You can of course try to just negotiate a lower price factoring in the doc fee.
I don't disagree that this may work for you, but for someone who may be an inexperienced negotiator it could be just another topic of discussion that leads to getting spun around, confused, and taken advantage of. The only number that matters outside of financing is the bottom line. Call it a $20K doc fee and a $30K vehicle, or a $0 doc fee and a $50K vehicle. I'm not interested in discussing anything other than the number I need to put on the cheque. If that number is lower somewhere else for the same commodity product, that's where I'm going.
I received this in an email from my local Ford dealer; I am not in the market for a full size truck:
I just read the new Silverado prices for 2023. They are up 8% in a year! I imagine Ford won't be far behind. That $2,500.00 is not enough to move the needle for me. The XLT F-150 (pretty fully equipped) are now well in the high 50grand mark.
Make sure you get the out the door price before your trade value. Dealerships traditionally use nada not KBB. Make sure you know if you have any additional packages. When I sold cars at a Lexus dealership a guy had a trade in. He was hacked as the sales manager shorted him 8k on the value of his trade. They didn't know his his vehicle had a performance package but it wasn't called a "performance package."
Yeah, you will never see me paying that kind of cash for a commodity piece of junk aluminum can. The middle class people who live near me must be putting themselves into the poor house - or cheating and using a HELOC to pay for the truck. Even with 10K down the payments are $700+ a month for 5 years Then add thousands per year for gas and insurance. An insane cost for personal transportation; but I can understand if you need it for a business. Then you would get a better price for a W/T working with the fleet manager. Hopefully.
My wife is in the process of buying a new 2023 Crosstrek. In-state and former customers of the Dealer get MSRP. Had to put $500- down to reserve incoming inventory approx a month ahead of the anticipated port date. Plus they offered her only $1000 under what she paid for her 2021 Outback trade with 27K miles. Dont liek Subaru? GM had been discounting the Chevy Equinox, a decent vehicle that doesn't get enough respect. Deals can be as good (for cars) as they ever were - especially if you have a valued trade.
I think you hit the nail on the head with this assumption. Many home owners are sitting on massive amounts of equity so........the house is the ATM.
We used a car broker that our credit union provided and we bought a 2022 Toyota Venza at msrp and no dealer fee.
...on the other hand, the Fed has signaled they will be increasing interest rates in at least the near tem, so if you have to finance a vehicle there is an argument to purchase sooner rather later.
When the dealer's lot is full of new cars..............now is not a good time to buy.
Interest rates from credit unions are still low, I'm still seeing 3.5% on a 5 year new car loan. Probably if they raise it a bit more, it probably won't go much higher than a point or two and it won't cost you that much more in interest as opposed to paying several thousand now in dealer markups. For instance a 30k 5 year loan at 3.5 is about $2745 in interest. At 4.5%, that works out to $3499 or an extra $754.
True, but remember many folks have substantial variable interest rate debt (like credit cards or adjustable rate mortgages) so their interest expenses will increase to service their existing debt, then on top of that financing a new vehicle with ever increasing interest rates as well.
But that doesn't really matter because we're just talking about fixed auto rate loans. If they can't afford it in the future, that would be the same situation whether they bought it now or in the future. If they bought it now, they'd just lock themselves into running into trouble in the future. Or their income could increase in the future to account for higher variable rate loans or they would just have to cut expenses. But it's not something I worry about, I just pay cash.
Bingo! ☝
