If you’ve visited a car dealership lately, you may have arrived with the hopes and dreams of a new vehicle but left with sticker shock. With the average new car sticker price sitting right around $45,000, it’s going to cost a chunk of change to purchase a new vehicle these days. To better understand the situation and what you can do about it, let’s look at how we got here.
What is Sticker Price?
Generally, this term refers to the Manufacturer’s Suggested Retail Price, or MSRP – the price tag that the manufacturer states a dealership should be able to put on a particular vehicle. In the past, it was not uncommon for new car buyers to pay under sticker price. Here’s why:
- Dealerships offered financial incentives to consumers to move more vehicles, lowering the price to meet sales quotas and to clinch the deal.
- There were plenty of new vehicles available so consumers could go from dealership to dealership, pitting one against the other to get the best deal and lowest price.
- New vehicles could sit on the lot for 50 days or more before being sold. If you offered a less-than-sticker price, the dealership was more likely to take it because that meant moving inventory.
Why Are People Paying Above Sticker Price For a New Vehicle Now?
So, what has changed? Why are consumers now choosing to pay above sticker price for a new vehicle and shell out more of their hard earned money? Basically, it all boils down to supply:
- A global chip shortage led to fewer new cars being produced in 2020 and 2021. With supply low and demand high, dealerships can get away with asking for more than the sticker price.
- With fewer new cars available, wealthy patrons are willing and able to spend more to get the vehicle make, model, and features they want.
- Since supply is so low but demand is still high, dealerships are able to move inventory very quickly – the average time between a new vehicle arriving on the lot and it being sold is now about 19 days. That means dealers no longer have to offer incentives to sell more vehicles.
How to Avoid Paying Above Sticker Price For a New Vehicle
So, what’s a person to do if they need a new car or truck and don’t want to pay above sticker price? There are basically three options:
- Keep the vehicle you currently have. It’s time to do some serious thinking and number crunching. You may find that simply keeping up with repairs and preventative maintenance can make your current vehicle last until the market calms down a little and conditions improve.
- Buy a used vehicle instead. With the shortage of new vehicles, used vehicles have been in hot demand, too. That doesn’t mean you can’t find one, however. In order to make sure you’re getting a great deal and not buying someone else’s problems, we recommend a pre-purchase inspection for peace of mind.
- Get the best deal you possibly can. If you feel you absolutely must get a new vehicle, do your homework and brush up on your bargaining skills.
- Be flexible with vehicle colors and features.
- Get quotes from several dealerships to get the most for your trade-in.
- Try to get other things included in the price like warranties or accessories.
Used Auto Sales in Tempe, AZ
If you’ve decided to not pay above sticker price for a new vehicle and have chosen to purchase a used vehicle instead, we can help! At Good Works Auto Repair, we buy and sell used vehicles, making us your one-stop-shop for vehicle sales, service and repairs in Tempe, AZ.
Our expert mechanics thoroughly inspect each vehicle before we offer it for sale. That means we have done our due diligence to identify and fix any known problems. So, you can have peace of mind and know that you’re getting a great deal. Simply give us a call or stop by the shop to learn more about our current inventory of used vehicles.
