Buy a new car or wait? Would love your thinking

Parent Cafe
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Thanks for all your thoughts.

@GKUnion, I would pay cash unless there were preferred financing (ShawD bought a new Subaru because there were offering 1.9% financing and I advised her to borrow what they would allow her to). But, I could include financing costs rather than just 1/10 of the price.

@Publisher, the source is the CEO of a supplier to auto companies. I assume that he was told this by BMW but I do not know anything beyond that.

@tsbna44, what is trunk money? I’m not panicking, just thinking that we probably will be replacing ShawWife’s car in couple of years.

@DadofTwoGirls, I actually did not look at the price differential. I have installed a 24kW solar installation on my house and figured that switching to solar would be good but that I still want to drive to NY or Florida or Canada and don’t want to have to wait for recharging.

@Colorado_mom, agree on cash. We probably are not cash-constrained within the set of reasonable choices. I paid a bunch for performance options (better suspension, etc.) on my BMW and one of the things that came with those options were incredibly comfortable seats. We discovered that you can drive for 12 hours and not want a chiropractor at the other end. I would try for that in my car again assuming those options are available.

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Then it is just an educated guess because there are many factors to consider–some which are unknown at this time–and much depends upon where the particular BMW vehicle is assembled with CKD a possibility for some BMW models.

Also, the today’s elections may impact the current administration’s course of action with respect to tariffs.

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To me, peace of mind and avoiding any extra hassle are the two most important criteria of car ownership. I’m with @oldfort here. Will replace our EV with another EV because this was the most hassle free ownership by far. Plug and drive. No semiannual oil changes, which was my responsibility to schedule and manage. My life is busy enough without all of that!

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My sister-in-law is buying a new car. She isn’t the most up to date on things. She looked last week and didn’t like my of the colors on the lot. She put down a deposit on one that is in progress. How will the tariffs affect her? It’s a Toyota hybrid.

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Trunk money = manufacturer incentive to the dealer that is unknown to the public.

For example, you might see a TV commercial offering $2,000 off or 2.9%. That’s direct to a customer.

But the manufacturer may have more money available behind the scenes - or dealer cash.

It could be flat base - on every Camry, you’ll get $1,000 dealer cash (so it’s not advertised - it’s for the dealer to do as they want).

It could be contest based, hit x objective earn $1,000. Or Stair Step based, hit X get $1,000. Hit Y, get $2,000.

In general, the best time to buy a car is the last day of the quarter. Yesterday, my dealers reported 36% of March sales, much higher than the percentage on the last day of the first two months in the quarter.. Much of the sales data you see in the auto industry isn’t real because vehicles get reported as sold that aren’t.

If the OEM is paying $3,000 a unit if you get to 100 and you’re at 95, guess what you’re going to do:

  1. Call everyoe you know - because five sales gets you $300K, four sales gets you $0 - so you might go $10, 15K off a vehicle.

  2. Put into service loaner - even if you don’t plan to use it - because it’s a sale

5 Many dealers have leasing or fleet companies - mainly so one can report a sale when needed.

Many programs run monthly but some quarterly - so the last day of a quarter is your best day to attack - price wise.

Some programs are model based but some are overall brand based.

You’ll rarely if ever see a luxury advertise customer cash - but all have “trunk money” or dealer cash. The reason you won’t see customer cash is they don’t want to denigrate the brand strength.

But if sales are slow or dealer profits low because they have to give the car away to get customers to buy, then the manufacturer will come in on the back end.

Because we only make money selling cars if the dealers buy from us…

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Thanks. Is the trunk money reported in any way (some newsletter or purchasable service)?

If I am not mistaken, the luxury deals do the discounting in part with low or zero percent financing. Am I mistaken?

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No - that’s the point - you don’t know. It’s for a dealer to use to make a deal - although some like to hold it for profit - and then you have a Dealer Principal/GM vs. Sales Guy conflict - sales guys want to hold gross (profit) - that’s how they are paid. GMs want units gone - so they are not paying floorplan on it (a mortgage). So they want the money in the deal - if needed. If there’s ample inventory from a manufacturer, stores will discount - because they can get more. If inventories are tight on a model, they’ll hold for sticker or close…or a few years ago, well above.

