Modern-Day Car Shopping
With the internet’s encroachment on our every waking hour, it’s not surprising car shopping is now dictated by the internet as well. People people used to drive around for hours looking at different dealerships; now they use that time on their couches surfing the web for different deals. The beauty of it all is that you can see all your options. The downside is that it can be overwhelming because you can see all your options. So what do you do when you are thinking of looking for a new (or new to you) vehicle?
Are you partial to a particular brand, or are you more concerned with options and budget? The process is actually quite simple. If your family is a die-hard Jeep family, Google “Jeep dealers near me”. At that point, use the Jeep website to find the nearest dealer or your local Jeep dealer will pop up if you have your location settings on. If you’re more interested in just seeing what’s out there, websites like CarGurus, Cars.com, CarSoup, and Autotrader have it set up so you can customize as much as you’d like: price range, miles from your location, mileage, color, year, as well as items such as navigation.
One thing you’ll see if you look at CarGurus is they also rate the deals on a scale. In doing a general search for Jeep Grand Cherokees, one that we have at Reed Chrysler pops up first. If you look at the results that pop up on CarGurus, you’ll see that CarGurus rates each deal – our Grand Cherokee rates as a “great deal”. Now here is where it starts to get tricky. Back in the day, there were obscene markups on vehicles, which led to extensive negotiations with the dealerships. However, that practice is pretty much dead. In order to remain competitive in such a saturated market, dealerships have to be extremely transparent in their pricing, so much so that you are getting thousands of dollars under MSRP (or book value if it’s a pre-owned vehicle) sometimes.
What does MSRP even mean? It stands for Manufacturer’s Suggested Retail Price. It includes all of the options that the vehicle currently has. An MSRP will typically be different than a base price, since the base price is the most basic vehicle in that model lineup; most people like to have add-ons, such as heated seats or remote start, which will add to the MSRP. How can dealers mark below MSRP then? Well, sometimes the dealer gets rebates, such as a great 20% rebate that we have on select Jeep models through the end of the day today. Another way that this could happen is that dealerships mark the vehicle as close to inventory cost as possible, which is what the dealership paid for the vehicle. Contrary to popular belief, there is typically not as high of a difference between MSRP and invoice price. In order to remain competitive, most (if not all) dealerships price their vehicles so aggressively they’re treading the line of their invoice price.
What about pre-owned vehicles? Here at Reed Chrysler, we use sites like NADA and Manheim to see where to price vehicles. NADA is similar to Kelley Blue Book in that it gives different level of prices based upon factors like condition, mileage, package levels and the like. We also compare that with prices that are found on Manheim, a website that tells us what cars similar in condition and mileage are going for at auction. Using that combination, as well as the fact that third-party websites like CarGurus rank prices according to how good the deal is, prices are also very competitive in the pre-owned world as well.
Where does this transparency leave you, the buyer? Consider all pressure taken off of you, you no longer have to haggle for hours with a dealership. Chances are, that the vehicle is priced as low as they can go. Does that mean that you can’t ask if that’s the “best price”? Go for it, but don’t be surprised when you either hear back “that is our best price” or the difference is only $100-$200 dollars. That’s the beauty of the internet though, you can have third-party websites, like CarGurus, email you when the price drops; you can shop around for ages until you find exactly what you’re looking for; you can communicate with a dealership til it’s practically time to come in and get the vehicle and sign the paperwork all from your phone or you can pop over while you’re running errands and see everything for yourself. The car shopping experience is whatever you want to make of it these days.
What’s your most pressing question about modern-day car shopping? Let us know in the comments!