Is The Sticker Price for a Car Now What You're Expected to Pay?

I remember years ago when you'd go in looking for a car they'd kiss your butt. Especially buying new.

However now because demand is so high it's like they don't even care. They don't call me back and I got told if I don't pay the full price there's 20 people in queue that will.

It feels weird to pay full price for a car. Are all dealers like this right now?
How much of a deal would you expect to be happy? 1k off the price and some mats?

Comments

  • +6

    If you're looking at common/popular cars, then yes, what you've experienced is the norm now.

    If you really must experience the feeling of a dealer "kissng your butt", then go for the new cars that no-one else wants.

    • +12

      Unless your car has been in a big smash and written off, just keep it for another 12-24 months. Why do you "NEED" a brand new car?

      • +2

        The used car prices are 40-50% dearer.

  • +3

    Basically, yes. Factory staffing due to covid, slower production and computer chip shortages among other things have stalled out car manufacturing. We've been conditioned to want the latest, greatest and newest of everything, so demand is high.

    People not taking their usual bogan Bali holidays or giggity trips to Thailand, early release of super, record low interest rates and government welfare payments means that there is a lot more disposable income for people to play with. Lots of cheap money and buyers with reduced production and stock means that it's a sellers market.

  • +2

    did Toyota not just announce that they were lowering production by 40% due to supply issues ? https://www.bbc.com/news/business-58266794 ( they are just one of many that cut production)

    i am not sure you can really negotiate under those conditions, you might even see prices above RRP

    • Family friend of ours just made something like $40k by selling their spot in line for the new 300 series LandCruiser… They have a near new top of the line 200 series and were offered almost what they paid for it 3 or so years ago.

      My neighbour had an old 80 series LandCruiser and sold it for $2,000 more than what he paid for it…. 10 years ago!!

      • +1

        My boss sold his 3 y.o. 200 series Sahara for $10k more than he paid for it, with 60k km.

        • My firm sold their 3yo Polos for what they bought them for…

    • That was just for one month, they intended to catch up in other months so the annual production wasnt affected

  • I would be surprised if you can get it cheaper then marked. Would have to be a car no one else is buying I guess.

    I use a lot of commercial vans and wait times I have been told are up to 8-10 months, maybe longer. That's a bit outdated, I was told this in May.

    It's unfortunately a bad time to be buying vehicles from my experience.

  • Well, everyone said they were looking forward to fixed price sales coming in…

    It's just a change in mentality really. It's been a negotiable commodity for so long, it became a habit.

    • +1

      Who said that?

      • +2

        Car salespeople.

    • How would fixed price sales affect car salespeople? Are they going to go the way of the dinosaurs?

      • Yup

        You'll have cute smiling 20-somethings presenting the car, noting down what you want and giving you the total cost

        • Flesh and blood 20-somethings or virtual avatars? All of the above can just as easily be done online. We'll probably see a shift from physical dealerships to digital dealerships to virtual car showrooms.

          Now, I'm feeling weirdly nostalgic about car salespeople. Some of them actually know their stuff :(

          • +1

            @Geekless Belle: People still want to touch and feel the car, size it up, feel the power etc. There'll still need to be some in-person aspect for a while

            • @spackbace: I take it that you work in the industry. Will you be affected? Do you have a backup plan?

              • @Geekless Belle: I'm old enough that I can have another career. What, I haven't worked out yet

                • +1

                  @spackbace:

                  I'm old enough

                  So, you're not a "cute, smiling 20—something"? What a shame 😋

                  An ex-boyfriend of mine was a carsalesman. He is now working as a sales manager for a shipping company. He appears to be thriving.
                  If you're good at selling cars, you'll probably be good at selling anything you set your mind to :)

  • Only wiggle room on new car prices is a bump up on the trade in

  • Currently Supply < Demand.

    If you were a dealer, what would you do?

    Crazy times we live in.

  • +3

    This is a paradigm shift which should be positive if it doesn't get abused by dealers (after normality returns).

    A $35,000 dealer price car is no longer advertised as $39,000 knowing you'll negotiate down to $36,000 + 'free' mats where they still win.

    It should, in theory, simply have a $35,000 sticker price. Take it or leave it, like a yoghurt pot in Coles.

    Dealers absolutely need to make money to survive but this way it's far more transparent.

    The issue is if they simply state it's $39,000 sticker price from the get-go and take it or leave it at that…

  • +1

    It'll depend on the brand/model and availability. I know I didn't.

