Market in Chaos: When to Buy?

tidester

With automotive bail outs, bankruptcies, government takeovers and dealership closings it is difficult to decide whether or when to buy. Should you buy now or wait for possible price reductions as inventories pile up with dealership closings? Will used car prices be affected?

Let's share ideas and strategies here and try to make some sense of the turmoil.

tidester, host
SUVs and Smart Shopper

euphonium

Tell the dealer what you are willing to pay for the vehicle you want.

All things considered, offer what the car would sell for used in two years.

Don't let the dealer make you feel sorry or obligated for/to him.

Remember many dealers still have 08's that are brand new so offer even less.

If you don't take advantage of the buyers market - who will?

volvomax

The answer is really simple, buy a car when you need one.

Looking ahead, I don't see a lot more price reductions or incentives, except for the DOA brands. Pontiac, Hummer, Saturn.
With the GM and Chrysler factories closed during their BK there aren't any more cars being pumped into inventories.
For the other automakers, they have been dealing with slipping sales for a year now. They have all adjusted production downward.
Credit continues to be the biggest issue. Banks are tightening up on how much they lend and to whom.

Used car wholesale prices have been going up on certain model segments that were previously depressed, such as SUV's and sports cars. Fewer new car sales and fewer short term leases will mean shortages of late model low mile cars in the next couple of years. UC buyers may have to look at older models since there won't be so many 2-3yr old cars on the market.

cu503

a used convertable. I am thinking November? as dealers want to move?. Or is it better say Mid Jan/ Feb when NO ONE is looking (or are they??) at them?
As a dealer is there a time they dump convertables, and say stock up on 4x4?
Thanks

volvomax

Depends on the brand and your location.
We sell C70's year round here in AZ.
Also, the dealer may not have the car you want if it is a seasonal car.

cu503

I am in NE, and thought it was going to be this spring, but looks like next spring, thinking a used 2008 or 009, they seem about the same and well sorted out , no bad news opn the roof/ car as far as I can see.
Thanks, I love your posts and insight into the industry.

volvomax

Your welcome!

andys120

The answer is really simple, buy a car when you need one.

I disagree, Max. Hardly anyone "needs" a new car given that you could make do with used iron, cabs and/or public transportation.

If savings now were so large that you could pick up a real bargain compared to what a car might cost in a couple of years this might be a great time to trade in a car that is till serviceable for a good deal on a brand new one or perhaps a really cherry CPO.

For example my MIL's 2000 Buick is still serviceable but aging rapidly and she can easily afford a new mount. As her primary driver (she's 92) I think she ought to look into something newer but as you know a bench seat Buick LeSabre was obsolete the day she bought it.

I wonder if she'd like a caddy or a Volvo better. :P

volvomax

I disagree, Max. Hardly anyone "needs" a new car given that you could make do with used iron, cabs and/or public transportation.

Unless you live in Manhatten, cabs and public transport are hardly efective for most people.
There are good economic reasons to buy a new car over a used one. Warranty, longevity, better safety and technology.
In your example, replacing a 10 yr old car with a new one is a good idea. You probably "need" a new car. Someone who doesn't need a new car would be someone who bought a car a year or two ago and just doesn't like it, is upside down, and wants to trade. Too many people go for the "deal" rather than the substance of the car.

micosilver

The answer is really simple, buy a car when you need one.

I totally agree.
You need one if:
Your current car is aging
Your current car is losing its market value fast
Your lease is up
Your current car doesn't do the job
You don't have a car

At any given time, no matter what economy is like - ther a deals on slow selling cars, and bestselllers will not have deals.
For example, where I work - you can always get a deal on an Audi Q7 - before the recession, during and after. On another hand - Audi Q5 is hard to get, and there are no discounts. People want to buy it, but compalin that there are no incentives, like on Mercedes GLK, and we always say - there are no incentives because you are here tryign to buy a Q5, not at a Benz dealer, trying to buy a GLK.

volvomax

You are 100% right. There are always deals out there,and the good cars rarely have any deals at all.

andys120

the good cars rarely have any deals at all.

Rats no $30,000 new Porsches.

andys120

until your old ride falls apart. There really isn't much chance to shop for a good deal if you have to have a car right away and your trade-in has a busted gearbox , been there, done that and it sucked.

carstryke

i bought my used 05 impala 3 years ago($20,000 canadian)and still have roughly 2 years on my loan($9,100 canadian) and i was contemplating a new vehicle purchase. Is this a bad idea? I mean im not overjoyed with my current vehicle but it hasnt let me down either(sides the brake rotors ><) , the main reason i want a new one because deals have never been better,the fiance rates, and rebates ect ect. Would it be smarter just to wait the 2 years or buy the perfect vehicle for my needs?

tidester

Rats no $30,000 new Porsches.

No, but your old one might get you $4,500 in the cash for clunkers program! :P

tidester, host
SUVs and Smart Shopper

boomchek

Depending on the model, it's worth about 5-8k, assuming it has 80k on it. This is according to Canadian Black Book Value.

If you trade it you'll be upside down. What do you want to trade it in for?

Also in order to take advantage of the super low interest rates, you have to have very good credit.

dtownfb

What's wrong with buying a 2-3 year old car? So many cars can go beyond 100k miles with regular maintenance. Plus you save on the depreciation.

carstryke

I wanted to trade it in for a midsize suv or a pickup or maybe even a g8 just cuz of the incentives, i admit i dont know much on how these deals work but they were adverstising crew cab silverados for 27k and equinox's for 20k (prolley 09 clearouts) plus the $1000 gm loyalty is kinda a little incentive. Basically just tired of having a basic boring vehicle with little utility (big trunk but still run out of space on trips) and was hoping to upgrade into something...not so basic that i would actually enjoy and would suit my needs a little better. As for the credit i assume i have good credit but again its another area im unfamilar with . I mean even though the car would be a upside down trade in, wouldnt you get it back and then some with the current offers?

(this is all in canadian dollars btw)

boomchek

Yes the deals are there and if you feel you must get something else then by all means do it.

The amount that you're upside down will be tacked onto the new purchase loan.

You should familiarze yourself with your credit so you know where you stand by going to Equifax (online) and buying your report for about $20. Yuo can learn about your score and what you should do to improve it. The better your credit report and the score then the better rates and deals you'd qualify for.