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If you're trying to buy a car right now, congratulations! Between sparse inventory and higher prices, the car buying landscape is far different than a few years ago.
There are many tips online for getting the best deal when buying a car, but most of those strategies are irrelevant in this market. The past few years have seen unforeseen changes in the market and the economy, causing the car market to shift in response.
To help, here are five ways car buying has changed in the last two years.
Invoice pricing is rare
For years, the suggested strategy for buying a car from a dealer was to negotiate from the invoice price. Invoice pricing refers to the price the dealer paid for the car, which is typically several thousand dollars below the manufacturer's suggested retail price (MSRP).
While this strategy was effective at saving some dough before 2020, invoice pricing has become exceedingly rare these days, said Tom McParland of Jalopnik. Dealers don't have the inventory to sell at cost any more, so don't be offended when talk of invoice pricing isn't an option anymore.
Prices are usually fixed
Say goodbye to the sly negotiation tactics you used to secure your 1998 Suburban, as dealers are moving toward a no-negotiation price for many of their vehicles.
Deals below the manufacturer's suggested retail price (MSRP) still exist, but they are becoming harder to come by. And, should you find a dealer willing to go below the manufacturer's suggested retail price, the discount probably won't be as significant as it would have been two years ago.
Edmunds.com reported that in January of 2022, "Buyers paid above MSRP in a record 82.2% of all new vehicle purchases, compared to 2.8% in January 2021 and 0.3% in January 2020."
If you don't want to pay extra for your next car, place an order and be prepared to wait.
Online shopping is becoming more popular
The past couple of years have made it easier than ever to buy your next car online. While people were locked up in their homes, dealers figured out how to make online shopping more accessible, easier, and available to more people. The result? Nearly 30% of new car sales in 2020 (in the United States) were completed online, said Alan Haig, an automotive retail consultant in an interview with ABC News.
How big of a shift is that? Before the pandemic, less than 2% of vehicles were purchased online.
Ordering is more the norm
It seems like a distant memory when you could go to a dealer lot and find the exact vehicle you wanted. Now you're lucky if the dealer has the exact model you're looking for — let alone the trim and color you want.
The best way to ensure you get the exact car you want is to place an order. Doing so will put your name on the car right from the factory, built especially for you. While it may not be as convenient as picking a car off the dealer lot, ordering is the best way to get the car you want and at a great price, said Sean Tucker of Kelley Blue Book.
Dealers may never carry large inventories again
Another reason you'll probably custom order your next car is due to dealers shifting their strategy. Just a few years ago, dealers stocked hundreds of new cars on their lot. Now it's likely many dealers will move to a leaner business model, with just a few demo cars on the lot. This model allows dealers to keep their costs lower while selling cars at a price without much negotiation, Tucker told Kelley Blue Book.
If you need help navigating this new world of car shopping, stop by your local Ken Garff dealership. They can help you find the car you want, and make sure you get it for a fair price. For more information and a list of locations, visit their website at KenGarff.com.