    I can highly recommend autoExpert, they saved me just under $5K without me needing to do any haggling. Just work out what you are after and fill in the online form, at that point John's service will organise a broker who will contact a bunch of dealers and start haggling (playing them all off against each other) on your behalf.

    • +2

      I got 6 quotes for a new car purchase - he was the 5th cheapest

      • Might be worth posting where you got a better option (assuming it was a broker and not direct).

        I didn't really have time to do the legwork myself, the broker was calling dealers and incrementally lowering the price for a good week. No way I'd bother doing that myself. Cheapest he found was some dealer in the backwoods of QLD, which we managed to get a Sydney dealer to match for my final vehicle.

        Definitely easiest if you don't want any changes to the vehicle (though not a showstopper). But this is OzBargain, surely you can add your own floormats, etc cheaper than a dealer.

        • When did you use the service? In the last 12-18 months?

          I suspect most brokers don’t really work that hard. They’d send out an email to their favourite dealers with what they want to order, pick the lowest price and forward it to the buyer. They wouldn’t spend ‘weeks following up dealers and playing them against each other’

          • @Euphemistic: One year ago last week. I was really impressed by them going the extra mile.

            • @Abaddon: So during covid I guess. Did you have to wait long for your car?

              • @Euphemistic: About a month. The focus was on dealers who had stock (I had a tight deadline).

                Everything went through the broker, apart from a couple of emails to setup rego with the dealer. Then the car was delivered to my door.

  • Same with houses. Last year when I was looking, my in-laws told me to offer 20% below asking to eventually settle on 10% below asking. They couldn't believe houses were selling for 30-40% over asking.

    • If there was a CamelCamelCamel for houses then people will think twice. You know those who do no research and jump into investments usually end up losing their money. Apparently just because there is 21m of it, then Bitcoin is digital gold. If you call it Gold and never looked at the gold charts then you deserve to lose all your money.

    • +1

      I'd say your in-laws haven't bought a house in more than a generation. Since at least the early 2000's, at least that's when I started in the market, the general rule of thumb has been the seller is looking for at least 10% above the asking - hence the '+' after the price.

  • Depends on what you're buying. A bog standard Camry (basically fleet edition) they'd be happy to knock $1k or $2k off and they can probably get you one within the week. If you want a RAV4 Cruiser then you are out of luck.

  • At the moment, sticker price! … or near enough.
    Car market is like housing, BS at the moment.
    Limited stock of new cars (generally speaking) out there from what I understand at present.

    • You should still be able to get fleet pricing or a number of extras. They are still competing with the dealer down the road.

      • Agree - but if you customise the car, be prepared to wait longer than usual.

  • Depends on the car; if it is a popular vehicle then good luck and please get in line.

    I have seen some European cars, 1-2 years old that might be over $100k when new, but asking $80k driveaway with very low-kms. I would get one but since Sydney's lockdown will be ongoing, am not going to buy a car and let it depreciate in the driveway.

  • Maybe take a punt on a vehicle that is always high in demand - agree to purchase one and pay the deposit and then close to the delivery date sell you place in the delivery queue for a premium.

  • +2

    The new way of buying cars is to walk in with a case full of cash and offer 10%above RRP if you want a dealer kissing your posterior. Negotiate up from there and they’ll love you long time.

    I’m sure that sometime in history it was exactly the same. You pay sticker price or you didn’t get one. We’ve just come from a long period of dealers trying to make you think you’ve got a bargain by knocking a nice chunk off the sticker price.

    It’s a car. You gotta pay what you gotta pay if you want to drive away.

    • +2

      Yeah right, a case full of cash? Most dealers would kick you up the posterior, giving them extra paperwork and risk with handling cash.

  • +2

    I'd rather have fixed concrete prices then deal with car sales people and dealerships.

  • There's no bargains at all in either the used or new market at the moment. Might as well buy a Tesla Model 3 for <$60k once the rebates come in if you are that desperate. I could never justify a brand new ICE purchase this late in the game and with prices the way they are. Not even used Italian and French cars are cheap..

  • No dealer has ever sold a car at a price he didn't want to - except the guy in Oceans 11 when Bernie Mac was squeezing his hand. Customers have always done whatever they think gives them the upper hand though, eg go at the end of the month, tell them it's cheaper down the road, I'll pay cash now, one shot deal, and so on. With a well published shortage of supply, the dealers have the upper hand and only the desperate or foolish with money (subjective, obviously) would be buying used/new cars in this climate.

  • +1

    Thanks for all the replies!

