|Car dealers always say it's a great time to buy a new car.|
Right now, they might actually be right.
Chrysler and General Motors last week said they were closing nearly 2,000 dealerships across the country as part of their restructuring plans. And that, of course, means a lot of inventory must be sold quickly.
This hits an industry already struggling with a collapse in sales. It's the biggest buyer's market in living memory.
Looking to take advantage? Here are ten things to bear in mind.
1. If you're looking for the biggest discounts, start in the obvious place: Chrysler. "A typical Chrysler vehicle is being discounted by about 25% or more off the recommended sales price," says Jesse Toprak, analyst for buyers' guide Edmunds. For trucks and large SUVs, he says, that discount can be 40% or more.
2. Talk first to dealers who are on the closure list. "The cars have to go," admits Jim Fyles, owner of Gil's Jeep in Stratham, N.H., which is on the list. Mr. Fyles said he and other dealers have to clear their inventory by mid-June, and he's willing to take a loss to shift the products.
3. Think twice about buying Chrysler if you think you might want to sell the car in the next few years. Resale prices are poor. Chryslers make more sense if you plan to keep the car till it dies.
4. If you're in the market for a General Motors vehicle, be willing to wait a few weeks. So far, prices haven't come down as far as Chrysler's have. But the company is widely expected to end up in Chapter 11 bankruptcy. If that happens you may get a better deal.
5. Don't think the sale only affects Chrysler and GM. The industry slump, and inventory liquidation, are pushing prices down across the board. "No manufacturer has been unaffected," says Jack Nerad, analyst at Kelley's Blue Book. "They're all in search of cash flow. They're all looking to offload inventory."
6. Before you buy a used car, do the math on the new model. In normal times new cars offer a poor deal. But these are not normal times. A recent study by Edmunds found that in some cases, when you factor in all the incentives, new cars might be cheaper.
7. Shop around even more than you normally would. This is a buyer's market. Visit several dealerships -- some are more desperate than others. Get two or three quotes before you buy.
8. Call ahead, or check online first, to see what the dealers have on offer. If you call, says Edmunds' Jesse Toprak, ask to talk to the Internet manager. They are used to dealing with savvy online shoppers and are most likely to give you a firm quote quickly.
9. Submit a lowball offer, but don't be ridiculous. Some people are offering $10,000 for a $30,000 car. They're wasting their time. Do your homework first. Check what cars are selling for before you start negotiation.
10. Basic, but very important: Understand what a dealer's closure will mean for things like after-sales service and warranty programs. This includes knowing where the nearest Chrysler dealership will be after your dealer closes.
Write to Brett Arends at firstname.lastname@example.org