Drivers in the market for a new or pre-owned vehicle over the last couple of years likely discovered that the process of buying a car or truck is as difficult as ever. Prior to and during the COVID-19 pandemic, factory closures, supply chain issues, semiconductor chip shortages, and a bevy of other complications led to fewer vehicles on lots and much higher sticker prices on cars that were on the lot. That has caused people who are on strict budgets to reevaluate priorities and timelines.
According to Ivan Drury, Edmunds’ senior manager of insights, consumers can’t expect to walk into the dealership thinking they’re going to find incentives or bargains right now. Plus, they may not even be able to see or test drive a vehicle they want. That reality makes now a great time for car shoppers to rethink their buying strategies.
Choose a different vehicle class
Tyson Jominy, Vice President of Data and Analytics at J.D. Power, says vehicle inventory in November 2021 reached record lows. Although there has been some improvement in 2022, consumers may still have to make some concessions if they need a vehicle promptly. SUVs and pick-up trucks have been some of the hardest inventory to find. Considering a sedan or even a compact car may be the only way to get a new car quickly.
Wait it out
Those with the luxury of time may continue to wait for inventory to increase and prices to decrease. Tech experts, including Intel CEO Pat Gelsinger, expect chip shortages to persist into 2024. If a person’s vehicle is in good condition, it may be more economical to hold on to it a little longer and do the maintenance required.
Seek out no-markup dealerships
It may take some investigation, but there are certain dealerships that are not adding astronomical markups, also called “market adjustments,” to the costs of their vehicles. These dealers may advertise online, and car buyers can always call ahead to ask about markups.
Take what you can get
Lots filled with a variety of makes, models, colors, and features are no longer the norm. Shoppers will be afforded more flexibility in price if they’re willing to take what’s available.
Check with different lenders
The Federal Reserve increased interest rates in the middle of 2022 and it initially planned to increase rates a few more times throughout the year. People, particularly those who do not have the best credit, can do themselves a favor and shop around at different banks for the best loan rates – the loan may be less costly than what’s offered through the dealership. Also, certified pre-owned vehicles tend to come with promotional interest rates that are lower than the average APR, which makes them a viable alternative.
Vehicles are still expensive and in short supply, necessitating changes to how people buy their cars or trucks.