    I am going to wait until this all settles down I think. I know salesmen probably dont like us haggling them down, but I would actually rather if they just put their lowest price on the sticker, go in pay it, and drive out with the new car. I dont haggle coles for food, but they dont mark their food up so I have to.

    The car I want is next years WRX / STI - used ones from 2015 with 80,000ks are literally at 2021 new prices, so I am for sure waiting for this to die down.
    This happened with the graphics card I bought for $2400, it was legit selling for over 4k. Madness.

    • I know salesmen probably dont like us haggling them down

      Is that right?

      but I would actually rather if they just put their lowest price on the sticker, go in pay it, and drive out with the new car.

      It's supply and demand. The dealership is a business and their aim is to sell items for a price as high as the market can tolerate. Why would they sell something for less if they know they can sell it more? They don't care if you're not willing to pay that much because someone else will.

    • +1

      but I would actually rather if they just put their lowest price on the sticker, go in pay it, and drive out

      You are always welcome to go and pay the sticker price without haggling. There’s just a big history of having to ‘get a great deal’ and feeling good about negotiating down the price.

    • I am going to wait until this all settles down I think.

      You realise car prices aren't going down, right?

      I've said it before and I'll say it again… you'll wait, the car might go up $3,000, and you'll then negotiate $2,000 off… Net result, the wait cost you money.

      No brand has seen a price reduction on their cars over the last 18 months

  • They do not make money on NEW CARS.

    The money is in financing, and after sales service.

    Are you sure they kiss your arse - or kick it? They are masters of MM, mind manipulation. You have an 80% chance of escaping, if you are in the car yard area, and a mere 35% if you follow the salesman into their "den".

    Ever wonder why there is no posters on the wall? Or the guy keeps running back to his "boss"? These are all part of Mind Manipulation.

    Are you sure they kissed you?

    • Would I be able to get a better deal if I were to say ill do it on financing and just pay it all really fast, so long as I don't get a penalty for paying it too quick?

      I wouldn't tell them I'm going to pay it off fast.

      • Read the fine print. They are only likely to give a better deal on their in house finance package because they make money from that. Their finance will likely not let you pay off super early with no penalty.

  • +1

    Depending on your financial/driving situation, I'd look into leasing as an option. It can't hurt to at least get a quote. With fleet discounts being well below what I could negotiate myself, it worked out well for a me 2 years ago.

  • -1

    You can literally buy a 12 month old car for so much less than brand new and you're getting the same car basically

    • +4

      You literally can't buy many 1yo cars for less than a new one in the current market…

      But please, open a new thread then close it once comments don't agree with your view 😂

      • +3

        Exactly I've seen used cars that are 5 years old going for new 2021 prices. Or like 3k less. May as well go new.

    • +2

      Not anymore, maybe 2-3 years ago.

      If you can find a 2nd hand car, they're well overpriced.

      • +2

        i've seen demo and used cards that are the same price as brand new, only difference being they are available right now

        • +1

          I actually do remember seeing demos when I was buying at higher prices than new. I thought it was extras/additions and no, it was just the cars location.

  • Honda - 100% the case — up until a few months ago they had a conventional sales negotiated price arrangement, but now ditched most of their Australian dealerships and only offer fixed-priced sales. I expect they will still have seasonal price reductions as advertised, but any negotiation in the price is only with trade-ins price or aftermarket addons like alloy wheels, etc.

    This is supposedly partly based on Tesla's approach to sales, so I imagine other companies will follow this too in the near future.

    P.S. Don't expect second-hand cars are a better option, since the 2nd hand car market is unbelievably overpriced at the moment.

    • The 2nd hand market is likely to stay high for a long while to come too. It reflects what the new supply rates are, and that’s not going to suddenly increase so prices drop in the near future.

  • Well for this car I got it for $37500 DA with Metallic paint and free genuine floor matts and free tint, all together its around the $40900 mark

    https://www.renault.com.au/vehicles/suv/koleos/koleos

    So I paid around $3400 less.

    But its a renault, not everyone likes it, however having said that it runs on 91 and its really is just an Xtrail underneath. Very good car so far

    • +1

      Demand not there, discount available.

  • How do you find out if their finance has a early payout penalty? If it doesnt id get a better deal by not telling them I have cash, and paying it off fast wouldnt I

    • +1

      Just say you are flexible with payments. Never say it is cash or finance.

      • Will do. The car is around 45k, so I just pretend I have like 5k saved ?
        Can I get in any kind of breach of contract if I use finance to get them down, then pay it off ridiculously fast?

