By Josh RosenbergThe car-buying environment has shifted very significantly for those in the market for a new Honda in recent months ... and in favor of the buyers, finally.
According to the latest available Honda sales statistics, for the quarter ending Dec. 31, 2023, inventories are finally normalizing after the long shortage caused by the pandemic, and this has been a major factor in now giving buyers an upper hand.
Here's the facts:
Honda Has Recently Increased Incentives By 63%
With plenty of cars now on dealer lots, coupled with higher interest rates for those financing, which is holding back some business, Honda has once again turned to incentives, or negotiated discounts.
In fact, according to Cox Automotive, the car sale industry authority, as of Dec. 31, 2023, Honda had increased their incentives by a hefty 63%. And Acura by an even larger 75%.
And based on some unofficial industry feedback I'm getting, I strongly suspect this trend has continued into 2024, and probably even increased as interest rates went up again. We're now in April and the new numbers (through March 31st) should be out soon, and I will report them here.
In terms of dollars and cents, the average new Honda discount from MSRP (sticker price) was increased to $1,471. And what's also interesting is that's just the "average", meaning some buyers are getting even bigger discounts and some are getting much less. This means negotiating tactics clearly have a significant impact. More on the best way to get the best deals shortly.
And the numbers are even better for new Acura shoppers. With slower sales than with the Honda models, Acura has bumped up their incentives a fairly whopping 75%, or an average of $3,156 per vehicle.
Again, this is "average", meaning there are at least some well-informed buyers doing this the right way and getting discounts likely in the $5,000 range.
So, Honda has gone from selling cars at prices actually higher than a vehicle's MSRP, the sticker price, to now discounting again through negotiation. And this opens a significant opportunity for buyers once again.
Increased Inventory
Honda’s inventory is the highest it’s been since before the pandemic, with a 47-day supply of new cars and SUVs. In other words, yes, there is plenty of inventory, indicating more room for negotiation. And again, this is "average". The Honda Accord's supply level, for example, has risen from 30 days in October 2023 to 58 days in December 2023.
These indicators don't mean that Honda is struggling. No, business is good and they're doing just fine. Sales of the Civic and CR-V have been particularly strong.
But they do mean that car-buying for a new Honda or Acura has returned in a significant way back to the norm, where discounts and negotiation is all part of the process, as distasteful as that can be at times.
Still, while Honda is discounting once again, they are not having to offer as much off as many other automakers currently. After all, they are "Honda", an industry leader, and business is still pretty good overall and they are doing well against the competition.
But the fact is, they are still nowhere near their pre-pandemic sales levels and that's where they want to be. And the numbers above also indicate that some "smart and informed" buyers are getting the best deals right now since before the pandemic.
How To Get The Best Price In This Environment
So, how do you get the best price in a sales environment where Honda's business is generally doing fine, but when they are also finally willing to negotiate again to keep it up?
Well, those walking in to a dealership to negotiate will be very unlikely to get the good deals. That's "old school" and a big mistake in this day and age. These aren't the buyers getting the best prices.
No, the biggest discounts are going to those buyers who are using the available online price and research tools, and most importantly, those getting online quotes from multiple dealers before ever setting foot in a dealership.
The Reasons Online Quotes Works So Well
1. Dealer Competition: As soon as they get them, dealers know they are now in a multi-dealer competition for your business and need to offer you the most competitive price to get it, often right upfront.
2. Increased Buyer Leverage: You can then negotiate further if you choose to because you have multiple dealers vying for your business. More "how to" specifics on negotiating onlne with multiple dealers can be found here at Best Online Negotiating Tactics.
3. Transparency: Requesting quotes from multiple dealerships encourages price transparency. Dealers are more likely to provide clear and competitive quotes when they know they're being compared to other options.
4. Market Price Awareness: By getting quotes from multiple dealers, you get a better understanding of the market price for the specific car you are interested in. And with this information, you can negotiate more effectively and know when a dealer's offer is above or below the market average.
5. Incentives and Promotions: It is not unusual for different dealerships to offer varying incentives, promotions, or discounts at different times. By obtaining multiple quotes, you can identify which is offering the best overall deal currently.
6. Very Little Stress: There's little or no stress because you are doing this from the comfort of your own home or office, so there's no sales pressure and the buyer is actually the one in control.
7. Access To Information: You'll have all the resources of the internet at your fingertips to study the offers you are getting or research any questions you may have as opposed to being more limited while sitting at a salesperson's desk.
My Personal Favorite Free Quote Services:
Before getting into the best time to buy a new Honda or Acura, in my experience, here's the best two places to get quick online price quotes in a few clicks. Both provide quotes from multiple dealers from a single form. And it's usually best to use both services because the more dealerships involved, the better it can be for you.
In no particular order:
Edmunds.com, due to their massive dealer participation, quick and easy format, and fast response times. Just put in your make and model, then select the year, and then "Check Availability".
And also CarsDirect.com, which is also free and very fast. Just click on "New Cars", put in your make and model, and then click on "Get A Price Quote".
They both also have long-standing reputations for helping consumers in what can be a fairly "adversarial" industry. Plus, both sites have comprehensive reseach sections, if needed.
Both sites also require participating dealers to offer great prices right upfront. Many do. Some a little less so. But generally speaking, they are typically quite competitive right out of the gate.
And of course, you are never under any obligation at any time.
And fortunately, they both literally take all of about one minute. So to get started, head on over to Edmunds.com and CarsDirect.com and I think you'll find car-buying has never been quite so interesting, and even fun.
When Is The Best Time To Buy A New Toyota? At "The End"
Just remember "The End" ... as in the end of the month, the end of the week, the end of the day, and the end of the model year.
Buying a car at "the end" can potentially be advantageous for negotiation due to several factors:
End Of The Month: Dealerships usually have sales targets and monthly quotas to meet. As the end of the month nears, they are often more motivated to close deals to meet these targets because significant bonuses may be at stake. If they haven't reached their goal yet, this can work in your favor.
End Of The Week: Similarly, sometimes buying late in the day on a Sunday can catch a dealership needing to reach their weekly goal. Again, this can create a sense of urgency for them to finalize a sale, providing you more leverage in negotiations.
End Of The Day: Going in to finalize a sale just a couple of hours before they close can also create a sense of urgency for the dealer. As the closing time approaches, they may be willing to bend more because they can't count on you returning.
End Of The Model Year: Dealers are often willing to concede more as the new model year vehicles are rolling out. They do this because they need to make room for the new inventory as well as selloff their remaining previous model year vehicles before consumers lose interest and focus in mostly on the latest models.
Remembering "The End" can be the final piece in the low new Honda or Acura price strategy, but it doesn't always work, depending on whether a dealership already has their sales goals well in hand. But it is something to keep in mind as you are evaluating and further negotiating your price quotes (if you choose to).
You can get the quotes anytime you want, but then, if possible, try to wrap things up by following one of "The End" situations just in case it leads to a further drop in price.
Well, I hope this has been helpful. Have fun turning the tables on dealers with this ... and let me know how you do.
All the best - Josh