Ways to save money when buying a new car

PITTSBURGH — July is the traditional start of the car-buying season. That’s when many of the new models hit dealership lots and for the first time in many months, experts say savvy shoppers may be able to get a deal on some wheels.

For the past two years, saving hasn’t been easy. Car dealerships nationwide have been virtually empty as a shortage of semiconductors and other key components meant low inventory.

Scott Brewer is president of the Western Pennsylvania Automobile Dealers’ Association, which represents 200 dealerships in the region. He says for the first time in a long time, he’s encouraged by what he’s seeing.

“It still does not look amazingly full, but it is more full than it has been in three and a half years,” said Brewer.

Brewer says he gets a shipment of new vehicles several times a week and that provides an opportunity for consumers.

“It’s very important to a dealer to cycle through our inventory. So once you see it and it’s here, come and get it,” said Brewer.

But will you pay sticker price, or is there room to negotiate?

Sridhar Tayur, PhD, is a CMU professor of operations management, and a supply chain expert. He advises car buyers do their homework.

Something that consumers might not be doing usually is going on the web and checking the inventory days of supply, a calculation of how many days it takes inventory to sell, or turn over.

“It might not be how shoppers think about it, but it might give them a sense of where there could be some negotiating power,” said Tayur.

Tayur says dealers may be more willing to cut a deal on makes and models with more days of supply. To get an estimate of the inventory days of supply, consumers can do a web search for the make and model of a car and the terms “days of supply”.

According to Tayur, Volvos have about 40 days of supply. Some Fords are 40 or 60, and Hondas are still in high demand with only 20 days of supply. That means a dealer may be much less likely to give you a price break.

“They probably feel it’s selling like hot cakes. I don’t see why I should give you a better deal,” say Tayur.

Here’s another way to save: look for a used car. This year, there are more available.

“Now because we’re getting more new cars in, it’s put less pressure on the used car market and so those prices have come down to a normal level,” said Brewer.

Used car prices are down four percent over this time last year for an average of $27,000.

If you do really want a new specific make and model, Brewer says pre-ordered cars are being delivered much faster.

“The wait now is a week or two to a month. It’s not months,” he said.

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