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Thursday 17 August 2017
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Buying Your Dream Car: When Patience Saves You Money

Buying Your Dream Car: When Patience Saves You Money

I had a caller on last Saturday’s Car Pro Radio Show that wanted to buy a 2015 Ford Mustang GT.

He admitted that on his budget, he would have to get one below dealer invoice to be able to afford it. I posed the question to him back: “why would any dealer do that when there are people willing to pay MSRP for the car?”

My advice was to wait. Things change, cars that are hot today may not be hot down the road. There is a certain amount of the population that wants to make a statement by having one of the first new, popular cars on the market, and they are willing to pay top dollar for it.

The truth is, when a vehicle is introduced and creates a stir, the open market determines the price. Some car dealers charge over MSRP (sticker price) and some dealers have a policy of never charging over the window sticker.

I hear from people who are incensed when a dealer charges more than sticker price. It is a tough call for me. Dealers do not get many opportunities to sell a vehicle for more than sticker price, and the window of opportunity closes quickly.

It is important to note that MSRP stands for Manufacturer’s SUGGESTED Retail Price. For those people who are angry when a dealer wants more than MSRP, they must realize that 99% of the transactions happen at well under MSRP. Bottom line, you can’t have it both ways. If you want a much-desired car early on, you’ll pay a premium. It is called supply and demand.

Seldom does a car come out, is in short supply, and stay that way. The 2014 Corvette was a good example. Dealers were able to charge over MSRP (if they chose to) for most of the 2014 model year. People were lined up for the new C7, and it was a seller’s market.

Near the end of the model year, however, I started to see dealers discounting the cars, not a lot, but as much as $2000. This is a common situation. When the people who truly want a car have gotten one, prices start to fall. It is not unlike the seats to a sporting event, there is always someone out there willing to pay way over the stated price to be able to participate. Think of the 2015 Super Bowl, word was $500 seats were bringing $9000 minimum in the open market.

If a new car comes out you just have to have, be prepared that the price is going to be high. Usually, however, those prices will come down.

We are seeing the new Ford F150 all-aluminum truck bringing a premium as I write this in early February 2015. However, I predict that by summer’s end, there will be an abundance of them, and they will be deeply discounted and have large factory rebates. It’s a great truck, but people wanting the latest and greatest edition of the #1 selling vehicle in America are holding prices up.

You can get the vehicle of your dreams, but sometimes you have to be patient to get a deal on one.

Photo Credit: Ford