The price you pay for a car varies, depending on the make and model you want. While manufacturers set an MSRP, what you are going to pay for the car may vary. You will notice that the sticker price varies depending on the dealer you choose to work with.
Dealers rely on what they pay the manufacturers and the location where they sell the car to set the sticker price. Therefore, you have to shop around and negotiate to find the best deal on the car you want.
Dealer Financing
While car prices are flexible, dealers know what they must make to profit. If you choose dealer financing, you could get a better overall price but have to pay a higher interest rate to cover the difference. That can make a car at one dealership cost more than it would at another.
Inconsistent Manufacturer Wholesale Pricing
Manufacturers sell their products to dealers at different prices. How much a dealer pays the manufacturer depends on the relationship between the two companies. For example, the $10,000 difference you see between the new Jeep, Dodge, Chrysler, or Ram for sale at two locations could be due to how long each dealer has been working with the manufacturer. The price dealers pay for vehicles is also due to the incentives and rebates they qualify for.
Consumers cover this price difference. Even when the cars are identical, the dealer that had to pay more for their inventory will charge you more. The MSRP is not your guaranteed price. That means they can wrap up other costs besides inventory in the sticker price.
Different Lenders
When dealers offer financing, they are the middleman, not the final lender. Dealerships work with different lenders, who will offer you different interest rates depending on your credit score.
Different Trade-In Appraisals
If you’re trading in your car, you’ll see that each dealership has a different trade-in offer. Therefore, if you plan to offset the cost of your next car with your trade-in, you’ll find that you get more at some places than you do at others.
Location
Dealerships price cars differently based on specific locations. Higher-income areas see higher sticker prices. Plus, state and local taxes change based on location. This means you’ll have to consider more than comparing fuel economy when picking out your car and where to buy it.
Outside Financing
Your interest rate is a factor that will impact your monthly payments. Since dealerships work with different lenders, the rate you get may vary depending on those circumstances. Also, you overall credit score factors into your rate, so boosting your credit can help to gain a better rate for the car you want to buy.
Shop Around for the Best Deal
There are quite a few reasons that identical cars cost different prices at each dealership. For a great deal, shop around for the car and compare your financing options. With these tips in mind, you can get the right deal for the new or used car you want!