It is difficult to buy a car due to high inflation, support shortages and increasing interest rates. New and used car prices have gone up a lot since the start of the Covid-19 epidemic.
In August, the average price of a new car was $48,301, an all-time high, up almost 10% from last year. With the Federal Reserve expected to raise interest rates soon, a new car is quickly becoming a luxury for a lot of Americans.
There are some signs of hope for those looking to purchase an affordable vehicle. Select looks at how consumers can find the best deals without overspending.
Is it a good idea to buy a car now or wait until next year?
According to Shefska, you should wait to buy a car since prices are going to remain high.
The number of new and unsold cars and trucks remained the same. The numbers are still nowhere near what they used to be, when there were 2.55 million vehicles available in July 2020 or 3.69 million vehicles available in July 2019.
It is going to be a long time before manufacturers can get that number back up, but there are several ways to give yourself a bit of an advantage when it is time to buy your next vehicle.
Track car prices aggressively before you buy
Shefska suggests doing some research on the car you like and searching for other similar vehicles that have recently sold in your area, the more research you do, the better you will feel when you step into a dealership. There are free tools to do this on websites.
Mention the research you did about other local and comparable offers if the dealership pushes back on your price point. Take that research to a different dealer and try again if they press you and don’t give you any wiggle room.
Buyers have leverage for some used vehicles
Shefska says used car prices have been falling since the beginning of the summer. Dealerships will be able to lower their prices due to the decrease in wholesale prices. There was a small spike in the used car price in the summer of 2022.
According to Kelley Blue Book, real savings can be had when it comes to purchasing larger vehicles such as SUVs and pickup trucks since consumers have shifted away from less efficient vehicles. It can be hard to find savings on smaller cars.
Consumers are in the driver’s seat if you’re looking for a pre-owned vehicle. He strongly recommends that shoppers track down vehicles that have been sitting out on the car lot for more than 60 days and that the dealership will be more likely to sell it.
Come to the dealership with financing or cash in hand
Car dealerships make a lot of money by putting their cars with loans on their buildings. You will have more power to negotiate the price of the car down if you finance it from your bank or credit union.
If you own a bank or credit union, you should check to see if they offer auto loans. If you shop online, you can find a lender with the best interest rate and repayment terms.
If you have good to excellent credit, you should consider working with a lender that offers a reasonable annual percentage rate for your auto loan.
There are pros and cons to using a personal loan when buying a car. Select’s personal loan marketplace can be used to compare loans and find the one with the best rates and terms.
Before applying for an auto loan, check your credit score to see if you can get a low-interest loan. There are a number of credit monitoring services that you can use to check and monitor your credit score.
If you are planning on buying a car with cash, it is advisable to put your money in a high-yield savings account, which will give you an above average APY, so you can grow your money quicker. Some of these accounts are some of the best.
The vehicle market will continue to be heavily inflated as long as it does not recover quickly. Shefska says it’s probably best to wait if you don’t need a car right now.
If your budget allows, you can use public transportation more or use ride-share services. If you have to purchase a vehicle this year, make sure you check your credit score and bank account first to make sure you can afford it.
The editorial staff of Select did not approve or endorse any of the opinions, analyses, reviews or recommendations in this article.