 🚗💸 #DealHunt #InventoryOverflow #SaveBig #CarDeals #ShopSmart #AutoSavings #OnlineResearch #SmartShopping #WalletFriendly #DriveForLess ♬ original sound – Ask_Clark
And another said nearly $20,000 would need to come off the average price to lure them back onto a new car lot, “the prices have to come down to $25,000 or they won’t sell.”
The Daily Dot reached out to Howard and Stellantis via email.