        • I don't quite understand what your plan is?

          You have the actual cash to buy a car but you want to finance it because you think it will be cheaper, is it right?

          When you apply for finance ask for unlimited repayments and no early repayment fee.

          BTW what car are you buying?

          • @Lenin: I was just wondering if they'd give a better deal if I went with finance so they think I'm buying the whole thing on finance. Then pay it all off asap

            • @gammatsunami: You’ll need to read the fine print. Tell them you are considering finance but won’t to review the contract before signing.

  • You could always use a broker or if you are a RACQ (or equivalent for your state) member they have a service that negotiates for you at no cost.

    • I have heard of these a bunch but dont understand them, I will look into it. How much does a broker charge? If the broker finds the best price somewhere I cant get to cause of lockdown, I wonder if theyd deliver

      • Brokers don't charge you (the customer) anything upfront, they negotiate the cheapest price for you and their fee would be included in that negotiation. Normally they could have the car delivered but due to lockdown in your state I don't think it would be an essential service. You could still get the deal through the broker for deliver or collection once lockdown is lifted.

        • Thanks for that, I will have to look up how to get one

          • @gammatsunami: Don’t expect miracles from a broker. They are dealing in the same market as cash buyers. Demand is high, so discounts are slim and the broker will need to add his fee onto the best price the dealer will give them. End result might not be a significant saving.

            Brokers can help when the market is slow. They are able to worn with dealers from far and wide and might just find you some excess stock a dealer has. Pretty unlikely when many cars are 6months wait time.

  • I guess if we move to fixed price car sales we’ll also move to endless ‘biggest sale ever’ ‘never to be repeated prices’ a-la Harvey bloody Norman ads.

    We’ve been conditioned that RRPis for suckers. Wether you have to negotiate lower or the regularly drop the price for sales is just tactics to make us feel good when spending our hard earned.

  • Has anyone get any tips for dealing with dealerships during covid? They have literally told me they don't care if I buy since someone else will.

    I can't get them to return my calls. I can't go see them in person which I think would make them take me more serious.

    Am I better off waiting for all this to be over?

  • Yeah, I suspect so.

    Went and looked at an i30N the dealer had no interest in bargaining. Didn't seem like they wanted to knock a cent off it. Were completely happy for me to walk away from the deal.

    If you find something a bit odd that's not moving quickly you might have better luck. Looked at a GR Yaris I've had a few calls back as the dealer hasn't been able to move it, likely as people buying new are probably after the rallye, and at 55k D/A it's not great value anymore. They'd probably wriggle down a bit on that.

    You have a better chance of negotiating if you're financing with them, but this will almost always end up being a worse deal (even if you immediately pay it out) as they will try to sneak in $1500+ worth of establishment fees and other nonsense. If you need to finance, finance elsewhere.

    tl;dr probably not much room to negotiate, unless it's some piece of shit MG thing they can't give away

    • I cant even get them to bother call me. I wonder if theyll regret how they treat us once this covid stuff is over, and supply returns to normal.
      My friend bought a new isuzu, 65k cash. He bought 4k of extras, and had to pay full price for everything.

      My original plan was buy now, go 50% cash 50 % finance. Thinking now ill try wait them out, and have way more cash.

      Looking up dealer guides is useless, because precovid dealerships seem much different now. Like you said they dont care if you walk away, whereas thats what would get them to come around.

      I also dont think they respect you as much when dealing over the phone, Id rather go in person since it makes me look more serious.

      • They don't respect you in person either- don't worry about that.

        • Fair enough, guess I will wait a year or two see what happens

          • @gammatsunami: I do hope it swings back the other way, and it probably will. Lots of people have extended themselves quite far into very discretionary purchases, rather than saving, paying down their mortgage, or investing into assets that aren't mega risky (bitcoin). There's a few fun cars new or near new I'd like to own sometime in the near future, and I think they'll certainly be more affordable in 1-3 years

          • @gammatsunami: The thing is, prices will only go up, not down (god I've lost count of the number of times I've said that)

            If you're not prepared to pay sticker price now, expect to pay more in 1-2 years even after negotiation.

            Given many cars have 6+ month wait times, this shit aint gonna be sorted in only a year.

            If the car is what you want, pay the price and order it now. Don't wait until you can negotiate a small amount off, it's just not worth it.

            • @spackbace: Surely once supply catches up with chips itll settle down a bit

              • @gammatsunami: Toyota's recent issue was wiring looms

                Trust me, this is gonna be more than a year

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