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New-car prices will hit new lows between now and the end of the month as Japanese brands push to reach their sales targets before the end of the Japanese financial year, which is March 31.
March is typically the second-biggest month of the year for new-car sales behind June, the end of the Australian financial year. The good news for car buyers is that the heavy discounting from the Japanese companies also brings down prices across the industry as rivals try to compete.
The profit margins on some cars are so slim that dealers claim they only make money on window tinting -- and finance if arranged through the dealership. Last year, the Toyota Corolla and Nissan Pulsar had their prices wound back by 20 years to $19,990, and others followed.
The Japanese Government has for the past 12 months artificially devalued the Yen to boost exports and keep their car factories running at full capacity. Car companies and dealers refused to comment on-the-record about the "D-word" -- discount -- but a search across the industry found some sharp deals on popular cars.
The cheapest models from Japanese brands are the Suzuki Alto ($11,990 drive-away) and the Mitsubishi Mirage ($12,990 drive-away), both about $3000 off their full recommended retail prices. Despite their bargain prices both five-door hatchbacks come with the latest safety features, including six airbags and stability control.
Meanwhile Suzuki has the cheapest small car below $20,000 with a built-in navigation system: the special edition Swift Navigator is $16,990 drive-away, about $3500 off.
Nissan's website says its Pulsar small car is $22,315 drive-away but we found several dealers prepared to sell one for $18,990 drive-away, more than $3000 off. "We'll sell you a car but there's nothing in it for us," said one Nissan dealer who did not want to be named. "That's a white car with manual transmission and standard-issue number plates." Automatic transmission typically adds $2000, metallic paint adds up to $550 on some brands and, in NSW, premium number plates cost about $60 more than standard-issue plates.
The only people not celebrating the sharp new-car prices are the dealers. "It's not uncommon to not make a dollar on the car," said a Mitsubishi dealer. "We hope to make it back on accessories, finance or when the customer comes back to get the car serviced."
Car dealers typically get a commission of about $1200 on the finance on a $20,000 car -- if the finance is arranged through the dealership. "That's more than the profit on the car," said another dealer. Buyers might also get lucky if the dealer is a few cars short of their monthly sales target.
"Sometimes you'll rip up a car (sell it below cost) in the last one or two days of the month, just to get over the line," said one multi-franchise dealer principal with more than 20 years' experience in the trade. "That sale could mean the difference between getting a big bonus from the factory, or nothing."
The biggest discounts are on the dearest cars. The Nissan 370Z sports-car is now $59,990 drive-away, it was $72,000 plus on-road costs the same time last year, a saving of about $15,000. The Nissan Leaf electric car is now $39,990 drive-away, compared to $51,500 plus on-road costs when it was launched two years ago, a saving of about $14,000 off the full RRP. The Mitsubishi Pajero GLX-R 4WD wagon is now $54,990 drive-away -- it is normally $60,000 drive-away -- but dealers we spoke to said there was at least a further "$1000 to $2000 wriggle room" left in this deal.
For those looking for a family sedan the locally-made Toyota Camry can be bought at a discounted price of $29,990 drive-away with Toyota's 1 per cent finance, about $3000 off the full RRP -- and more than $3000 off the repayments at market interest rates. This deal is unique because, customarily, low interest rate offers apply only to the full RRP of the car, which is how the car companies fund the deal.
In most cases it is cheaper to arrange your own finance and haggle hard on the price of the car. But Toyota has bucked this trend by offering a low interest rate as well as a drive-away price on the Camry to keep the struggling Toyota factory at Altona running.
Meanwhile the Mazda CX-9 Luxury SUV normally sells for $52,980 plus on-roads, but it is now $51,990 drive-away, a saving of about $5000 off the full RRP. But as with the Mitsubishi Pajero deal, Mazda dealers say there is still a further $1000 to $2000 to negotiate off the luxury version of the Mazda CX-9 if buyers sign on the dotted line by the end of the month.
This reporter is on Twitter: @JoshuaDowling