Nice to see the little Hardtop hanging on. At least some people still want a scrappy new small car, even if it's not exactly fresh.

 

There are some slight indications that the car market is turning in favor of consumers. Slightly.

New car inventories are improving. Some BMW models are selling for below MSRP. Some domestic American manufacturers are beginning to offer small incentives -- usually "in the trunk," meaning directly to dealers rather than cash incentives offered to consumers. But, in some instances, dealers do have a small amount of back end money which will allow them to discount cars... if they have to.

The used car market is a mix. Some auction prices have been rising over the past two months but, compared to the past two years, the wholesale market is softer, though not by much.

The biggest dynamic is the high cost of financing compared to the past few years. With the average new car transaction price dancing around $48,000 (not for MINI, fortunately), it's getting harder for dealers to find consumers who can, or will, go into debt at 7 ~ 10% interest for 7 ~ 8 years for a car that will lose half its value well before it's half-way paid off.

There is some loan subsidizing going on with discounted interest rates, though not much subventing of lease rates is going on in MINI world.

There is ONE dynamic that remains. If you have good credit and express readiness to purchase if "price and terms" are agreeable, there are many dealers who will do a lot more than they would a year ago to close a deal.

My advice is to play it straight, but play hard to get. As in, "I'd really like to say yes to a deal today but we need to do better on the out-the-door price for me to get there." And have a "yes" number in your head that is reasonable, but below MSRP on a new car and on the low end of the current market on a used car.

And remember, $20/month savings on a 60 month car loan is $1,200. So don't give that money away when the salesperson says, "We're only $20 away." You say, "I understand. But that $20 is $1,200 to me and that's $1,200 more than I'm prepared to spend." And then stop talking and see what happens.

Never know until you try.

 

I have been getting mailers from the local Audi dealer offering a $5000 discount off MSRP. Last year they were selling the same cars for $10,000 over MSRP. Times have changed.

 

Yup. And MINI does have Special Offers with $1,000 off and 3.9% financing, with even lower APR for the electric MINI.

Grind hard.

 

I ordered my '22 JCW August 1st '21. I left a deposit and settled on a price. November 30 I get a call that my car is ready to pick up but the price has changed. Nice effing try. I told them that this would be the fifth MINI that I have purchased from your dealership and either stick to the deal or I want my deposit back. In the end, I got my original deal and they deliverd the car to my home. The salesman that called me was a dishonest POS that tried to con me into thinking that I didn't have a contract. Unfortunately, some folks fall for this kind of crap.

 

The important point here is that, when one makes a "deal," that deal needs to be memorialized with more than a hand shake. Email confirmations of price and terms, a deal sheet signed by a sales manager, even a text chain, are all helpful when the sands start to shift.

Also, it is important to fully understand and document what incentives and rates can be locked and what expire at the end of the month.

Wheels within wheels.

 

Auto repossessions are on the rise and lenders are cutting less slack. Cars with loans more than 30 days delinquent are getting snatched.

As Covid forbearance programs expire and fade into history, there are a whole bunch of folks who have been sliding on their rent, their utilities, and their car loans.

You can only live off The Man for so long and then the party is over.

The good news is, if you've achieved and maintained good credit, the car dealer wants to sign you up for a new ride with a new loan.

The bad news is, no more free rides, which, in the long haul, is probably good news for us all.

The question is, where are all those repossessed rides going?? To the auction lot? To the dealer lot? To a bank lot? To the tow lot?

Moral to the story: Don't bite off more debt than you can comfortably chew. Month after month after month.

 

My dealer keeps sending me emails and snail-mail, offering to trade my '22 F56 JCW for a '23 F56 JCW.

Sometimes automating things doesn't make sense.

 

I get messages all the time from my dealership. And half of them think that I am still making payments...

 

Same situation here!

 

Not a great offer, but loyalty is back:

READY FOR ANOTHER MINI? GET UP TO $2,000 OFF YOUR NEXT CUSTOM ORDER.

Available to existing MINI Owners and those who have owned a MINI in the past 12 months. Customer must provide prior MINI VIN to confirm eligibility. Offer is for a custom-ordered new 2024 select MINI models at participating MINI Dealers through 07/04/2023. Must take delivery by 10/02/2023. $1,000 applied against MSRP on 2024 MINI Cooper Models (Excluding Classic trim models). $2,000 applied against MSRP on 2024 MINI Cooper S and JCW models (Excluding MINI Cooper SE, Plug-In Hybrid, and Classic trim models). Cannot be combined with any other current lease, finance or cash offers. Valid on final negotiated price, actual price determined by your authorized MINI dealer. Vehicle must be ordered at participating MINI dealership for future delivery. Cannot be applied towards tax, title, registration, destination, handling or other dealership fees.

