Why You Should Never Buy a Newly Introduced Model
People tend to get most excited when there's a newly redesigned model coming out and the anticipation has been building. Car companies completely redesign their vehicles every 5 or 6 years and launch a big advertising campaign to build up excitement and awareness starting a few months prior.
When the newly redesigned vehicle first hits the showroom, there are only a limited amount available and everyone has been waiting and wanting them. The demand is way bigger than the available supply.
Whenever demand outweighs supply, prices increase. Since everyone wants one but can't have one, you will have to pay extra for the privilege of actually owning one. This imbalance in supply and demand typically lasts about 3 to 6 months, during which dealers are partying like its 1999!
They can easily sell all their inventory at MSRP and sometimes even higher. It is not unheard of for a dealer to add an additional markup beyond MSRP, sometimes by up to $5,000.
This is insane, and anyone who is buying at this time is making a huge mistake. 6 months down the road, it's likely you'll be able to buy the same car at just a few hundred dollars above invoice price.
However, for some vehicles, this initial excitement lasts a lot longer. For example, Audi has had a hard time keeping up with demand on their newly redesigned vehicles for some time now. Buyers have been paying, and will continue to pay higher prices until supply catches up.
To figure out when it's a good time to finally buy, you will need to keep a close eye on the market. You'll want to call a couple of high volume dealers in your area and ask how their inventory looks for that particular model. Make a note of how many they have in stock. As you see their inventory increase over time from just a couple to many in stock, you can than begin to seriously consider purchasing one.
Just following this one rule of car buying can save you up to $5,000. If you have to wait 9 months, that's over $550 in savings for each month you wait. Besides saving money, another advantage to waiting is that you'll get a car that has fewer problems.
Whenever a new model is redesigned, there are always some quality issues that need to be ironed out at the production facility. If you buy one of the first cars that roll off the assembly line, you may be spending more time in the service department than actually driving it.
My Recommendation for Car ShoppersTrueCar No-Haggle, Edmunds Price Promise and 1-800 Car Show are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
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About: Gregg Fidan
Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.