Oct. 13, 2008 -- If you're not afraid to spend money right now, it could be a great time to buy a car. This is one of those silver linings in clouded times.
"Whenever cars are not selling, the price of cars drops," said Phil Reed of auto buying Web site Edmunds.com. "Salesmen become very motivated."
Normally dealers won't go below the invoice price (the price manufacturers charge them for the car), but times are different right now. When the people at Edmunds went to buy a new vehicle for test-driving purposes, they found they were able to get it for $1,500 below invoice.
As you've no doubt heard, the biggest bargains are on trucks and SUVs, since people are more worried about fuel economy these days. But people are also buying fewer minivans right now, which makes them another good buy. You might also see sales on V6s and other powerful models -- any car that is perceived to be less practical.
By contrast, small cars are selling better, so you will find less price flexibility with those. Edmunds noted that the Honda Fit and Mini Cooper are particularly popular.
Hybrid vehicles were in huge demand over the summer, but interest has dropped a little since then, as gas prices drop. But you will still find waiting lists for the most popular models, like the Toyota Prius and the Honda Civic Hybrid. A hot tip from the car experts at Edmunds: check out the Nissan Altima Hybrid. They say it's a quality car, but just isn't as well known as other mid-sized hybrid cars.
Of course, unless you have a pile of cash under your mattress, you're going to need financing and we've all been hearing how tight credit is.
It's true that some traditional banks have cut back on offering auto loans. But some manufacturer-owned finance companies have actually loosened their standards because, well, they need to sell cars. So it pays to shop around.
Car Dealers: Zero Percent Financing
You will even find some stunners, like the fact Toyota is offering zero-percent financing. Normally the Japanese automaker doesn't have to offer big incentives like that because its cars are so popular.
Just keep in mind that zero-percent deals make juicy advertisements and lure people to the dealer's lot, but not everybody qualifies. Those deals are only available to people with tip top credit. And the bar has been raised as to what constitutes a great credit score -- 680 used to be considered excellent, now lenders would prefer to offer their best interest rates to people who score 720 and above.
So, it's a great time to get a car if you can get a loan.