 

 

When you build a car on a manufacturer's WEB site, and you register the build and get a build number which can be forwarded to a dealer, the WEB site people (or the AI behind the site) has the ability to suck up a lot of data.

In the most sophisticated iterations of the modern manufacturer sites, dealers can receive info into their Customer Relationship Management packages -- the computer programs dealer use to track customer/potential customer interactions.

There are systems that, when used by dealerships with discipline, can inform sales teams about waaay more stuff than customers may want them to know.

Fortunately, few salespeople have the motivation or discipline to collect and enter all the contact data that these CRMs can scoop up and assimilate.

Example: A dealer group with multiple stores "knows" that Customer X went into one of their dealerships and did some initial negotiations for a $50,000 SUV but balked at the price and payment offer and walked. When that same Customer X walks into another dealership, not realizing the second dealership he is visiting is also owned by the same dealer group that owns the first dealership Customer X visited, and, because a conscientious salesperson at the first dealership loaded the first deal and info about the price point where Customer X balked into the CRM, the salesperson at the second dealership can see the history and use the info to work a deal that, at least at first, appears to address the customer's price pain point.

Also, the oceans of data out there, if scooped up systematically, can give dealers all sorts of useful (to them) info about customers -- driving records, reported accidents and/or documented service issues on your trade-in, car WEB sites you may have visited, credit info that you have not yet authorized the dealer to search...

So, don't lie to a dealer, but assume much more about you is more of an open book than you might think. And don't expect the dealer to reveal what is known about you.

Just let them gather and analyze and scheme as much as they think they can. Let them think they are in total control. But never forget, whatever the dealer thinks is known to them about you will be used to the dealer's best advantage.

But we come in, having done our homework, with numbers clear in our own heads. We know what we can afford and we know what we are willing to pay. And we know how to slow down the game so it doesn't get ahead of us.

The dealer is after all the money. The customer decides how much money to give.

Brave New World.

 

Dealers love to ask: "How are you planning to pay for your new car?"

Don't tell them!

Here are some snappy answers:

In U.S. dollars.
How much are we talking about?
I was hoping my trade would cover the entire cost of the new car I'm considering buying.

Of course, the BEST answer is...

"Once we agree on the out-the door total price I'll be happy to look at all the options you have to offer me."

Variations of the how are you planning to pay line can be:
What do you owe on your current car?
Are you currently buying or leasing?
How long have you been driving your current ride?

The best answer to these questions is to ask the salesperson, "What's that got to do with working out the total out-the door on the car I'm considering acquiring from you?"

When you visit a car dealer, be clear in your mind why you are there, what you hope to accomplish, and what numbers will work for you. Only talk about things that will advance your goals.

The rest is simply numbers. And how you're gonna pay.

 

Sales closers stress the need to "get the handshake," because, when there's a handshake, "we have a deal."

Maybe.

That salesperson's attempt at a handshake is not a gesture of friendship; it's a grab for your wallet and everything in it that can be taken from you.

The BEST response to the offer of a handshake from a car salesperson is to hold your hand out in front of your chest and make the "stop" motion, with your palm facing the salesperson, while slowly, politely, and firmly saying, "We're not at the handshake part yet and I'm not comfortable shaking your hand until we have fully fleshed out a deal, down to the out-the-door price and all the other details. Agreed?"

Seriously. This isn't about the salesperson's feelings. This is a negotiation wherein the salesperson is after all the money and the customer is driving for the best reasonable deal.

Salesperson: "Look, you love the car, you're here. I'm here. My manager is ready to go. Let's do business. Agreed?" And out comes the salesperson's extended hand, going for the handshake.
Customer: Showing the salesperson his/her palm and gesturing "HALT!" while calmly saying, "We're not at the handshake part yet."

Practice in front of a mirror. It's easier than you think.

When you get the deal you want, with all the details written down in front of you, then you can do all the hand shaking and first bumping you want... or not.

 

The best play with a salesman is to turn it around. Shake his hand and when he comes back say, " you know, I just don't feel right, I think I'll walk'.

