Why Is Now a Terrible Time to Buy a Car and How Long Should You Wait
As prices for new and used cars skyrocket due to scarcity , you may want to reconsider your car buying plans and try again later – at least until the end of summer or whenever supply rises again. Otherwise, you really have to do your research to get the best deal, as you will be faced with higher prices and fewer choices.
The car shortage has raised prices
The shutdown of factories at the start of the pandemic resulted in a microchip shortage that slowed production of new cars, resulting in a 64% reduction in inventories at dealerships across the country from a year ago. You may have noticed fewer cars on dealer lots – the average number of new cars on dealer lots is trending towards a low of 30, well below the historical norm of at least 60, according to Cox Automotive. According to the Kelley Blue Book , the average car price on the list in April was $ 39,833, up 7.9% from the 2019 comparable.
The shortage, coupled with increased demand, has affected the used car market: according tothe CarGurus price index, the average price is now almost $ 24,000, which is 27% more than last May (pickups are in the highest demand with prices jumped 40.6% ).
Refrain from buying a car right now if you don’t really need it
As Matt DeLorenzo, senior managing editor of the Kelley Blue Book explains :
Simply put, you cannot buy what is not. At this point, buyers who are waiting to buy a car probably should, but for those who cannot afford to wait, it is more important than ever to shop wisely.
But how long will these prices last? Nobody knows for sure – auto companies expect shortages to widen over the summer, after which supplies are expected to resume. However, some manufacturers are offering longer time frames, possibly by early 2023 . Of course, predicting future prices is not easy either, but it is reasonable to assume that scarcity will drive prices up and that scarcity will not last forever.
Either way, you should close the deal at the right time for you based on your circumstances (some people don’t mind overspending, and that’s okay too). Just make sure you consider your options: for example, if you are already renting a car, consider extending the lease if you are already happy with the car, as you can lock in your current monthly rate by buying more time to evaluate the market. Another possibility is swapping your current car, as getting money from overpriced used cars can pay off the price of a new car.
If you buy, research
Before buying explore price on sites such as Autotrader , KBB , Cars.com , CarGurus.com and TrueCar , because they will give you a clear idea of where the market is. According to Kiplinger , these sites will offer ratings or labels based on algorithms such as “Great Deal” or “Overpriced”. Plus, most sites have nationwide listings, so consider expanding your search to other states as well – if you find a deal with a vehicle hundreds of miles away, it could still save you money by spending a few hundred extra dollars on your flight. dealer and take him home ( as some people do ).
For more tips read this Jalopnik post . Plus, Clark.com has some helpful tips on the best time of day, week, and month to buy a car that are worth checking out.