All I Want for Christmas...

It's Christmas time, and of course, we're all thinking about the things we want and the things we need. We also are bombarded by ads, deals, and specials telling us to act "act now!" and "take advantage of holiday prices."

Of course, the ads that always catch my eye feature a Mercedes or Lexus sitting in a driveway with a big, red bow on the hood.

Frankly, I see the idea of a car as a gift as pretty unbelievable. But, that's not to say that the idea of a shiny new automobile in December is a myth. You do need to do a little homework, and recognize the limitations of shopping for deals.

Here are some tips, comments, and suggestions if you're planning on testing the waters this holiday season:

1. Be prepared to act fast - There are only two weeks left before New Year's Eve, and many of the best pricing deals will prepare to expire at the end of the month. There's still time, of course, but don't expect to have your choice of options and packages, and brace yourself for a slightly harder sales push.


2. Sign & Drive - These ads are where I usually start first. For anyone who prefers to lease, these deals will promise you "no money up front", and will usually try to minimize the monthly rates to keep costs attractive. Just be sure to notice the smaller print where it says, "not including taxes and fees". Those fees can add around $2,000 depending on the MSRP and state. You can have those fees rolled in to your monthly payment to keep it a true "sign & drive", but expect that move to add an additional $50/month to a typical 36 month lease





Do Your Homework

3. Knowledge is power - I love to be an informed consumer. If you're reading a blog about cars, I take it that you do, too. This can be especially handy when preparing to negotiate pricing. As I mentioned at the top of this post, there are LOTS of advertisements out there for vehicles. Make sure you read them. Know what kinds of offers exist on the car(s) you're considering. Use sources like Edmunds.com to figure out what the car should typically cost, and come up with a reasonable expectation of what you should have to pay. Then, when you sit down with your sales consultant, conveniently "forget" everything you read. Start by asking them their price, and asking if there are any special offers available. They may give you a quote in line with your expectations. But, if they are too high, feel free to push them. Right before you close the deal, you can conveniently "find" an add for bonus cash, referral credits, or competitor bonuses.That way, you make your reasonable deal better.


4. Don't feel guilty - Even the nicest sales guys I've worked with love this one. As the MSRP on the table drops, the sad story about how you're taking money from them gets sadder. They usually point to numbers that make it look like they are taking a bath on the car that you are getting. This is laughable. If they were losing money on a sale, they wouldn't agree to it. But the truth is that any incentives and special offers will be a combination of dealer- and manufacturer-backed incentives. That means that some of the price reduction is getting borne by the dealer, but most likely the lion's share is coming from the manufacturer. They can be rewarded for selling lots of cars, or for selling a certain model. So, my rule is, keep going lower until they say no.


5. What am I getting? - So, why are you being offered a great deal? Well, usually, it's a matter of moving inventory. The more inventory that a dealer needs to move, the more aggressive they are likely to be. You can generally tell how much of an inventory problem exists if you see that a dealer is selling the old models alongside the current edition. By December, the old should all be gone. Another possibility is that the model is due for an extensive refresh in the coming months. That means that by March or April, your car can already be "old news". The effect on you, is that the value of your car will drop - significantly. If you are leasing your car, or you plan to hold your car for more than 5 years, that drop in value should not be a major factor in your decision. But, if you expect to own your car for 5 years or less, don't expect to recover as much from selling your car.

So, in the end, I love buying cars. And December (and even January at times) can be a great time to do it. With a little work, and a little flexibility, you can get a great car at a great price. The trick is to know what it is you want. Otherwise, you'll most likely end up paying what the dealer wants.

Buy what you love

The decision to buy or lease a car is an intensely personal one. We all have our own reasons, and they can range from the emotional ("I like the “swooshy” lines of that car," or "I grew up with a Buick in the garage,") to the purely quantitative (highest MPG, biggest engine displacement). I’m okay with any of these reasons. Except for one. I have seen or heard many examples where people buy a car because they think they have to. These people are ceding their choice for some made-up mandate.

I’ll show you what I mean.

“Buy American”

This is probably my biggest pet peeve.

In the days following 9/11, a national mandate went around to support America by consuming American-made goods. This was a good idea. But more than a decade later, this mentality still has a foothold in some circles when looking at cars.

I’m going to start off and say that I don’t criticize anyone for buying a Chevy or a Ford. It’s the people who say, “I bought my Chevy to support America,” that drive me crazy. What they are effectively saying is that they look at a Ford Fusion and a Honda Accord, two cars that are comparable in almost every discernible category, and decide that the Ford is superior because it is “made in the USA.”

The problem is that it’s not. In fact, I look at these two cars and say that my money does more for America by buying the Accord, a car made in America, by American workers in the American Heartland (Marysville, Ohio) with parts that are sourced in America. Look at the sticker on that Fusion. It might as well say “hecho en Mexico.”  If you buy the car, you make sure that a factory employing Mexican workers stays open and Mexican parts suppliers can continue to operate. The only Americans that benefit from this sale are the shareholders who own Ford stock and the dealership that sold you the car.

Plenty of American cars are truly 100% American. And, likewise many cars sold under foreign nameplates are produced outside of the US. But, it really shouldn’t matter. I don’t buy my cars to make others happy, and I hope no one else does, either.

 “4 wheels are better than 2”

I’ve lived in the northeast for a long time. We know what a nor’easter means, and we coined the phrase “black ice”. When I got my license back in the 90’s, I learned how to drive in nasty weather, and have kept the lessons learned from back in the day with me. But with the increasing prevalence of all-wheel drive (AWD) cars, some people believe that they have found the cure for bad weather.

When a friend was preparing to buy a new car this summer, the requirements he listed were: Under $30K, heated seats, good cruising range, sedan, and AWD. Check, check, check, check….wait a second.

There are many more AWD cars on the market than there used to be, that’s true. But when you try to find sedans under $30K with AWD, you’ll find in a hurry that it’s slim pickins. What my friend was left with was a Subaru Legacy, a Fusion AWD that wasn’t available anyway, and a Mini Countryman. After driving the two that were available, he wasn’t happy. His options were to buy a car that didn’t make him happy or stretch and spend too much money to get something from Audi or BMW.

I made a radical suggestion: Skip the all-wheel drive.

I offered that by getting a front-wheel drive (FWD) sedan, he could have all the features he wanted for the price he wanted, and had the option of getting winter tires to handle the nasty weather. While he was skeptical at first, it didn’t take long before he was visiting an Acura dealership, testing a FWD TSX.

A basic Google search on winter tires will tell any interested person that these tires are designed not just for snow, but for colder temperatures and bad road conditions. They make the claim of offering more stability than AWD on traditional all-weather tires, and the ability to grip nearly as well in deep snow.

This week, my friend had his snow tires, mounted to a second set of wheels, put on his car. The total cost was about $1600 – less than the typical cost of upgrading from FWD to AWD (think BMW 3-series).  I’ll be curious to see how it goes. But the moral of the story is that he is driving a car that he enjoys and still finding that all of his basic needs were met.