 

I guess it depends on where one is in the process and what the goal is.

I counsel that walking should never be threatened -- it should only be used when negotiations are at an insurmountable impasse or if the customer determines that there's just too much dishonesty to overcome.

My spouse and I walked once. We thanked the Range Rover dealer representatives for all of their efforts on our behalf and expressed our sincere sorrow and disappointment that they hadn't been able to meet our numbers. As we were walking to our car a sales manager came trotting out after us, waving a piece of paper in his hand, shouting, "I think I've found something that might work for you." We drove home that day in our new Range Rover, with the deal in place as we had wished it. Good feelings all around when it was over. And plenty of hand shaking, at the appropriate moment.

 

I am confused by your answer.

 

I am suggesting that the "best play" may or may not be to walk, depending on where one is in the deal-making process.

 

The "average" new car payment is now over $700/month.

More than ever, it will pay to pay attention to all aspects of any proposed car deal.

Out-the door price
Interest rate/Lease money factor
Itemized prices for any dealer add-ons
No junk fees that are not required by law
No "it's already on the car and we can't take it off" accessories or fabric protector or paint glaze, unless you want them and the price makes sense
No, "sure we can get that payment down by extending the term or increasing your down payment."

The magic power remains in your hands (or feet), as in, "I'm ready to do the deal today but we need to get the out-the-door price down to $X."

If you've told them what your magic number is, and it is reasonable and represents profit for the dealer and a unit moved off the lot, and they let you walk, then, if you really, really want the car, pay mo' dolla and don't you holla! Or not.

 

MINI USA is advertising up to 84 month financing at 3.99%.

This will help get monthly payments down a wee bit, but that's a loooong time to carry a car loan on a depreciating "asset."

And, remember, long loan terms help dealers ease sticker shock pain in a deceptive way. The lower payments conceal the additional interest cost and the high out-the-door price.

Grind on price/Proceed with caution.

3.99% APR FINANCING: Through October 2, 2023, 3.99% APR financing for up to 84 months is available on new 2024 MINI models (Classic Trims excluded), from participating MINI dealers to customers who meet MINI Financial Services, a Division of BMW Financial Services NA, LLC, credit requirements. Not all customers will qualify. Other rates and payment terms available. Length of contract limited. All offers are subject to availability from existing dealer inventory. Visit your authorized MINI Dealer for important details.

 

 

Also of note for people interested in buying a new MINI from dealer inventory, nationally there is a 90 day supply of cars. You might have to search far and wide for a specific desired color/trim combination, but if you are flexible regarding the MINI you crave, thar be deals out there, maties.

 

Dealer's supply of new MINIs has remained at over 90 day's supply.

Remember, after 30 days, the dealers have to pay "flooring" fees -- basically interest on the cost of the inventory that has been sitting on their lots for over 30 days. These costs add up fast and, depending on the flooring plan, as a car sits on a dealer's lot, the pressure builds to get that car off the dealer's books. Some plans require dealers to pay off the flooring loans on cars after 90 days, so that burns cash that dealers want to use for other things, like paying overhead and buying new inventory.

The pressure is on manufacturers to offer greater incentives to assist dealer's in moving inventory -- meaning rebates and other incentives to enable dealers to lower retail selling prices, or to pocket more profit if retail customers roll over and continue paying higher prices.

This can get complicated because used car prices are also doing strange things. Late model, low mileage used cars are holding their value better than older, higher milage cars, but, overall, used car prices are beginning to drift downward. This downward drift is mitigated by increased demand for near-new, low mileage used cars, as potential new car buyers reel from sticker shock and look at used cars as more affordable alternatives to expensive new cars.

If you're in the market for a new or near-new MINI, purchased from a dealer, now, more than ever, scour the web for all the info you can get about rebates, incentives, and recent transaction prices. Become as informed as you can before you negotiate.

Ask your dealer which cars on his lot have been sitting the longest and, if you find one you like, help yourself by helping the dealer move that stale unit off the dealer's inventory and into your garage.

And remember, a special ordered MINI that is delivered immediately upon arrival to a dealer incurs zero flooring cost, so the dealer can discount the car without needing to recover flooring costs.

Do your research, start low, and, as we get into the cold holiday season, with the end of the year upon us, the best incentives and best deals are usually found between Christmas and the last day of December.

Start low, grind hard, and score an unsold MINI and a better price than we have seen in quite a while.

Happy Thanksgiving to all.