Unearthing Terrific Deals On Luxury Cars

Unearthing Terrific Deals On Luxury Cars

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Cadillac STSThe recent drop in car sales for the month of January 2008 (4.3% according to Autodata Corp. which tracks auto sales) wasn’t a surprise to industry experts. Mostly everyone is expecting that U.S. car sales would be off for the year, as much as 500,000 units perhaps even more.

Hit hardest are some of the luxury brands including BMW which saw its sales drop a whopping 22.2% over the same period a year ago. The reason for the drop? There may be several including:

  • Many people who would consider purchasing a luxury car are not normally luxury brand buyers. When the economy is good, they’ll opt for a premium brand. When the economy is flat or bad, they’ll either wait out the downturn or choose a less costly model. The Lincoln MKZ sedan is a nice car, but a Mercury Milan is essentially the same vehicle priced thousands of dollars less than the Lincoln; both sedans are sold in the same showroom.
  • Most luxury brands tend to be top heavy with fuel inefficient vehicles. People understand that today’s $3.00 per gallon for regular gasoline may jump to $3.50 or $4.00 by this summer. The rich don’t worry about surging fuel prices, but not everyone who opts for a luxury brand is wealthy. Besides, environmental concerns are starting to weigh in — who wants to be accused of driving a hog?
  • The luxury market is saturated. Just about everyone is selling luxury cars with even Hyundai poised to start selling its ultra-luxury Genesis sedan this summer. Mercedes sales were up for the month of January 2008, suggesting that BMW’s loss could be attributed, in part, to competition from its German rival.

All of this spells good news for the person who is shopping for a new car and who thinks that discounts for luxury models is a rarity. This may have held true as recently as 2006, but for 2008 buyers could save thousands of dollars off of the sticker price. However, you’ll have to do your homework as many of the special buys are not being advertised. Instead, the manufacturers are giving incentives to automotive dealers who may or may not share these discounts with you. Fortunately, if you take the time to do some research you could save an extra three to six thousand dollars off of the sticker price. Here is how you can arm yourself:

  • Edmunds — Edmunds.com is one of the most respected sites on the internet when it comes to new car reviews and pricing information. Edmunds will list the MSRP of a car in your area and then list the invoice price for the vehicle. In most cases, you can negotiate the price of your new car down to an amount closer to the invoice even lower if manufacturer incentives are uncovered.
  • Fighting Chance — For a fee, you can get all of the current information about the car you want by learning what the current pricing is for the car, incentives offered, holdbacks (secret incentives from manufacturer to dealer), as well as leasing advice, vehicle safety analysis, buying an extended warranty, and more.

The difference for most consumers is in the area of holdbacks, something that more than 90% of the vehicles sold today have but you aren’t supposed to know about. Get a portion or all of your share of the holdback and you’ll shave hundreds of dollars off of the invoice price.

Finally, if you get your lowest price and still need automotive financing, get pre-qualified for an auto loan in advance to secure your lowest rate. Negotiating on financing should never be contingent on the price of your car — you’ll want to get the best price first and handle financing separately.

Photo courtesy/copyright General Motors. Pictured: 2008 Cadillac STS

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Categories: Consumer Financing

Comments

  1. Paul Richards
    Paul Richards 13 February, 2008, 14:08

    A correction needs to be made. And made very quickly as it is highly unfair. The Lincoln MKS is NOT essentially the same car as the Mercury Milan. What you probably meant to say was the Lincoln MKZ is. The MKS isn’t even out yet. And it will certainly not be the same car. Please make this correction.

  2. MattKeegan
    MattKeegan Author 13 February, 2008, 14:58

    Good catch, Paul. Thank you too. I should have caught that — Lincoln has perhaps the most confusing alphabet model arrangement out there. Sorry for the confusion.

    BTW, the MKS is a nice car. I saw it at the Detroit Auto Show last month.

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