6 Tips for How to Get the Best Deal on a New Car in 2023
If you’ve become discouraged by the new car buying market and are wondering how to get the best deal on a new car in 2023, you’re not alone. A lot has changed since the pandemic in how Americans buy their cars.
Instead of walking onto a dealer’s lot at the end of the month to grab a last-minute bargain, car-buying in 2023 requires a bit more strategy than before. Doing your research ahead of time is essential, including knowing the local car buying trends in your local area. With a little time and patience, you can put yourself in a position to score a good deal.
New Car Buying in 2023: What’s Changed?
Just a few years ago, it used to be a car buyer could show up at their local dealership during the last few days of any month to get the best price on a new car. This is because dealerships had end-of-month quotas to meet and excess inventory they were eager to move off the lot. So, in the past, if your negotiations at one dealership failed, all you had to do was move on to the next dealer down the street.
All of that changed when inventory plummeted and global supply chains fell apart during the pandemic. When worldwide lockdowns drastically decreased driving, manufacturers tightened their belts in response. And in further anticipation of lower demand for new cars, manufacturers also canceled microchip orders. Unfortunately, those predictions were incorrect, and demand for new cars bounced back quicker than expected. Those decisions are what continue to impact new car inventory today.
Due to microchip and inventory shortages, month-end deals with below-MSRP pricing are a thing of the past. Nowadays, paying the manufacturer's suggested retail price (MSRP) can be considered a bargain. But there’s some good news for prospective buyers—car prices are projected to decline by 2.5% to 5% this year. So, what does that mean for you?
The rules for how to get a good deal on a new car have changed, and “good deals” look differently than they did before. To find the best deal on a new car today, starting your car-buying process with a plan, thorough research, and realistic expectations is more important than ever.
How to Get the Best Deal on a New Car in 2023
If you're ready to get honest about the 2023 new car market, and refinancing your existing auto loan is not something you want to do, these six steps can help you navigate the new normal in car buying.
1. Be flexible.
If you want the best deal on a new car, flexibility is key. You decrease your options and negotiating points with every must-have you add to your list of new car criteria. Some areas where flexibility can help increase your options include:
Car color: Many dealerships have limited inventory so being flexible on car color can help you prioritize other features you may find more important, such as vehicle type.
Extra features: Instead of waiting for models with upgraded wheels or roof racks to arrive on the lot, consider adding extras with aftermarket parts.
Vehicle type: Consider making a list of multiple car types that will serve your needs to set yourself up for the most options at the lot.
Interior: If you can stay flexible on upholstery and interior finish colors, you can potentially avoid special order-related delays.
2. Know MSRP (and how to master it).
The manufacturer’s suggested retail price, or MSRP, represents the price that auto manufacturers recommend dealerships sell their vehicles for and is usually displayed on a new car’s window sticker. While dealerships may want you to think of the MSRP as the car’s price tag, you should think of it as a starting point for any negotiations. You can find the MSRP on most makes and car models at Kelly Blue Book® or Edmunds®.
Once you know the MSRP of the vehicle you’re interested in, it’s a good idea to research the market value, or sale price, of the make and model by zip code. Market value takes into consideration several factors, including current demand, supply, options, and dealer incentives. If the car you’re interested in is in high demand, a market value of $5,000 over MSRP might be a good deal. Generally, a sale price slightly under MSRP will be a reasonable target.
Some examples of how MSRP can empower you in the dealmaking process include:
Price comparison: Since MSRP is the same across dealerships, knowing a car’s MSRP helps you accurately compare prices.
Confidence: Knowing a car’s MSRP and local pricing trends puts you in a better position to negotiate when you’re at the dealership.
Market savvy: When you combine MSRP and local pricing trends, you can better evaluate whether a deal is a good or bad.
3. Go domestic.
Given that U.S.-based car manufacturers have been working to rebuild their inventories, the best new car deals in 2023 could be on domestic cars. While you might have been an import loyalist before the pandemic, considering domestic makes and models could mean better options as well as make negotiating somewhat easier.
Some ways going domestic could aid your new car search include:
Higher inventory: Inventory is low across the board, however, most domestic brands generally have a 30-day supply (and faster availability for buyers), which is higher than many foreign manufacturers.
Cheaper transport: Since domestic cars are only transported within the U.S., their transportation costs will be lower than imported models (which means lower costs for buyers).
SUVs and trucks: Domestic manufacturers typically have a wide range of models that could meet your needs.
4. Be a local market pro.
New car pricing, models and availability vary by city and region. That’s why it’s essential to learn about your local new car market—including top models, pricing and current inventory. The more knowledge you have, the better you’ll be able to negotiate.
Once you have an idea of your preferred makes and models, contact multiple local car dealerships to inquire about:
Inventory: Knowing whether a car is in stock or requires a special order can help you negotiate a better deal.
Pricing: When you get price quotes, ask for “out-the-door” prices and get everything in writing via email or text before you visit the dealership.
Documentation fees: This fee (which usually covers administrative paperwork) can vary widely, so ask for a firm quote.
Manufacturer financial incentives: Ask about any available manufacturer rebates and incentives, including down payment specials and promotional interest rates.
Dealer promotions: Local car dealers are in constant competition, so it’s worth asking them about matching another dealer’s price offer.
5. Buy online.
If you can’t find the car and options you want at a local dealer, look at what you can find on the online auto marketplace. You can buy a new car online sight-unseen, or by test-driving the car you want locally, then placing a deposit on a similar vehicle online for delivery at some point in the future.
In addition to the shop-in-your-pajamas experience, buying a new car online can help you:
Find exactly what you want: Comparing different vehicle makes, models, features, and options from the comfort of home eliminates the pressure and time that comes with visiting multiple dealerships.
Compare prices: Online auto marketplaces make it simple to compare prices on the same make and model across multiple dealerships nationwide.
Go nationwide: If your ideal car isn’t available close to home, an online buying experience can find (and arrange delivery) of your vehicle in any of the 48 contiguous states.
6. Don’t ditch the old rules completely.
The car market has changed significantly, but that doesn't mean throwing out car buying rules of the past that still make sense. Some rules of thumb to continue include:
Time your shop. Want extra attention and assistance while you shop? Weekdays are still the best days to visit a new car lot because dealerships are usually less crowded.
Value your trade-in. Know what your trade-in is worth before you make a deal. Consider using Kelly Blue Book® or Edmunds® to determine the fair market price (for private sales) and trade-in price (for dealerships).
Shop the sales. Sales still exist in this market, so keep your eyes peeled for major sales events on holiday weekends like July 4 and Labor Day. Also look for year-end sales events from October to December when generous savings and incentives on vehicles from the outgoing model year are likely to continue.
Cast a wide net. It’s still true that driving a few hours outside of your city to a less populated area could potentially save you hundreds, if not thousands, of dollars on the price of a new car.
The Bottom Line
For anyone who wants to know how to get the best price on a new car in 2023, there are few things to keep in mind. If you can be flexible on make, model, and features, the more options you’ll have in a market where supply and inventory remain somewhat constrained. Be willing to do a bit of research on market value and price trends so you’re better equipped to negotiate and make a reasonable deal given today’s market conditions.