By Josh RosenbergFinally, there's good news for new Toyota buyers.
After a long shortage of available inventory caused by the pandemic, which was keeping prices up due to strong demand the last few years, the situation is now turned more in favor of the buyers.
Toyota Increases Price Incentives By 21%
With plenty of cars now on dealer lots, coupled with high interest rates for those financing, which is holding back some business, Toyota has opened up their incentives again. In fact, according to Cox Automotive, the car sale industry authority, as of the end of the first quarter 2024 (March 31, 2024), Toyota has bumped up their incentives by 21%.
So, they have gone from selling cars at prices actually higher than a vehicle's MSRP, the sticker price, to now discounting again through negotiation. And this opens a significant opportunity for buyers once again.
Market Share Has Also Declined
In addition, Toyota’s total market share dipped to 13.8% in the first quarter of 2024, down 1.3 percentage points (or about 10%, which is quite significant). To also put this in prospective, in 2021's equivalent quarter, Toyota’s market share was 15.58%.
This is not to say that these factors indicate business is bad for Toyota. Sales are still strong and up 5% over last year, as the economy has continued to recover from the long-term effects of the pandemic and vehicle inventory has normalized.
But they do indicate there are some chinks in the armor and the proof in the pudding is that they are now discounting once again.
Still, they are not having to discount as much as other automakers because after all, they are "Toyota", an industry leader and there are still plenty of buyers. But "smart and informed" buyers are getting much better deals right now.
How To Get The Best Price In This Environment
So, how do you get the best price in a sales environment where Toyota's business is generally doing fine, but when they are also finally willing to negotiate again?
Well, it won't be from showing up at a dealership and negotiating. That's "old school" and a big mistake in this day and age. These aren't the buyers getting the best prices.
No, the best prices are going to those buyers who are using the available online price and research tools, and most importantly, those getting online quotes from multiple dealers (see "Here's Where To Get The Best Deals" below) before ever setting foot in a dealership.
7 Reasons Why Getting Quotes Works So Well
1. Competition: Dealers will now know they are in a multi-dealer competition for your business and will offer you the best price possible not to lose it, often right upfront.
2. Negotiation Leverage: You can then negotiate further within the competition, if you choose to. More "how to" specifics on this is here at Best Online Negotiating Tactics.
3. Transparency: Requesting quotes from multiple dealerships encourages transparency in pricing. Dealers are more likely to provide clear and competitive quotes when they know they're being compared to other options.
4. Market Price Awareness: By obtaining quotes from multiple dealerships, you gain a better understanding of the market price for the specific car you want. Armed with this knowledge, you can negotiate more effectively and identify when a dealer's offer is above or below the market average.
5. Incentives and Promotions: Different dealerships may offer varying incentives, promotions, or discounts at different times. By obtaining multiple quotes, you can identify which dealership is currently offering the best overall deal.
6. Little Or No Stress: There's little or no stress because you are doing this from the comfort of your own home or office, so there's no sales pressure and the buyer is actually the one in control.
7. Access To Information: You'll have all the resources of the internet at your fingertips, and at your leisure, to evaluate the offers you are getting or research any questions you may have rather than being more limited sitting at a salesperson's desk.
Here's Where To Get The Best Deals:
My two personal favorite free quote services, both of which provide multiple dealer quotes from a single form, in no particular order:
I've found that CarsDirect.com has just massive dealer participation and is super fast and easy, with quick response times as well. And the process there is very self explanatory.
In addition, I also highly recommend Edmunds.com due to their quick and easy format as well. They also provide lots of vehicle research, if needed. There, just enter your make and model, then select the year, and then "Check Availability".
Doing both ensures more dealer competition ... and the more competition, the more prices tend to drop. I normally include dealers within 100 miles to be sure of a brisk competition, but you may have to go further if you are in a more rural area.
They also both have long-standing reputations for helping consumers in what can be a fairly "adversarial" industry. Plus, they require dealers to offer great prices right upfront. Many do. Some a little less so. But generally speaking, they are typically quite competitive right out of the gate.
And of course, you are never under any obligation at any time.
Again, if you like, there are more details on this technique here at Best Online Negotiating Tactics and how to interact with the dealers once you get the quotes.
So to get started, head on over to CarsDirect.com and Edmunds.com and I think you'll find car-buying has never been quite so interesting, and even fun.
When Is The Best Time To Buy A New Toyota? At "The End"
Just remember "The End" ... as in the end of the month, the end of the week, the end of the day, and the end of the model year.
Buying a car at the end of the month, end of the week, end of the day, or end of the model year can potentially be advantageous for negotiation due to a few factors:
End Of The Month: Dealerships often have sales targets and monthly quotas to meet. As the end of the month approaches, they may be more motivated to close deals to meet these targets because of the bonuses they will receive. If they haven't reached their goal yet, this can work in your favor.
End Of The Week: Similarly, sometimes buying late in the day on a Sunday can catch a dealership needing to reach a weekly goal. Again, this can create a sense of urgency for them to make the sale, giving you more leverage in negotiations.
End Of The Day: Going in to finalize a sale just a couple of hours before they close can also create a sense of urgency for the dealer. As their closing time approaches, they may be willing to bend more because they can't count on you returning.
End Of The Model Year: Dealers are often willing to concede more as the new model year vehicles are arriving. They simply need to make room for the new inventory as well as selloff their remaining previous model year vehicles before consumers lose interest and focus in mostly on the latest models.
Remembering "The End" can be a final piece in the lowest new Toyota price puzzle, but it doesn't always work, depending on whether a dealership already has their sales goals well in hand. But it is something to keep in mind as you are evaluating and further negotiating your price quotes (if you choose to).
You can get the quotes anytime you want, but then, if possible, try to wrap things up following one of "The End" situations just in case it leads to a further price drop.
Well, I hope this has been helpful. Have fun turning the tables on dealers with this ... and let me know how you do.
All the best - Josh