Savvy shoppers are digging deep for new car deals

When Jitka Dvorak went shopping for a new car to replace her Audi A4, she was shocked.

“It was amazing; it was like a carnival,” says the North Vancouver realtor who is juggling the decision to buy a new Volvo, or perhaps the restyled 2010 Subaru Outback.

Like so many others, Dvorak found dealers anxious to clear out leftover 2009 models now that November has arrived, along with a flood of new 2010s.

But shoppers such as Dvorak, says Paul Timoteo of the new-car pricing service www.carcostcanada.com, are being more careful than ever.

“Sales in Canada are down 15 per cent this year, so I'd say people are digging a lot harder for information and to get the right price,” says Timoteo, whose service sells five new-car price reports for $39.95. The reports include current incentives, finance and lease rates and dealer invoice pricing. Car Cost Canada also provides a dealer referral service.

It is no surprise that in a down market, new-car deals abound.

Indeed, strong brands such as Acura, Honda's luxury brand, have dealer discounts and factory incentives on every single 2009 model in the lineup – and even certain slow-moving 2010s are in showrooms loaded with sweeteners to get buyers to pull the trigger on a deal.

But Canada has suffered recessions before and car sales have slipped in past years, too. So what makes 2009 different? Shoppers are expanding their list of potential choices. At Car Cost Canada, the list of the top 20 most popular models for which pricing reports are requested includes vehicles Timoteo has never seen before in two decades in the business.

Sure, perennial best-sellers such as the Honda Civic and Toyota Corolla remain popular, but savvy shoppers who do mountains of research also appear to be willing to expand their options to include models from Ford, Chevrolet, Hyundai, Mazda and Subaru.

“That list [top 20] we feel is a leading indicator of where the market is going,” Timoteo says. “We have never had an American car on the top 20 list before – other than the [Pontiac] Vibe, which was a rebadged Toyota Matrix,” says Timoteo, noting the Ford F-150 pickup, the Ford Escape small SUV and the Ford Fusion mid-size sedan are all among his 20 most- researched vehicles.

Dvorak is among those doing her homework. She has spent hours gathering feature and pricing information and diligently worked her way through a serious of test drives. Right now, she's leaning toward a Subaru Outback. The 2010 version, she says, surprised her with its quality and driving characteristics, but the real eye-opener was pricing.

Subaru Canada, under pressure to boost sales from its parent, Fuji Heavy Industries, recognized for 2010 that its buyers are some of the most demanding and technologically savvy customers in the auto industry. Those buyers frequently research pricing in the United States and compare it with Canada, too. In the end, the company decided to offer more for less with the revised Outback and its Legacy cousin.

Thus, the basic version of the 2010 Subaru Outback, the 2.5i PZEV ($28,995), is $2,000 less expensive than last year's model and the ritzy Limited 2.5i ($35,795) model is down $3,600. That's for a wagon-y crossover with new styling, more features, tighter handling, a bigger interior and industry-leading safety and quality.

Not surprisingly, Subaru Canada's sales are up more than 8 per cent on the year. With new 2010 Legacy and Outbacks rolling into showrooms for the first time, Subaru's September sales soared a whopping 68.4 per cent.

“Improve your car, lower your price – magic. That formula works every time. Sales go up,” Timoteo says.

That's a truism in the auto industry and, while it's easier said than done, it certainly works. Great deals help juice sales across the board, but great deals on improved products lead to spectacular results.

“Almost without exception, products that have been recently renewed – the Toyota Venza, Matrix and Corolla, Mazda3, etc. – are performing quite well. And products that are getting long on the tooth – Toyota Yaris, Ford Ranger, Honda Accord and Civic, Dodge Grand Caravan, etc. – are underperforming relative to their competitors,” notes Dennis DesRosiers of DesRosiers Automotive Consultants.

“There are exceptions – like when an OEM [original equipment manufacturer] puts serious money on the windshield of any model it will increase sales no matter what the age of the vehicle – for example, the Chevrolet Silverado and GMC Sierra in September. But barring these, there is a close relationship between new-product introductions and sales performance.”

For new-car buyers, the trick is to find the best deal on the right make and model – one that you can live with for eight years. Eight years? That's the average length of time a Canadian holds onto a new vehicle.

“You can get a great deal on a car, but if you hate it, what kind of deal is it, really?” Timoteo asks. “I'm advocating an emotional approach to choosing your next car and an unemotional approach to deciding what and how you're going to pay for it.”

So once you've narrowed down your choices to three or four you'd own and enjoy for eight years, it's time to research deals and do some serious shopping and test-driving. Many auto makers at this time of year have inventories of 2009 models just as 2010s are rolling on to dealer lots and that often signals a buying opportunity.

Also, new-car sales were down 14.3 per cent through the first nine months of this year. Thus, the push is on to sell more than ever. Buyers who research price trends, visit numerous dealers and negotiate assertively can pick up a set of wheels at an impressive discount.

Indeed, auto makers are offering generous deals, including cash-back offers and low financing rates across a wide range of vehicles. Some of the best deals are available on once-hot models, too. For instance, until recently BMW was offering a $4,000 cash incentive to dealers selling leftover 2009 BMW X3 SUVs in a cash purchase. An updated 2010 X3 is arriving soon, so the pressure is on to move any leftover 2009 metal.

Cadillac's slick and sporty 2009 CTS sedan had been available with up to $10,500 in incentives for the buyer able to tap into a $6,000 factory-to-dealer rebate, a $3,000 Cash for Clunkers program, a $1,000 GM Loyalty bonus and a $500 Canadian Forces Appreciation program. These various incentives were set to expire Nov. 2, as all promotions do at some point. New programs usually take their place at the start of each month.

Infiniti, the luxury brand of Nissan Motor, has had a $5,000 incentive on 2009 versions of the E35 luxury compact SUV. Hyundai, until recently, was goosing sales of its 2010 Sonata mid-size car with a $3,500 incentive that could be combined with 0-per-cent financing for up to four years.

And so on and so on. Timoteo and others, however, caution against buying any new vehicle before you are absolutely ready. Regardless of how enticing the deal, always be patient and do your homework.

“At the end of the day, the right time to buy is when you're ready to buy,” Timoteo says.

That's advice a very patient Jitka Dvorak is taking to heart.