Buying a Car in Today's Market
Buying a car can be overwhelming and stressful. There’s so many decisions to make! Do I get new or used; buy or lease; what are my financing options? Not to mention, what color do I choose? Following are some tips for a successful and low-stress car buying experience, including how to manage the challenges of a high-buyer demand market.
The reality of buying a car in the current market
Since the beginning of the pandemic, there are have been shortages and price hikes for many common household items, such as toilet paper, groceries, electronics, and, unfortunately, cars.
These shortages have resulted in what can be a frustrating market for car buyers. Current challenges in the car market include:
Due to shortages in essential processor chips, as well as other vehicle components, new cars are in short supply
Continued new vehicle shortage(s), make finding preferred models difficult
Used car demand is strong and prices have increased dramatically
For patient consumers, finding a car is difficult, although not impossible, but buyers should be thorough and prepared to buy quickly once that car becomes available to them.
Tips for buying a car NOW
Prearrange financing. Before shopping, figure out your budget and what you can afford to pay monthly. Contact the credit union and find out what dollar amount you will be approved for. You can take a pre-approval letter to the dealership and this will expedite the overall buying process as well as protect you from predatory lending processes.
Expand your geographic search. Especially in a rural market, it may be difficult to find the car you are looking for within your local geography. To find your car and perhaps a better deal, you may need to open your search to a wider market.
Always call to verify the car you want is still available. When shopping from afar, be sure to make contact with a salesperson to ensure the car you are looking at has not already been purchased.
Shop online. Many vehicles are being snatched up the moment they are posted online. If you wait to shop in person, you are likely going to have an even more limited selection.
Be ready to buy! If you are able to find the car you are searching for, be prepared to make a quick decision. If you have done your research on the vehicle as well as have your financing in hand, you can make a deal before you miss out!
Lean on your financial institution
As you shop, consult your financial institution for insight on the process. They can tell you what the car you are looking at is worth, the max amount that can be financed, what your payments will be, what your interest rate will be, and more! Allow them to be your partner and help you get the best deal possible during this unique time!