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Plenty of dealer options are worthwhile, but you might as well light that cash on fire with some others. Here’s a list of five dealer options to avoid at all costs.
One of the worst parts of shopping for a new car is sitting at the dealership for hours on end, dealing with car sales people and finance managers. What few people know is that you can actually have your new car delivered to your home, expediting the process and making it convenient to you.
This might be an obvious piece of information, but it’s always nice to have proof – a recent study shows that when buying a new vehicle, dealer treatment is a major reason why consumers choose to buy from a specific dealer over another.
The J.D. Power and Associates 2010 U.S. Sales Satisfaction Index (SSI) Study analyzed the new-vehicle purchase experience and found that 52 percent of new-car buyers reported the main reason behind picking one car dealer over another was how they were treated. The study also found that only 38 percent of buyers said vehicle price was the reason for selecting a particular dealer. This information shows that incentives and specials don’t move cars off the lot – it’s customer satisfaction.
Here are a few other interesting findings found in the report
- In the new-vehicle buying process, negotiating the deal takes the longest time (53 minutes on average) after selecting the vehicle.
- About 60 percent of new-vehicle buyers visit more than one dealership during the shopping process.
- Although many dealers are rejected for not having the type of vehicle that buyers wanted to purchase, a significant percentage of buyers (18 percent) end their showroom visit mainly due to poor customer treatment by the dealership salespeople.
- A majority (79 percent) of new-vehicle buyers use the Internet during their shopping process. Nearly one-fourth (24 percent) of buyers in 2010 submitted an online request for quote to a dealer, and were, on average, more satisfied with the negotiation process and price paid.
[Source: J.D. Power]
Fall is in the air. Besides looking to the calendar, you can always tell that autumn is just around the corner because the new cars for 2011 are making an appearance in a big way (manufacturers introduce new models throughout the year, but autumn remains the official start of the new automotive year). So with a new year of vehicles popping up, new-car buyers ask themselves the age-old question: Am I better off to wait for the new models to come out or should I buy a leftover at the end of the season? The answer: maybe.
Every five years or so, car makers completely redesign models, from making updates to mechanicals and styling midway to a full redesign. On the plus side, these new models come with the latest safety and convenience features, and updates to engines, transmissions, and technology mean improved fuel mileage and performance. On the minus side, they pretty much always cost more (this includes the models that only have a slight redesign), and don’t even about getting a discount.
If you’re going for a leftover model, there are plenty of pros on the benefits side of the list. You’ll be able to save some money upfront, because dealers want to clear old inventory. These cars come with a full warranty, and if you are a long-distance driver, buying a car at year’s end will give you one more model year to spread your miles over. Also, according to reliability surveys, new models have more problems on average than those that have been on sale for a year or more. This means the last year of a model’s production is often the most reliable.
On the down side, the leftover car is a year old the moment you drive it off the lot, which means you’ll lose a money of the depreciation if you trade every couple of years. And if your leftover has been replaced with a redesigned model for the new model year, it’s likely to depreciate even faster.
[Source: Consumer Reports]
What can you afford these days? It’s not a set of wheels, because numbers released recently show that the average American family can’t afford a car.
New car prices have slowly begun to creep back up, and thus, are out of reach for some Americans. During the recession, the average family could have paid off a new car in as little as 22 weeks. Today, it takes 23.6 weeks of median household income to purchase a new car. But it’s better than in 1997, when the average was more than 30 weeks.
These stats are coming from Comerica Bank, which keeps track of auto affordability as an index. In the second quarter of 2010, the average price of a new car ($27,950) rose $200 from the same quarter a year ago. But there’s a silver lining in this dark cloud – the interest rate on the average car loan was 4.1 percent, down 0.2 percent from the previous quarter.
“Affordability was flat in the second quarter as rising expenditures on the new cars were offset by lower interest rates,” says Dana Johnson, chief economist for Comerica Bank. “Although the national recovery slowed in the second quarter, consumers were still willing to pay more for new vehicles.”
The slight increase in the cost of a car, lower interest rates and an increase in personal income has kept affordability mostly in check in 2010. During this current quarter, the average family income went up 2.4 percent while interest rates for car loans fell to a 4.1 percent average.
[Source: Kicking Tires]
Car buyers are pretty loyal – they tend to stick with the same brand when it comes time to buying a new car. But if they were to switch sides, a new Consumer Reports survey says that higher quality, better fuel economy, and a lower price are the big three factors influencing their decision.
This telephone survey was conducted by the Consumer Reports National Research Center, and they interviewed more than 1,700 adults whose household owns at least one vehicle.
The results showed that brand attachment varies by age and gender. Women are more likely to stick to a brand – 54 percent of women would purchase a new car that is the same make as they currently own. And brand loyalty seems to be prevalent in older drivers as well. According to drivers over 35 years old, over 50 percent plan to stay with the brand they already own. Younger drivers are more fickle – only 41 percent of drivers aged 18 to 34 years old would buy the same brand again.
It also seems that money can’t buy you love or loyalty. Results from this survey show that household income does not play a role in car brand loyalty. When compared to drivers who pulled in a modest salary, affluent consumers were nearly equal in their attachment to a brand.
What does come from this research is it proves that car buyers are, not surprisingly, attracted to the highest quality and most value for the money. Basically, our purchasing influences are those that can save money up front, at the pump, and in the long run. For more car buying motivators, see the graph after the jump.