1-in-5 Car-Buyers Still Negotiate Based on Monthly Payments
Kelley Blue Book Study of In-Market Car-Buyers Reveals Consumer Views on Vehicle Pricing and Purchasing Strategies
The latest New Vehicle-Buyer Attitude Study, conducted by the marketing research arm of Kelley Blue Book, gauges consumer attitudes toward vehicle pricing and intended purchasing strategies. Research results showed that while half of car-buyers within 120 days of purchasing a new vehicle plan to negotiate their sale starting with the invoice price, 20 percent plan to negotiate based on the monthly payment.
"When negotiating the price of a new vehicle, we at Kelley Blue Book recommend that consumers negotiate the sale based on the total price of the car," said Charlie Vogelheim, executive editor, Kelley Blue Book. "To get the best deal, car-buyers should negotiate the final sales price, the financing and trade-in value as three separate negotiations. In doing so, all parties involved will be clear about each aspect of the deal." Kbb.com, the trusted resource for vehicle information, currently offers tips on car buying, vehicle incentive information, payment calculators to assist in determining payments with specific interest rates and printable pricing information to take to the dealership.
Additional Statistics from the New Vehicle Buyer Attitude Study on Automotive Pricing and Purchasing:
Incentives are still an appealing offer. 41 percent of in-market car-buyers say that zero percent financing is the most appealing incentive when purchasing a new car. 25 percent of shoppers found low monthly payments most appealing, 18 percent felt paying $500 over invoice was the most attractive incentive and 17 percent liked the idea of a rebate equal to 10 percent of the car's price best.
Six out of 10 car-buyers would rather have a single, set price than negotiate with a dealer. Shoppers who prefer a single set price are more likely to negotiate starting with the dealer invoice price. Car-buyers planning to spend less than $25,000 are slightly more likely to want a single set price.
Approximately two-thirds of buyers feel that "fair" profit for a dealer to make per vehicle is under $1,000 regardless of the price of the car.
The KBB New Vehicle-Buyer Attitude Study on Automotive Pricing and Purchasing was administered via our Web site, the No. 1 Internet site among car-buyers who are within 120 days of purchasing a new vehicle. Survey respondents include only those buying a new car. The study was completed over a four-day period in mid-April 2003 to determine the attitudes and views of consumers towards vehicle incentives, pricing and their negotiation plans prior to purchase.
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