A new car under sticker? It’s possible – but not by much
After more than a year of extremely high car prices, the cost of a new car has fallen below the list price. Discounts are not significant: the average discount from list price was $15.
“Admittedly, not a lot of money,” says Ivan Drury, chief information officer at Edmunds, who provided the data. “So we’re on track for some level of ‘normalcy’ but not there yet.”
Additionally, “normal” now equates to an average transaction price for a new car of $47,681, according to Edmunds. And rising interest rates – to 6.6% for new cars – have driven the average monthly payment for a new car at $718 in November.
On the used car side, it’s not much better. Used car interest rates have risen to 10.2%, bringing the monthly payment to $565 on a 70-month loan. And leases were going for $583 a month with interest rates — called the “monetary factor” in a lease — at 5.8%.
OK, so now is not the best time to buy a car. But some people need wheels now and want value for money. Aren’t they lucky?
What sells for a sticker or less?
Car search engine site iSeeCars has compiled a list of the best new car deals by comparing the actual sale price with the manufacturer’s suggested retail price, or MSRP.
Only two cars sold at the list price, the 2022 Infiniti QX80, at $80,529, and the 2022 Chevrolet Silverado 1500, at a more acceptable price of $50,095. The cheapest vehicle on iSeeCars best deals list is the 2022 Honda Pilot, which retails for $44,696, just $1,399 on the window sticker.
Edmunds data shows large luxury cars were discounted by up to $3,000. Dealers also took about $1,000 off the list price for full-size trucks and luxury subcompact SUVs.
Edmunds lists the most discounted models under $50,000:
Mitsubishi Mirage subcompact car
Mercedes-Benz GLB-Class SUV
What’s hot and what’s not
If possible, buyers should postpone purchasing popular cars as they command higher prices. Edmunds data showed large luxury SUVs marked up the most, an average of $2,863 over MSRP. Minivans fetched $848 above the sticker.
Most of the lower priced vehicles on the market have at least one additional dealer markup. The cheapest segment of the market, subcompact cars, which have an average MSRP of $24,148, are still marked up by around $450. Subcompact SUVs cost $543 above the sticker.
If you are looking for a bargain
To find a good deal in today’s market, “it’s important to research cars in a way that most other buyers don’t,” says Mark Holthoff, editor at Carvana. “Demand drives prices up, so bargains tend to be where most people don’t look.”
Here are some ways experts recommend bargain hunting:
Look at the big picture. Remember that getting a good deal is a combination of purchase price, finance rates and, in some cases, trade-in price, advises Holthoff.
Take discount financing from a car manufacturer if you can. Buy a more expensive car that’s likely to be discounted and finance it with a low- or no-interest loan through the manufacturer. In the long run, you save thousands of dollars in interest payments, says Drury.
Buy older cars. The 2 to 3 year old models have higher prices. So look instead to well-maintained, low-mileage vehicles around 7 years old, says Holthoff. Some 10-12 year old cars still offer great utility and are almost fully written off.
Consider lesser known brands. Brands such as Honda and Toyota command high prices on the used car market because of their strong reputation for reliability. But Holthoff says other automakers, such as Mazda, Kia and Hyundai, have been producing excellent models for years and are generally much cheaper.
Be flexible. Look for at least three different models from different manufacturers. Be prepared to accept your second color and feature choice.
Is there a good EV deal?
The words “good deal” and “electric cars” are not often found in the same sentence. With high gasoline prices and growing environmental concerns, electric vehicles, or EVs, are rare and can be more expensive than gasoline-powered cars.
For example, the cheapest 2023 gasoline vehicle in the US is the Nissan Versa at $15,730 plus destination. The cheapest electric vehicle is the Chevrolet Bolt at $25,600 plus destination.
But once you look at the big picture and include fuel savings, incentives and reduced maintenance costs, a EV can be a good deal, says Brent Gruber, executive director of JD Power. Once these factors are taken into account, “I think electric vehicles in general present a good deal.”