How to Navigate the New & Used Car Market

Car buying has never been for the faint of heart. Now, though, there’s a new challenge: inventory! On top of the usual wading through dense disclosures in ads, haggling at the dealership, and securing financing, you have to work a lot harder to find a car!

Why? There are a few reasons, including COVID-caused factory shutdowns, supply chain issues, and the highly publicized microchip shortage. This has led to new car production being drastically reduced. This has had a ripple effect on used cars as well: fewer new car means fewer trade-ins and former rental cars hitting the used market. The result: both new and used car prices have hit an all-time high, with the average selling price of a new car totaling about $45,000.

It's not impossible to get the car you need at a price you can afford! Here are 4 tips to get you through this current car-buying market and into the car you need:

1. Don’t panic! This is not the time to be spontaneous, and it’s also not the time to be anxious or desperate. The car you buy today doesn’t have to be your “forever car”. A well thought-out plan will help you avoid costly mistakes, like paying $5,000 to $15,000 over MSRP for a new car, including hybrids. Yes, current gas prices hurt, but remember, there’s a point at which overspending for your car surpasses your savings at the pump.
    
2. Don’t overpay now! If you need a car, you need a car. We’ve all been there. To avoid overpaying, you need to do some research: find the vehicles that meet your needs, budget, timing, and availability. This includes used cars. Good value today means a lower cost of ownership and easier trade down the road.
    
3. Don’t rely on leasing! Leasing has definitely helped us get into a new car cheaper in the past, but that’s not the case today. Why? Leasing is best when subsidized by the manufacturers. When a manufacturer wants to stimulate sales, they can subsidize the price and lower the finance rate. When there’s a lack of inventory, though, there are virtually no price or finance incentives being applied to leases.
    
4. Don’t go it alone! Auto Advisor is here to help! You know that research mentioned earlier? We do that for you. You tell us the price you’re comfortable with, the make(s) and model(s) of the car you’re interested in, and we get to work. Your Auto Advisor will crunch the numbers, find the car you’re looking for, talk to the dealers, and arrange your test drive – all while keeping you in the loop. We’ll also make recommendations on how to protect yourself in the future, such as adding GAP insurance. This type of insurance protects you in the event your car is lost or totaled – it pays the difference between the insurance claim and the balance you still owe on the loan.

Yes, the shortage of new and used vehicles in the marketplace is being felt by all. However, there ARE vehicles being produced and delivered, and trade-ins being taken every single day. And, AS ALWAYS, our Auto Advisors are here to help our members save time and money on the purchase of new and used cars, while taking advantage of competitive credit union rates and products. All in a safe, efficient, and hassle-free manner.

Talk to an Auto Advisor today!

Category: Car Ownership