Don't Wait to Buy a New Car

If you've been considering a new car purchase, it's time to get moving. You may never have a better opportunity to negotiate a great deal than you'll see this fall.

The reasons are simple: automakers overbuilt, and have been working to sell off an oversupply of cars. They've cut prices with impressive cash-back rebates, and offered interest-free financing to every buyer they can convince lenders to consider. Those steps have started to pay off. The oversupply is shrinking, and car companies can see a day when their prospects improve -- a day when they can charge you more.

Jesse Toprak, Vice President of Industry Trends for TrueCar.com, sums it up: "Looking at the data for the last ten years," he says, "now is the best time to buy."

Prices Rising Soon

TrueCar studies the prices Americans pay for cars -- not what manufacturers print on the sticker, but the final transaction price consumers actually pay. The company has tracked a decline in transaction prices for virtually all segments of the market in 2009, but doesn't expect the trend to last much longer. "We expect to see prices start stabilizing soon," Toprak says, "and we may see price increases in 2010."  

Editor's note: You can find TrueCar prices on this website. Use the Find a Car tool in the upper right of this page to go to a vehicle's homepage, then click on the Prices tab.

Too Many Cars...But Not For Long

Americans bought more than 16 million shiny new cars in 2007. In 2008, as the market sank, we bought just over 13 million. This year, industry analysts say, we may buy fewer than 11 million new cars.

The auto industry, however, simply built more cars this year than recession-weary Americans have been prepared to buy. The sales frenzy triggered by the Cash for Clunkers program and long summer shutdowns at many factories have helped to correct the problem somewhat. But car companies are still left with excess inventory of some 2009 cars and trucks.

Those interested in a large car, a truck or an SUV will find the best selection. But even buyers looking for a fuel-efficient small car might want to move quickly. While gas-sipping models have sold well in recent months, Toprak notes, manufacturers aren't likely to overbuild and end up with another glut of new cars anytime soon. Waiting won't do anything but send you in to negotiate with a dealership that doesn't need your business as badly as they do today. "They're learning lessons in how to optimize inventory," TrueCar's Toprak says. "They got themselves into trouble with oversupply," but "they're learning how to avoid that problem in the future."

[See the Best Car Deals available this month]

Incentives Dropping

When you have too many cars to sell, and recession-battered consumers aren't buying, how do you lure them back into showrooms? With aggressive rebates and incentives. Virtually every automaker has made it through 2009 by offering hefty cash-back rebates and interest-free financing. Several foreign automakers began offering aggressive lease deals.  These are trends, Toprak says, that will come to an end in a matter of months.

Most of the attractive deals offered today are on 2009 models. But since cash-strapped automakers haven't done many significant redesigns, in many cases those 2009 cars are virtually identical to the more expensive 2010s that have begun arriving at local dealerships. But the 2009 models are more heavily discounted because dealerships need to move them to eliminate their oversupply problems. "Incentives will drop," Toprak says, "when the 2009s are sold out." That will happen, he estimates, "Probably in the first quarter of 2010. Over the next few months, we're still going to see some great deals."

Shoppers, however, may not want to wait a few months. Toprak notes that prices may continue to decline -- we may even see holiday-themed sales soon -- but he still advises those on the fence to consider buying in October or November because the most desirable cars may not be available when prices are at their lowest. "You can wait until December to get the largest total discount," he says, "but then the chances of finding the car you want are low. You might get a greater discount in December, but that's like going to the supermarket and getting the fruit at the bottom of the basket. There's a reason those cars haven't sold" earlier in the year, he says.

Looking Beyond the Usual Suspects

You might also want to consider a car from a manufacturer you dismissed in earlier years. While buyers concerned about resale value might have gravitated toward Honda and Toyota dealerships in years past, Toprak notes, the improving reputations of some other automakers make that a less significant concern today. "We're going to see continued improvements in Ford and GM resale values," Toprak says. The companies "are sending fewer cars to fleet and rental sales, which has a huge impact on the resale value of domestic cars."

Chrysler, he notes, still has yet to prove its long-term stability to many observers...and TrueCar doesn't project an improvement in the resale value of most Chrysler products anytime soon. Industry observers believe Hyundai has also made strides in improving its reputation during the recession, and could prove a better long-term value than in the past.

[If you're in the market for a new car, be sure to Get Price Quotes From Multiple Dealers Near You to make sure you get the best deal in your local area.]