Happy new year! 2015 shaped up to be a record breaking year for auto sales with 17.5 million cars and trucks sold. With low loan rates and cheap gasoline price, 2016 will likely be another great year to get yourself a new set of wheels! Without further ado, here’s a great car buying tip to start off the year. If you haven’t checked out Truecar.com, you probably should. They provide data on what others have paid for a make and model of car in your area. It brings price transparency to an otherwise opaque car buying market.
TrueCar is especially useful when you want to buy a new car. Simply choose the make and model of the car you are interested in and get a chart like below showing you the average price paid by other people in your area, the factory invoice, and the MSRP.
From this, you get a great idea on how much you can expect to save off the MSRP (manufacturer’s suggested retail price). Never pay the full MSRP but the dealers will want you to! Compare this to shopping for a new car on Autotrader or Cars.com where you’ll most likely get two prices only. One is the MSRP and the other one is a price low enough to lure you in but you’ll have better luck winning the lottery than driving the car off the lot with that price. This is not to say that you’ll be guaranteed a better price if you go to a TrueCar certified dealer. This is more about being an educated buyer so you have the information you need to negotiate with dealers for a better price. That’s why the information provided by TrueCar is so useful because regardless of whether you end up going to a TrueCar certified dealer or not, you can use the information to get yourself a better deal.
If you’re shopping for a used car, TrueCar is not as useful of a tool. You still get a price distribution chart where you see the market average sale price and the high/low sale price but you can probably infer this information after browsing through a few listings in your area. Also the number of used car listings on TrueCar is a fraction of the number of listings on Autotrader and Cars.com and they don’t have listings from private sellers.
TrueCar is not without controversy. It went through a really tough period between 2011 and 2012 where many dealers revolted against it because the price transparency they provided was forcing dealers to cut their price aggresively in order to compete. If you’re interested, read the whole story here. However this is good news for car buyers and more of a reason why you should be using TrueCar as one of your research tool.
One thing to beware of with TrueCar though, users have complained that dealers won’t honor the quote on their savings certificates. Also if you choose to send your contact to the dealer, TrueCar sends it to multiple dealerships so be warned that you will get spammed with offers! You can read more about it here.