The upcoming Memorial Day weekend is always an opportune time to shop for a new car. This year, it might be even better. Sales are down and incentives are up.
Before heading for a new car showroom, however, it's a good idea to do some homework first. Narrow your choices to just a few makes and models and learn as much as you can about them before you ever talk to a salesperson.
Tools such as True Car, Kelley Blue Book, and Edmunds can give you a pretty good idea of the price you can expect to pay for each model and trim level. Use these tools to compare your choices and use a car payment calculator to figure out what the monthly payments will be.
Consider supply and demand
If you are looking for the maximum amount of leverage in a new car negotiation, you might consider supply and demand. If the model you want happens to be "hot" at the moment, you'll find less wiggle room than if the model, for one reason or another, has fallen out of favor.
U.S. News recently crunched the sales numbers and came up with seven makes and models that haven't been moving off the lot in recent months. They're certainly worth considering if you are looking for a deal.
In the luxury class, U.S. News reports the Lexus ES has suffered a 62.8% sales decline over the last 12 years. Dealers aren't going to give them away, but you can bet they're motivated to make a sale. The average negotiated sales discount is 7.2%.
You might get an even better deal on Honda's minivan, the Odyssey. Sales on this model are down nearly 31% and the average negotiated discount is 14%.
The Nissan Murano may be another value play. Sales are off more than 18% and buyers have negotiated an average discount of 16%. Right now U.S. News says qualified buyers can get 0% financing for six years and $3,500 cash back.
Becoming a buyer's market
"Car shoppers are in a stronger buying position now than they have been in the past nine years," said Jamie Page Deaton, managing editor of the U.S. News Best Cars Rankings. "Oversupply and diminished demand are forcing dealers to negotiate and automakers to offer big incentives."
Other attractive buys this weekend could include the Cadillac ATS, Mazda 3, Acura RDX, and Chevrolet Impala. U.S. News says they can probably be purchased at a discount of between 6% and 10%.
In addition to options and safety features, it is also important to consider how you are going to pay for your new car. If you are financing it, how long you will stretch out the payments is a very important decision.
To keep payments low many buyers now routinely finance a new vehicle purchase for six years or more. A better option may be to select a less expensive vehicle that can be affordably financed over four or five years.