Black Friday car deals are hard to come by, even when prices drop. Here’s what to expect

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There was a time when Black Friday in car sales meant a spate of big sales events at dealerships whose lots were filled with new vehicles.

Today, with inventories still under pressure from supply chain disruptions, rebates aren’t as generous as they used to be. And most cars still don’t sit on lots for long due to continued demand — meaning dealers don’t have much incentive for car buyers to make the purchase.

However, the situation is slowly easing with modest improvements in inventory on dealer lots as rising interest rates put pressure on affordability.

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“We see a softening in the premium that people pay above that [sticker price]said Ivan Drury, senior manager of insights at Edmunds.

Buyers are paying less over MSRP than before

Last month, buyers paid an average of $46,991 for a new car, which was $230 higher than the median sticker price — the manufacturer’s suggested retail price — of $46,761, according to Edmunds. However, in January, buyers paid $728 above MSRP.

By comparison, in October 2019, the average amount paid for a new car was $37,878, which was $2,653 below the median MSRP of $40,531.

For discounted cars, the average was about $882 in October, according to a joint forecast from JD Power and LMC Automotive. That is 44.7% less than a year ago and marks the sixth straight month below $1,000.

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The average number of days cars sit on dealer lots before being sold was 19 days last month, according to JD Power/LMC’s estimate. That compares to 74 days in October 2019.

And about half of the vehicles (52%) are sold in lots within 10 days of arrival.

Financing deals are resurfacing – with caveats

While rebates remain minimal, financing deals begin to return after several months, Drury said. For buyers with strong credit, 0% financing or low financing (eg 1.9% or 2.9%) is available for some cars.

However, those deals may not allow you to renew the loan beyond three or four years, Drury said. That means you’ll pay less interest overall, but you’ll end up with higher monthly payments.

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For example, financing $40,000 at 2.4% over 36 months results in monthly payments of $1,153, according to data from Edmunds. The total interest paid over the life of the loan would be $1,497.

That compares to financing the same amount for 72 months at 6.9% and paying monthly payments of $680, but paying $8,963 in interest.

Having a car to trade in remains your best bargaining chip for lowering the cost of a new car, Drury said. While used car prices are also softening, values ​​remain high. Average trade-in equity for October was $9,297, which is $598 more than a year ago but $820 lower than the peak in June, according to JD Power/LMC’s forecast.

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