Advertisement
Buying & Leasing a Car

Driving a Hard Bargain on a New 2018 Car

Our tips on negotiating strategies and getting a new ride that will hold its value well.

With car sales slowing from years of record highs, carmakers are ramping up incentive: cash rebates or low-interest-rate financing. But getting the lowest price possible still requires some smart tactics.

Negotiate. Assuming you aren’t shopping for a hot model, you can probably haggle with the dealer until you get close to the “invoice” price, or what a manufacturer charges the dealer for the car. The invoice price may be as little as 1% below sticker for a popular mass-market vehicle, or as much as 6% for a luxury model.

Advertisement - Article continues below

Dealers receive bonuses and other incentives from manufacturers to hit sales targets, enabling them to sell a car at invoice or slightly above and still make a slim profit. (Be sure to negotiate the price before any rebates or other incentives are factored in.) And remember that dealers make most of their profits from service, accessories, extended warranties and sales of used vehicles—pretty much everything except the sale of new cars.

Cars that sit on dealers’ lots for months are more likely to sell at or below invoice than a coveted model in short supply. Buicks recently sat for an average 149 days, making them the second-slowest-selling cars on the market, according to Kelley Blue Book. By contrast, Audis and Subarus sell the fastest—they’re gone after just 40 days, giving dealers much less incentive to bend on the price. You’ll also save if you buy the outgoing model, once the new model hits dealers’ lots.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

Check the resale value.

Saving a few bucks up front may be less valuable than picking a car with strong resale value. Cars depreciate at an average rate of 15% a year, says Eric Lyman, vice president of industry insights at TrueCar. One positive factor if you buy a sedan, he adds, is that resale values should start to improve over the next few years as supply tapers off in the used-car market (while SUVs proliferate, potentially hurting their resale values). Resale values and other costs of ownership can be found on kbb.com.

Stripped-down models without any options (the kind you see at rental agencies) aren’t very appealing to car dealers, but it’s unlikely you’ll get much extra for a car with every option and high-tech doodad tacked on, says Karl Brauer, executive publisher of Kelley Blue Book and kbb.com. “Everyone wants air-conditioning, power windows and Bluetooth, but not necessarily a sunroof and rear heated seats,” Brauer says. Go for a Goldilocks car: a well-equipped model, not too basic and not fully loaded.

Be wary of an all-new model.

Try to buy a car one year after a full redesign or launch of an all-new model. Or buy a “mid-cycle refresh”—a car that has been revised and updated by the manufacturer about three to four years after it first came out. All-new or fully redesigned models tend to have kinks that need to be ironed out, so waiting a year is usually a good idea. And a model refresh usually includes significant improvements. In both cases, these cars should hold a bit more resale value than the outgoing model, says Brauer.

Advertisement
Advertisement

Most Popular

Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020
5 Unfortunate Estate Planning Myths You Probably Believe
estate planning

5 Unfortunate Estate Planning Myths You Probably Believe

These all-too-common misconceptions can steer your estate plans in the wrong direction right from the start. Here’s how to overcome them and tips to b…
September 17, 2020
Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
September 18, 2020

Recommended

How to Save on a Used Car
cars

How to Save on a Used Car

Kiplinger's resident car guru David Muhlbaum joins host Ryan Ermey on our Your Money's Worth podcast to offer tips on buying a used car. Also, the pai…
September 8, 2020
The Right Fit Car for Older Drivers
Buying & Leasing a Car

The Right Fit Car for Older Drivers

Anticipate how changes in lifestyle and health might affect the kind of vehicle you will need over time.
August 26, 2020
Get Your Car on the Cheap
Buying & Leasing a Car

Get Your Car on the Cheap

Want to spend less on transportation? Step 1 is a car that’s used, but not used up.
July 22, 2020
Protecting Your Car During COVID-19
cars

Protecting Your Car During COVID-19

Lack of exercise won’t make your car flabby, but problems with the battery, the fuel and even malevolent wildlife are a real possibility.
June 12, 2020