Buying a new car is always a nerve-wracking experience; You have to choose the car carefully, you have to test it, you have to set up car insurance for it, and then comes the really aggravating part…negotiating with the car salesman. Fortunately, thanks to the market, this fall is going to see even more incentives and deals than ever. You may be able to knock a substantial chunk of change off that new car you’ve been eying.
Why? A few reasons. First, the Japanese automakers are a bit jittery. Detroit has always offered more incentives than the Japanese, mainly because Japanese automakers generally have lower prices associated with similar cars. This is especially true as production has moved onto US shores, and popularity has driven up demand. It’s harder for Detroit to compete, although as we’ll see, some of them have turned their reputations around in a big way.
But this year has been a bad one for Japanese automakers, for reasons completely out of their control. The tragic earthquake and tsunami didn’t just affect the coastline: it completely disrupted supply chains and production, as these companies focused on helping their countrymen instead of producing cars. It has even affected American cars that use Japanese parts.
The result? Fewer Japanese cars on the market, and that’s when basic economics kicks in. The Japanese cars were in high demand this year, with a limited supply, so up went the prices. Only now have the major automakers finally gotten their production back on track, so, in a few months, the price on Japanese cars will be dropping considerably as supply gets back to normal levels.
Another side effect of Japanese scarcity is the rise of Korean automakers. Hyundai and Kia have been keeping their production at their usual numbers throughout the year, which means customers looking for new cars have been flocking to them. And that’s bad news for the Japanese: they’re losing market share to Korean carmakers in large numbers. For example, Toyota is at 13% market share, down from 17% last year.
In addition, some American carmakers have managed to get onto car-buying radars across the country. Chevy in particular has been showing a lot of appeal to new buyers lately. While American carmakers already have strong incentive programs, they may sweeten the pot in order to better compete, or authorize their dealers to make better deals on a case-by-case basis.
Finally, there’s the simple problem that all car buyers know and love: dealerships have to get the 2011 models out the door to make room for the 2012 models. It’s a yearly event, but this year in particular will see some sweet deals, thanks to all the factors we’ve mentioned above.
This isn’t to say that every single car you come across this fall will be a deal. Like any other major purchase, you should be savvy. Compare prices against other dealers in your area. Scour the internet for comments from other consumers on the dealership you’re considering. For any model of car, look at tests done by companies like Consumer Reports to see what they liked and what they didn’t. Then worry about the deal: the price is always right when the car is just right.