Market Shifts Means Discounts On Suvs

While dealerships typically maintain an inventory of around 60 days' worth of supply, a notable surplus of SUVs lingers on their lots, prompting eye-catching discounts across the US (1). These discounts are putting SUVs in the driveways of many Americans who didn't think it possible.

Why Deals Are Skyrocketing

Economic downturns or recessions usher in a period of financial prudence for consumers, reshaping their spending habits and priorities. (1) Amidst tightened budgets and job insecurities, major purchases like new SUVs often lose their appeal as individuals opt for essential expenditures over discretionary ones. This shift in consumer behavior results in decreased demand for SUVs, as prospective buyers hesitate to commit to long-term financial obligations such as auto loans. Consequently, dealerships find themselves grappling with an excess inventory of SUVs, necessitating strategic pricing maneuvers to stimulate sales and alleviate the burden of surplus stock.

Manufacturers, buoyed by historical SUV sales trends, have historically ramped up production to meet anticipated demand. However, this optimistic approach occasionally leads to overestimation, resulting in a surplus of inventory as sales fail to meet projections. The resultant oversupply of SUVs inundates dealerships, prompting manufacturers to collaborate closely with retailers to implement enticing discounts and help in a bid to clear out excess stock and maintain profitability amidst fluctuating market conditions.

Global supply chain disruptions further compound the challenge of managing SUV inventory levels. Delays in the availability of specific parts and components can hinder production schedules, forcing manufacturers to make tough decisions about proceeding with vehicle assembly without certain features. This can inadvertently contribute to an oversupply of incomplete SUVs, exacerbating the issue of surplus inventory at dealerships nationwide. Additionally, the volatility of fuel prices plays a pivotal role in shaping consumer preferences, with sharp increases prompting individuals to gravitate towards smaller, more fuel-efficient vehicles, leaving larger SUVs languishing on dealership lots awaiting eager buyers.

Taking Advantage of Dealerships Having So Many SUVs

1. Tips for Negotiating With Dealerships

Before negotiating, know the SUV's true market value. Research online pricing tools and compare prices across various dealerships. An informed buyer can confidently negotiate and discern between genuine offers and inflated prices.

The strongest negotiation tool is the ability to walk away. Dealers are keen to make a sale. If they sense your indifference or willingness to explore other options, they might offer better terms or discounts to close the deal.

2. a good Times to Buy

Buying an SUV at the fiscal year-end can offer great discounts. Dealerships aim to meet annual sales targets and clear out old inventory, making them more amenable to haggling and offering sweeteners to incentivize a purchase.

Dealerships need to clear space for incoming new models, so they're likely to reduce prices on current stock. Stay updated on upcoming car launches and visit dealerships a month or two prior for potentially significant discounts.

3. Checking Online Platforms for Inventory Deals

Some websites specialize in tracking vehicle inventories, providing a list of dealerships with excess stock. This information can give you an edge, enabling you to target dealers more likely to negotiate on prices.

Various mobile apps tie-up with dealerships to offer exclusive promotions and discounts. These apps might have special deals on SUVs, offering both price reductions and added perks, making your purchase even more value-packed.

Down Payment Needed for New Cars

When purchasing a new SUV, most buyers will need to make some form of down payment unless they have the full cash amount available upfront. (3) A typical down payment recommendation is around 20% of the vehicle's price, although lower amounts are often accepted. For example, if an SUV costs the ideal down payment would be. However, many lenders allow much lower down payments, even as little as 10% or in this case.

Down payments 20% usually result in higher finance charges over the loan's lifetime, but financing is an excellent option for those unable to cover the entire cost upfront. Some dealerships may offer special promotions requiring only a small down payment like or less to secure attractive financing rates on certain models. Ultimately, the down payment amount depends on your budget, the vehicle price, and negotiating with the dealer for terms aligning with your financing needs.

Navigating the Market for Used Cars

For those on a tighter budget, the used car market presents an abundance of options priced under. Cars.com and CarMax.com enable filtering certified pre-owned and dealer inventory by price range, make, model, and location. (2) These platforms often provide vehicle history reports and pricing analytics to ensure a well-informed purchase. When exploring the used market, it's crucial to have a mechanic inspect any prospective car, as repair costs for older, high-mileage vehicles can add up quickly.

Strategies for Finding a good Deals

For car shoppers in 2024, understanding these market conditions opens up opportunities to find great deals. To truly capitalize on the current offerings, you must research all the options in your area. Since deals are location, dealer, and model specific, they can vary, but with some research and patience, you're bound to score a deal.