Edmunds.com Discovers Current Market Presents Unexpected Risks and Rewards for Car Shoppers
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Edmunds.com Discovers Current Market Presents Unexpected Risks and Rewards for Car Shoppers
SANTA MONICA, Calif. — February 2, 2009 — In today's volatile economy, anyone who doesn't shop around for the best price is taking a real financial risk — and for savvy buyers who do their homework, there is a remarkable opportunity to save money like never before. Today Edmunds' AutoObserver.com reported that its analysts have discovered an unusually wide range of prices and finance rates for car shoppers, depending on where they take their business.
Edmunds.com analysts have determined that the variance in new car prices increased by 62 percent from July to December. In other words, today's buyers could pay substantially more or less for a vehicle depending on where they shop.
"The car business has been pummeled by the economic downturn, and individual dealerships are dealing with tough times in different ways," explained Edmunds.com CEO Jeremy Anwyl. "Some are offering substantial price cuts in order to close as many deals as possible, while others are striving to earn the highest possible profit on each sale."
For example, in December:
- At the low end, a BMW dealership's average transaction price for the typically equipped 3 Series was $40,924, while at the high end, the average was $47,458.
- At the low end, a Ford dealership's average transaction price for the typically equipped F-150 was $27,082, while at the high end, the average was $36,641.
- At the low end, a Honda dealership's average transaction price for the typically equipped Accord was $22,036, while at the high end, the average was $28,966.
"As automakers strive to clear out old inventory at the end of a model year, they generally put more generous incentives on those older vehicles," stated Edmunds.com Senior Analyst David Tompkins, PhD. "Now, dealers are operating under very different theories about whether to extend the generosity or not — for example, whether to pocket dealer cash or pass it through to customers."
Edmunds.com's research also shows that anyone who seeks a car loan from a variety of lenders is likely to be presented with a range depending on the fiscal health and the competitiveness of the lender. Car shoppers with good credit are likely to be offered rates from 4.5 to 8 percent for a 60-month loan. Pursuing the lowest rate could reduce the payment by more than $50 per month on a $25,000 loan. Those with lower credit scores will see even more variance in the range of rates presented to them.
"In the past, different lenders generally offered similar rates to consumers in the same credit tier," commented Anwyl. "Today, not all lenders are in a position to fund a large volume of loans, so many of them offer higher rates that deter some customers."
"More than ever, it is time to do your homework," recommends Edmunds.com Senior Consumer Advice Editor Philip Reed. "Now, when you talk with dealers it isn't so much a matter of negotiating, but getting someone to match or beat the deal you've designed using all the research at your disposal." Reed provides specific consumer advice tips at http://blogs.edmunds.com/strategies/2009/01/dealer-prices-vary-wildly-in-changing-market-shopping-around-key-to-good-deal.html. Available spokespeople include:
- Jeremy Anwyl, Edmunds.com CEO (Los Angeles)
- Philip Reed, Edmunds.com Senior Consumer Advice Editor (Los Angeles)
- Michelle Krebs, Edmunds' AutoObserver.com Editor (Detroit)
- David Tompkins, PhD, Edmunds.com Senior Analyst (Los Angeles)
- Jesse Toprak, Edmunds.com Senior Industry Analyst (Los Angeles)
- Jessica Caldwell, Edmunds.com Analyst (Los Angeles)
- Stephen Berkov, Edmunds.com Senior Marketing Analyst (Los Angeles)
- Kevin Smith, Edmunds.com Editorial Director (Los Angeles)
- Karl Brauer, Edmunds.com Editor In Chief (Los Angeles)
About Edmunds
Edmunds.com publishes three Web sites that empower, engage and educate automotive consumers and enthusiasts. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value® , is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in January 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in February 2006 and is an automotive social networking Web site and home to the oldest and most established automotive community. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.
