What is the wiggle room with a car dealer?

What is the wiggle room with a car dealer? How much will a dealership reduce the price of a car? The discounts vary based upon MSRP, vehicle brand and invoice pricing. It’s not straightforward across the board. For example, all Toyota Camry SE models are the same but the discounts offered to that brand vary when compared to another brand, make and model. There is no broad stroke general rule of discounting. Pricing vehicles by the dealership has many variables.

Supply and demand does impact pricing.

Yes, supply and demand is a pricing factor. If there is a vehicle that is trending with high consumer demand, dealers will not budge on the price. If, however, it’s the end of a model year and the new release is about to roll out, you may cash in on some dealer-motivated pricing.

Car dealerships have systems which determine pricing.

Price decreases may also rely upon manufacturer discounts and dealer programs, equipment, models and even simply the vehicle color. Pricing new cars is actually a science. Dealerships don’t leave it up to a person to change prices, but instead have access to platforms that help them do just that. These platforms take individual state car sale information and distribute it. This allows real-time ability to “price” cars to the current market and availability. Properly pricing vehicles is the only way that dealers can get a car in front of a consumer’s eyes when doing an online search. If the dealer’s pricing is out of whack, it will be buried in the search results, pages down, as out-of-market value.

Little markup in new vehicles.

Some new cars have literally just a few hundred dollars in markup, not thousands of dollars. Dealers have very little room to wiggle on pricing. If they decrease the price, their profit could be nearly zero, or even worse. With used vehicles, there is a larger opportunity for price negotiation. Since no two used vehicles are the same, many factors such as condition, mileage, vehicle type, wheels and tires and beyond are consideration points.

COVID impacted the pricing of automobiles.

When COVID began, car sales took a temporary hit but then sky rocketed shortly thereafter. Pricing held strong because supply and demand became a problem. As a result of factories and suppliers being shut down or slowed, inventory was depleted. Now, however, factories are open and often working overtime to catch up to demand.

Used car vehicle values have increased.

With car pricing being elevated, used car values have risen. In fact, used cars have never been more valuable.

With CarSnoop, the new car price may not be all that different, but by allowing dealers to bid for your trade (if applicable) and business, you’ll be in control of who gets your business and which offer best suits your needs. You remove yourself from the entire dealership experience and put our CarSnoop concierge team to work.