Insider Tips For Buying a Car in this Market with The Car Dealership Guy

The auto industry is experiencing a period of transition, with market demand fluctuating, leasing becoming a key to stability, and tariffs shaping the landscape.

Auto Market Fluctuates: Demand Slows, Prices Decrease, but Stable Overall

The auto market has undergone a series of shifts with a spike in demand followed by a noticeable deceleration.

April-May Market Spike Slowed June-July Due to Affordability Concerns

The market witnessed a significant demand in April and May with high sales, but as June rolled in, a slowdown began with dealers reporting a decrease in their lead-to-sales conversion rates by 10-20%. This slowdown suggests that affordability concerns may be impacting the average consumer. Despite these fluctuations, the market is characterized as stable and healthy, with transaction prices for consumers decreasing.

Vehicle Affordability Improves As Income Weeks Required Drops to High 30s From 43-44 Weeks

There has been an improvement in vehicle affordability as the income weeks required to purchase a vehicle decreased from 42-43 weeks to the high 30s. This improvement does not necessarily indicate that vehicle prices have lowered significantly, but rather that people's earnings have increased over the last two years. Additionally, Yossi Levi points out that electric vehicle (EV) prices have fallen if certain income criteria are met.

Leasing Key to Car Market Stability Amid High Prices

Leasing is emerging as a solution for consumers looking to manage high vehicle costs.

Leasing Offers the Lowest Monthly Payments

Leasing now represents the most affordable monthly payment option for consumers who are mostly shopping by monthly payment. As leasing offers the lowest monthly payments, it has become an attractive choice for many.

Leasing Sales Rise as Consumers Avoid High Vehicle Prices

As more people are deterred by high vehicle prices, leasing as a percentage of all sales is experiencing an uptick. This trend indicates that leasing is becoming an increasingly popular means of obtaining a vehicle without the burden of its full price.

Tariffs Affect Auto Ma ...

Yossi Levi provides several strategies for those looking to get the best deals on vehicles, whether through leasing or purchasing.

Car Lease Shopping Offers Affordable Payments

Leasing a car might be the way to go for affordable payments and a newer vehicle experience.

Research the Best Lease Deals By Focusing On Brands and Models With Incentives and Good Supply

Levi suggests starting with research on the best lease deals, focusing on vehicle classes like SUVs or sedans. Brands like Jeep and Hyundai are currently offering attractive leasing options for their electric vehicles, while others like Toyota might not have as many deals due to a lower supply.

Leasing Avoids High Sticker Prices While Offering a New Car

He further details the benefits of leasing, such as the advantage of lower payments compared to buying and avoiding high sticker prices. Levi highlights that leases are particularly attractive with makes like Jeep, which has lucrative short-term lease options for two to three years, offering the chance to drive a new car regularly without a long-term commitment.

Levi also notes that lease deals can vary by region based on the supply and demand dynamics, with brands like Ford, Audi, GM, and Jeep generally having a higher supply and more likely to offer deals.

Timing Car Purchases Around Month, Quarter, or Year's End Can Lead To Better Deals

Levi discusses the potential benefits of timing car purchases to save more.

Dealers Offer Discounts to Meet Sales Targets

Dealers often have volume goals set by manufacturers and are incentivized to sell a certain number of cars to get a bonus. They might be willing to sell cars at a loss at the end of the month or the quarter to meet these goals and secure the bonus.

Dealers Discount Prior Year Inventory to Clear It With New Model Year Introduction

He also suggests tracking when new models are released, which is a good indicator of when older models will be discounted. As new models come into dealerships, there is a push to clear prior year inventory, often resulting in discounts for models from the previous year.

Partnering With Top Sales Professionals Enhances the Car Buying Experience

Building relationships with reputable sales professionals can greatly enh ...

Levi offers practical advice for consumers looking to negotiate the best deal on their next car purchase or lease, focusing on understanding trade-in value and tax incentives, as well as leveraging transparency and choice in the modern marketplace.

Key to Best Deal: Understanding Trade-In Value

Trade-In Vehicles Boost Consumer Leverage as Dealers Seek Quality Used Inventory

Levi points out that dealerships are eager for quality used inventory, as finding such inventory at auctions is challenging. This need for inventory gives consumers leverage when trading in a vehicle, as dealers can profit from both the new sale and the resale of the trade-in. When a consumer trades in a vehicle, the dealer's potential to resell it for profit can give the consumer negotiation power.

Potential Resale Profit Is a Major Incentive For Dealers, So Factor This Into the Deal

Given that dealers can make a tidy profit from reselling a trade-in vehicle, consumers should remember this fact during negotiations to better leverage their trade-in value.

Tax Incentives and Deductions Impact Vehicle Affordability but Shouldn't Be the Sole Reason For Purchase

Section 179 Tax Benefits Shouldn't Drive Purchase Decisions

Levi and Nicole Lapin discuss the IRS tax code's Section 179, which allows for a significant tax deduction for business-use vehicles weighing over 6,000 pounds. However, the vehicle must be used for business more than 50% of the time. It's crucial to remember that the vehicle's use in business must be genuine and that a new bill under the current administration could allow depreciation against taxes from Section 179 up to 100%. Still, Levi cautions against purchasing a vehicle solely for the sake of the tax write-off and suggests that buyers should not let tax incentives drive their purchasing decisions.

Verify Tax Incentives Before Relying On Them In Car Purchases

The tax credits provided on electric vehicles (up to $7,500 for new and $4,000 for used EVs) are substantial and have contributed to the increasing market share of EVs. However, there is uncertainty regarding the market share once the incentives expire in Q4 of 2025. Additionally, Levi notes that the new auto loan deduction may have limited impact on influencing vehicle sales and that consumers should verify the actual benefit before factoring it into their purchase.

Buying and Le ...