You see what you see - which are customer offers - whether cash, APR, free warranty, etc.

Yes, some luxuries or semi luxury (Volvo, Genesis, Acura) might get a bit more aggressive - rates, warranties, and more.

Others will give you special pricing via Costco, etc.

What I’m hearing more from stores today then ever before is customers are not even going in. They know what they want. The same person reaches to 5 or 8 stores - says here’s what I want (will give a VIN) - give me your best price.

So a lot of the “salesmanship” opportunities are no longer even there.

One last thing - when you see an APR - say 3.9% for 60 months - it’s likely the “buy rate” or the rate the dealer is getting is less - 1 to 2 points but the captive finance company (Toyota Financial Services as an example) allows for mark up so the dealers can make money. The “advertised” rate will always include the mark up allowance. So on that 3.9%, the dealer might be buying it at 1.9% or 2.9%. Usually a 0% rate has no mark up allowed but the dealer will get a flat payment (say $500) for doing so. Because 0% is such a statement in and of itself, an OEM doesn’t want it marked up.

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Others more knowledgeable about the car market can address this generally. But when I was feeling a bit bored with my car, I went to the Lexus dealership, and the sales rep told me that management was willing to be very flexible/aggressive on pricing for the coupe (I was looking at a model that came as a coupe or a sedan), because there was more demand for the sedan and the model was getting long in the tooth (the sales rep didn’t say the latter…but the system still came with a cd player in 2024).

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Our 2025 BMW PHEV was assembled in South Carolina. Parts are probably imported though, and subject to tariffs. Glad to have it done.

Like @shawbridge, we drive our cars 10+ years. The Lexus that the BMW replaced was a 2010 w/ about 150k miles. Solid citizen. Ironically, it developed major problems three days before we were to pick up the new car. Must have been mad at me :wink:.

We usually private sell our old cars, but traded the Lexus in. The owner of the BMW dealership also operates a Lexus dealership. We received a decent offer, even after the new car was already negotiated.

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Regarding when to replace old car, I consider the cost of repair in relation to value of car, in addition to cost of replacement and other cost to own type criteria similar to what you listed. It’s difficult to apply a simple formula, as many variables are not well known and personal enjoyment / quality of life change type values are difficult to quantify. For example, I recently bought a new (to me) car. The car it replaced was an old Acura, with a myriad of mechanical and cosmetic issues. They aren’t the type of issues that are likely to leave me stranded on the side of the road in near future. I was comfortable taking the car on a >1000 mile road trip vacation recently. However, any mechanic inspecting the car would quickly notice that fixing all the major issues far exceeds the car’s value.

When in this position with repairs far exceeding car’s value, I avoided putting additional money in the car when practical, with little concern to long term preservation, and instead considered putting money in to a replacement. When making this decision, I also considered things like used car pricing trends. There was a huge bump in both used and new car pricing following COVID supply chain disruption. Post-COVID used car pricing has been gradually dropping back towards pre-COVID trends, continuing to decrease throughout 2022, 2023, and 2024. This made me reluctant to buy. However by the end of 2024, the rate of used car price decrease had slowed enough to make me more open to buying.

At this point, I started looking at specific car models and how they fit with my goals and alternatives, how specific models compared on buy vs keep old car. My priorities for a new (to me) car included excellent short and long term reliability, good enough HP/performance/handling such that I enjoy driving, avoiding steepest part of depreciation, and other criteria; I concluded that the car model that best met my criteria was an 8th generation (2018+) Toyota Camry, and buying was desirable over keeping my old Acura. Next I started looking at specific cars. When I found one with the combination of the mint condition, trim, year/miles, Carfax/history, color/mods (favor a unique color shade that is no longer made), and sticker price I wanted; I took it for a test drive and made an offer. The dealer agreed to take ~10% off sticker to match best alternative offer for comp in my region and also gave me 6 months bumper-to-bumper warranty, so I bought the car.

