Only the wealthiest – or most foolish – car shoppers will pay full price for a new car. For the rest of us, negotiating the lowest possible price on a given vehicle can amount to saving hundreds or even thousands of dollars, depending on the model.
While all makes and models come with a manufacturer's suggested retail price (MSRP), their final transaction prices are usually negotiable, at least to some degree.
According to the Automotive Intelligentsia Money-Saving New Car Guide, the price that a given new-car buyer ultimately pays is a peculiarly and almost constantly moving target that's subject to a wide range of economic, internal and external factors ranging from the time honored forces of supply and demand to the value of an automaker's retail incentives and promotions and a dealer's sheer willingness (or resistance) to sell a particular car for less money.
While the Internet has helped soften the process somewhat by allowing buyers to obtain and compare online price quotes, these aren't necessarily the lowest attainable prices. Automotive Intelligentsia suggests buyers consult online pricing sources before setting foot in a dealership, making note of both a model's MSRP and its so-called invoice price, including options. The idea is to negotiate a transaction price that's as close to invoice as possible – a dealer's actual cost is usually a few percent lower.
If the manufacturer is offering a direct-to-consumer cash rebate, deduct it from the transaction price only after you've negotiated the deal to your satisfaction.
And that applies whether you're buying a car outright or are leasing it. Few shoppers realize leasing prices are as equally negotiable as conventional purchases. In fact, those looking to lease a car can avail themselves of some of the best bargains in the business right now, according to Jesse Toprak, vice-president of industry trends for TrueCar.com.
"High resale values and low interest rates are contributing to some of the most attractive lease deals we've seen in years," he says. That's because lease payments are based on a car's negotiated transaction price minus its projected value at the end of the lease term, financed at the going interest rate.
Either way, Toprak says dealer discounts are "at their lowest percentage in years," due largely to higher new-car sales and lower inventories, particularly among domestic automakers who've cut production substantially in recent years, and Japanese companies who are still reeling from parts shortages caused by this year's earthquake and tsunami. He feels the situation should remain stable going forward, with dealers continuing to enjoy a negotiating advantage, particularly among smaller and more fuel-efficient models that have surged in popularity.
Buyers will still have the edge when it comes to larger and less efficient models that fallen out of favor with today's buyers, however, particularly big cars and truck-based SUVs, he says.
We've compiled the accompanying list and gallery of the 14 Easiest Cars to Bargain For, one in each model segment, based on TrueCar.com's Price Flex index, as published in its July 2011 TrueTrends report.
These are the models in each automotive segment having the highest Price Flex scores, which indicate the largest range of transaction prices. TrueCar.com says these can be interpreted as being among the models with which buyers have the most negotiating power.
We've also made note of any manufacturer rebates in effect for August 2011 that can further sweeten a deal, along with each model's range of published list and invoice prices. All sales data cited comes from Automotive News.
As with most new-car deals, the forces of supply and demand largely determine which models make the list of most-negotiable cars. That's why you'll find many slow-selling models represented, like the rough and rugged Toyota FJ Cruiser midsize SUV, the fuel-thirsty Nissan Armada full-size SUV and the largely ignored Volkswagen Routan minivan.
The list also includes a few model-year 2011 vehicles that are being redesigned for 2012, like the Mercedes-Benz SLK roadster and the subcompact Nissan Versa, that are being sold at clearance prices. You'll also find a few cars in highly competitive model classes that dealers are pushing aggressively, like the Chrysler 300 full-size sedan, Nissan Altima midsize sedan and coupe and the Mercedes-Benz GLK compact luxury crossover SUV.
Subcompact Car: Honda CR-Z
With gas selling for nearly $4.00 a gallon, fuel-saving hybrid cars have become hot items. One possible exception would be the subcompact Honda CR-Z, which only seats two passengers and offers little in the way of practicality. CR-Z sales amounted to just 878 units in July, and Honda dealers probably had to offer bargain prices to move that many of them. By comparison, the more-practical midsize Toyota Prius hybrid sold a segment-leading 7,907 units over the same 31 days. Still, the CR-Z has its merits as being fun to drive, with lively acceleration and crisp handling, and selectable "sport" and "eco" modes to enhance either its performance or fuel economy, which tops out at 35-city/39-highway mpg. MSRP: $19,345–$20,905; Invoice Price: $18,260-$19,726.
Small Car: Nissan Versa
With a redesigned 2012 Versa subcompact now rolling off delivery trucks, Nissan dealers are whittling down their markups – or at least what little there is – to help clear the lots of remaining 2011-vintage inventories. The compact Versa boasts an ultra low base price, but that's for a barren sedan few shoppers will ever see on a showroom floor. Other versions are still affordable, though the car's price can nearly double in its top version when loaded up with options. A meek 1.6-liter four-cylinder engine is standard, though most Versas come with a better performing 1.8-liter engine, with four separate transmissions offered. Nissan is offering cash rebates of between $2,500 and $3,000 to further sweeten a deal on the 2011 models. MSRP: $9,990–$17,410; Invoice Price: $9,759-$16,788.
Small SUV: Mitsubishi Outlander
With a new Outlander Sport model having debuted for 2011, sales of the slightly larger existing Outlander have plummeted. Dealers are probably cutting deep into their already slim margins to move Outlanders off the lots. Mitsubishi's giving buyers a $1,000 rebate on the Outlander, with dealers getting an extra $500 they can further leverage to lower the transaction price. It remains a lively ride with decent ride and handling qualities and a choice of a standard 2.4-liter engine or a considerably peppier V6. MSRP $21,995–$27,795; Invoice Price: $21,066-$26,621.
Small Truck: Nissan Frontier
Though small pickup trucks aren't particularly popular these days, sales of the compact Nissan Frontier are actually up by about 26 percent through the first seven months of 2011. The Frontier carries burly styling and decent all-around performance, with a wide model line that offers two cab sizes and two bed sizes, with a choice of four- and six-cylinder engines and rear- or four-wheel-drive and an off-road PRO-4X model. Nissan is offering buyers between $2,500 and $3,000 cash back this month on the Frontier. Unfortunately, most pickup buyers have long figured out they could get a more-capable full-size truck for not much more money. MSRP: $18,200–$32,080; Invoice Price: $17,262-$29,719.
Midsize Car: Nissan Altima
Sales of Nissan's best selling car, the stylish midsize Altima, were up 16.8 percent this July, though dealers are probably dropping prices to keep moving the metal in what is the most competitive segment in the car business. The Altima comes in sedan and coupe versions, with a choice of fuel-efficient four-cylinder engine or a more-powerful V-6. The car's handling is a bit more playful than with more-passive midsize stalwarts like the class-leading Toyota Camry. Nissan is currently offering a cash rebate of $1,500 on the Altima. MSRP: $20,270–$30,540; Invoice Price: $19,431-$28,294.
