Due to the microchip shortage that’s been plaguing automakers the past year, new cars are in short supply, meaning they are increasing in price. While many standard vehicles, like the Toyota Rav and Honda CRV, are especially hard to find and/or overpriced, new luxury cars are expensive right now, too, including BMW X3 and Mercedes GLC. I know this because I reached out to dealerships to buy a new luxury car in this current market. It did not go well because no one would budge on the price. So, should you buy a new car in the current market? Or should you wait until the market improves?
Many experts, like the Wall Street Journal, will tell you to wait until prices decrease. However, there’s no telling when prices will decrease. It all depends on improvements to the microchip situation, and since used car prices are often higher than new car prices these days, buyers are simply buying new cars.
I found out the hard way that luxury car dealerships are not budging on prices — so don’t expect deals any time soon. If you need to buy a new luxury car right now, and have no qualms about paying a high price, by all means, go nuts. But if you want to negotiate the MSRP, you might find resistance from the dealers.
Here’s what happened to me.
Buying a new car in the current market right now
Since I’ve been going on more road trips in nearby destinations lately, I’ve been spending a lot of money on Zipcar (which does come with disadvantages, but overall, it’s stress-free and convenient to use). I decided I should just buy a car since I’ll be using it quite frequently for road trips.
I don’t want a used car, especially since prices are out of control (and often just as high or higher than new cars) so I’m opting for a new car. Honestly, I tried to buy a new luxury car in the current market, which seems crazy because prices are so high, but that falls on the dealerships, which affected my car shopping.
The car I have my eyes set on is the 2021 Mercedes GLB 250. Not only does this luxury vehicle have the box-shaped design I love for an SUV (which is becoming less of an option as cars are more sleek-designed), it has great mileage (23 city/31 highway), amazing tech and roomy interiors.
I’ve spent weeks searching online — Car Guru, Carmax, Carvana, Auto Trader — to find the perfect new 2021 Mercedes GLB 250 that’s equipped with the options I’m looking for, which includes sunroof, heated seats and machiatto beige interior. I’ve found dozens and dozens of this specific car at both nearby dealerships and dealerships far away, like Oklahoma, since you can ship cars these days, yet it’s a challenge to actually buy one. The problem isn’t availability; it’s price.
Dealing with dealerships
One great thing about car shopping these days is that most car buying websites (third party or specific dealership) will include the original MSRP (Manufacturer’s Suggested Retail Price) for the car. You can actually look at the invoice for the car that details all aspects and features, including the options added. The great thing about MSRP is that it shows you the price the dealership paid to purchase the vehicle.
Despite any and all circumstances, the dealership will likely not budge on the MSRP price.
After I reached out to several dealerships to inquire about the 2021 Mercedes GLB they had for sale, the sales person would not go lower than the original MSRP, and some dealerships even charged a bit more than the MSRP with fees.
This is a huge sign that the new car market is incredibly affected with the microchip issue and the used car issue, and dealers are not budging on the original MSRP.
This is a curious situation. In the past, you could easily negotiate a new car MSRP based on market value, how long the car has been on the lot, etc, but based on my experience with four car dealerships, no one is budging on price. Even if you have extremely good negotiating skills, you could be challenged to talk down the price or get a notable deal. It is almost impossible right now to get a deal with a great price while new luxury cars are expensive right now.
Luxury car prices are more expensive than ever — and dealers see dollar signs
So how bad is the current new car market?
I reached out to a dealership in Oklahoma City on a 2021 Mercedes GLB 250 priced at $47,315. Not only did they had this car on the lot for over 200 days, they also had over 26 models of this car on the lot. That’s a lot of inventory, but dealers are only seeing dollar signs based on the new car market.
Luxury dealerships know that new cars are in high demand right now, so they want to take advantage of that.
They will not budge in price.
Let’s talk about my experience with the dealership in Oklahoma City. To reiterate, not only did this dealership have over 26 models of the 2021 Mercedes GLB 250, meaning they have a surplus in stock, the new 2022 Mercedes GLB will be released some time this fall, meaning the 2021 models price will go down.
It would be in the dealer’s best interest to sell the 2021 Mercedes GLB 250 prices at $47,315 with a negotiated deal, even as little as 10 percent off, because it is the best sale they will get. When the new 2022 Mercedes GLB is released, the current 2021 model will lose significant value.
And let me remind you: this dealership has over 26 of these cars in stock on their lot right now, meaning they are having a huge problem selling them. You would think they would budge on the $47,315 MSRP price, but they did not.
In fact, they added a $400 dealer fee to the price. This is normal, but still, it’s insane.
Here’s the twist
The $47,315 2021 Mercedes GLB 250 at this Oklahoma City dealership is a service vehicle (or ‘loaner car’). This means that this specific car I want is used as a loaner vehicle when a customer is servicing their own vehicle.
While this particular 2021 Mercedes GLB 250 is a “new” vehicle, as a service vehicle, it is technically a used car. I found out the car has 4,000 miles on it, and it is an *active* service vehicle, meaning customers are still using it as I type.
Generally, service vehicles are a lot cheaper than new cars that have never been used.
This shows that no matter the situation, dealerships are not budging on new car prices.
Summary
I reached out to four dealerships, and I tried to negotiate the price of the original MSRP on new 2021 Mercedes GLB 250, but none of the dealerships budged.
This just shows that, while used car prices have skyrocketed, new luxury cars are expensive right now, too — and dealers want to keep it that way.
So should you buy a new luxury car anyway?
Listen to the experts and wait it out if you can, especially since new models should be coming out soon, and used car prices are finally (slowly) going down.
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Jimmy Im has traveled to 113 countries, stayed in over 600 hotels and has flown a million airmiles. He lives in New York City.