New Car Pricing – How Far Low Can You Go?
Wednesday, July 21st, 2010
People hate dealing with car salesmen. No one ever knows what they are hiding. In fact, thank goodness for websites like TrueCar and Edmund’s, without which you’d never know what kind of new car pricing was fair, right? Before I answer that question for you, perhaps you could answer it for yourself. Does the world function in such a way that you are ever told what anything you buy a really costs the vendor? From a hot dog on a street hotdog stand to a Sony flatscreen, all you hear is that one store tries to beat another on pricing. You’d never know how far low things can go, because no one tells you what the real cost to a dealer is, buying the stuff he deals in. Why on earth would sites like MSN Auto or Edmunds do this nice thing for you that you see nowhere else in the world? It’s simple – they aren’t really doing this for you. They only want you to think that they are.
These websites are not cheap to create and maintain. How do they cover their costs? If you will look a little closer, those websites are completely full of banner ads from the car companies. Each time a visitor to the website clicks on one of these banner ads, the website makes at least $10. They certainly aren’t going to do anything to annoy their cash cow. What this means is, they can never tell you the truth about how much the car companies and their dealerships are making. What they can and do tell you reliably is how much the sticker price is at any given car dealership. They also tell you all about the rebates going on at the moment. Which information is useful, but not really something that’s very hard to find yourself.
Websites like Edmund’s try to sell you on something called the True Market Value on each car. They say that this is your target for the price you need to work your dealer down to when you go in to buy a new car. They also say that it’s the average price paid in the market now. How can the best price be the average? An average price has to be higher than the best price. The truth is, you could really work the price down from target prices that Edmunds gives you. Your only problem is, no one tells you how far low you can go. People think that no matter which dealership they go into, they’ll usually get the same prices quoted. Think again. Different dealers is a different haggling philosophies. New car pricing can often very by hundreds of dollars from dealer to dealer.
Those philosophies can change from week to week. A dealer with a very low price to pay can have a very high price tomorrow. Information is your best ally when you go in to buy a new car. Even if the dealer smiles at you, he’s not really on your side.