Regarding tariffs, there does seem to be an increase in pricing trends due to people trying to buy before tariffs hit. Example pricing trends for the MDX model you mentioned is below. The trend shifted from decreasing prices to increasing prices almost immediately after the auto tariffs were proposed publicly on Feb 18th. There is too much uncertainty with in what form tariffs will or will not be applied, how sellers/buyers will react to those uncertain tariffs, how market forces and competition will influence prices with potential dramatically varied degree of tariffs applied to different makes/models, … to say much of anything with confidence; but at least at present, there seems to be an upward trend in prices. That trend may or may not change, depending on what happens with the announcement tomorrow. If it were me, I’d review trends for the specific models and condition (new vs used) that I was considering, as well as sticker prices of available models in my region. Depending on results of that review, it may or may not impact my decision.

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Lol, in 2017 I traded my 2005 MDX in on a 2017 CRV. It had 220,000 miles. It was a great car!!

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Yup. Been there. A salesperson said he’d boost the trade in value of our junky car so that it would not look like he gave us a discount on the new and very popular Lexus. It was one hour before the dealership was closing for the day, last day of a quarter. Fastest car purchase complete with the trade in and financing we’ve ever done.

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Negotiation could be its own thread. H is a master negotiator. Once we dialed into exactly what we wanted trough test drives and research, he reached out via email to all the dealers in approximately an hour’s drive radius. We’re in southern CA so there are plenty. Then he played them against each other. Ended up with the one closest to home with a “if you can beat X, you have a deal.”

This is the first time we’ve done a trade in, and it wasn’t part of the negotiations as we planned on a private sale. But with the newly found mechanical issues, the effort-reward imbalance made it attractive. Surprisingly the dealer ended up paying us more than the initial quote.

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@Data10, very helpful. And you raise a good point. It is hard to know what effects tariffs will have or how long they will remain in place.

@aMacMom, I have done what your husband did and that @tsbna44 also suggested, but with an extra step. I had my assistant call each dealer within a radius first and explain that her boss was looking to buy a new car but that he would only work with dealers who would agree in writing to pick up his car from his house whenever the car needed service (whether for repairs or regularly scheduled service) and leave a loaner car. Among those who said yes, I got quotes on the specific car and then offered the closest dealer the right to beat the best offer I had. I was not trading in a car. My son took my old car when I bought the new one. I knew about the published discounts but did not know about the trunk money. Hopefully, competition pushed them to use the trunk money, but who knows.

But, really, I thought about my interests and realized that time was one of my most important interests in the negotiation. I would have been happy to pay $2000 more to have someone always pick up and drop off my car so that it was not my problem. So, I made that the table stakes. Then, the negotiation was largely about price.

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You can also play dealers/buyers against each other for selling your used car.

In the past, I’ve sold my old cars via private sale. However, given the poor condition and mechanical issues with my old Acura, I preferred to avoid private sale this time. My best trade in offer with the dealership from which I bought my new car was less than I had hoped, so I compared different options for selling my old car with a wide variety of different dealers and buyers in my area. I was surprised to find that the highest initial offer was from Carvana. After I had that offer from Carvana, I gave dealerships the chance to increase their earlier offer to beat Carvana. A Ford dealership did beat the Carvana offer by a good margin on the day before I had planned for Carvana to pick up my car, in spite of previously saying they could not match the offer. I ended up getting far above KBB value for my old car.

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I tried this in the past with a mint condition sports car that was rarely driven. One of the potential buyers insisted on wearing driving gloves before touching or test driving the car. Wanted to take it to his mechanic to have the car “checked out”. I refused and said we could go to the dealership where, for a fee, their mechanics would inspect the car. Of course, he refused and the potential car parts thief who feared leaving traceable fingerprints was never heard from again.

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Never thought of that! We almost always do private sales, and take a photo of the potential buyer’s license before they test drive/mechanic check.

We did have a big issue in a previous sell when new owner didn’t register the car and had a DUI accident damaging another vehicle. Damaged car owner’s attorney contacted us as owner of record. We had filed file a “Notice of Transfer and Release of Liability” (NRL) with the DMV, but it was a PIA to clear up.

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All I know is my grad school daughter 2004 Lexus ES 330 is still going strong with about 140,000 miles on it. Still drives nice and really needs to get through another year. After that she can get a newer used car :wink:.

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Perhaps better for the buyer and seller to go together to the motor vehicle department to complete all of the vehicle title transfer paperwork there to ensure that nothing is left over after the sale.

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