It's just plain human nature: Every day, buyers across the country drive their shiny new vehicles off dealership lots, and immediately get the sinking feeling that they could have gotten a better deal somewhere else.
But where would that somewhere be? How about Tampa, Atlanta or Washington, D.C.? Those are the best markets in the country for car shopping. A few other cities, such as San Francisco, Dallas and Los Angeles might have done the trick, too, if a trip to the Eastern seaboard were out of the question. These and a few other metropolitan areas boast the greatest discounts off a vehicle's manufacturer's suggested retail price, according to data analyzed from the Autoblog Best Deal Program.
New vehicle prices in the Tampa-Orlando area, the top discount market, averaged 10 percent below their manufacturer's suggested retail price (MSRP). Prices averaged 9.9 percent below MSRP in the Baltimore-Washington area, and 9.4 percent under MSRP in Atlanta.
The study also found that best states for car shopping were Maryland (with an 8.1 percent discount off MSRP), Virginia (with 7.6 percent) and Florida (with 7.5 percent).
There is a practical use for these figures. Once armed with the data, consumers may decide it's worth their while to drive 100 miles or so for a particular deal. But with the deals topping out mostly on the coasts, it might even make financial sense from time to time to jump on a plane and take delivery of a car 1,000 miles or more from home. Indeed, some people are doing just that.
Top 10 Best Deals Markets
|Los Angeles, CA||9.1%|
|San Francisco, CA||8.1%|
It's possible for consumers to adopt a medium- or long-distance strategy for a simple reason: Dealers in the program commit to a price before buyers show up. In the past, consumers could not count on that, said J.R. Lang, pricing manager at Zag. And without real-time data, they probably wouldn't have known about a good deal in a timely fashion in the first place, he said.
For instance, an eight to 10 percent discount on a Cadillac CTS sedan could certainly justify the plane fare, and perhaps a dinner and a nice hotel room to boot. It could translate into savings of as much as $3,500 off MSRP in the country's most competitive car markets. If you bought a CTS in your hometown for roughly the invoice price of $33,231 to $47,786 -- potentially a good deal in some locales – you would miss out on the extra savings of $1,500 to $2,000 in a more competitive car market.
And if you prefer to stay close to home, the mere knowledge that ?consumers are getting an average discount of 8.8 percent off MSRP in Dallas or Philadelphia could be a bargaining chip in your negotiations with a local dealer.
"If consumers see pricing in other metro markets, they can leverage that information," Lang said.
Discounts On Many Models
For its study, Zag zeroed in on a range of popular cars, price levels and body styles. To be part of the Best Deals program, more than 3,400 participating dealers across the country are required to provide real-time pricing information to the company.
Zag sifted through the data to find pricing for 10 sample vehicles, including the BMW 328i, Cadillac CTS, Chevrolet Traverse, Ford F-150 SuperCrew, Honda Accord sedan, Honda Civic sedan, Hyundai Elantra, Mazda3, Nissan Altima, and Toyota Camry. Given the broad range of models, Zag analysts believe its figures reflect general pricing trends.
The analysts averaged the maximum discounts being offered on the models for its metro-area ranking. For its ranking of states, it?made a calculation based on average vehicle discounts. Either way, the savings end up substantial.
The best metro markets were all areas with lots of dealerships, suggesting that competition between them is a key factor in increasing discounts and lowering prices. "These are areas where dealerships are really competing for business and customers are winning," Karim O'Driscoll, Zag's director of pricing strategy, said.
The study also revealed a surprise. In some cases, the best prices are found on the outer edges of metro areas. The analysts concluded that dealerships there are forced compete aggressively with urban stores that are a relatively short drive away. But in the end, they can offer the best prices because their cost structures are also leaner.
It's no secret that discounts tend to be least available in rural areas, simply because the competition is less intense. "There may not be many BMW dealers out in the most picturesque parts of a state," O'Driscoll said.