David Paul Morris | Bloomberg | Getty Images
Being in the market for a new car right now is a challenge, to say the least.
Looking ahead to Labor Day weekend, transaction prices remain high. While the three-day stretch is usually marked when dealers hold large sales events to leave the batches and make way for next year’s models, low inventory and strong consumer demand make less incentives needed to sell cars.
“It’s a tough environment,” said Kelsey Mays, Cars.com’s writing assistant. “I don’t think it’s a surprise to buyers, but that doesn’t ease the situation.”
The continuing global shortage of microchips, key components needed for current cars to work, has affected the production of new vehicles by manufacturers, which has resulted in demand exceeding supply. The result has been that fewer discounts are offered in general, with some cars being sold for a higher price than the sticker and that demand is spreading in the used vehicle market.
According to research by JD Power and LMC Automotive, dealer inventory is about a third of what was pre-pandemic. It is estimated that the average time for a new vehicle to sit in a dealer lot before selling it is 26 days, the first time it is recorded below 30 days. Two years ago – a prepandemic – 62 days passed.
According to JD Power, the average price paid for a new car is $ 41,378. The average discount (if offered) is approximately 4.3% of the price of the adhesive. That’s less than half of what it was a year ago.
Switching to the used car market may not offer much recovery either. The average price paid for a used vehicle is $ 27,272, according to auto research firm Edmunds.com. This is 25% more than the average price of the previous year.
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Still, if you’re looking for a new car and hoping to get a decent deal, you don’t lose all hope.
For starters, if you have a swap, the value may be higher than you expect due to the flooded demand for used vehicles. Even vehicles with higher mileage get more: the average amount paid for cars with mileage between 100,000 and 109,999 rose 31% in June to $ 16,489 ($ 12,626 the previous year), according to data from Edmunds.
So while you may not be able to lower the price of your new car, you may get more scores for your exchange.
And while the discounts aren’t as generous or widespread as they have been over the past weekdays of Labor Day, there are some special offers that may be worth checking out even if they’re not from your model or brand. favorites.
“There are a few cars with decent inventory and reasonable incentives,” Mays said.
For example, many versions of the 2021 Chevrolet Equinox have a factory discount of $ 3,000, or a 7% to 11% discount on the price, according to Cars.com. Given this discount, the price would range from $ 24,500 to $ 43,000, depending on the adjustment. This offer ends on September 30th.
Similarly, the $ 4,250 discount from the 2021 Buick Enclave manufacturer would result in a price of between $ 37,000 and $ 59,500, according to the details.
If you find it hard to find something suitable nearby, it’s worth expanding your search, Mays said. Some buyers (about a third) are willing to look for a car they want within a 100-mile radius.
This shortage of new vehicles is not expected to rectify any time soon.
Ivan Drury
Edmunds Senior Reporting Manager
Also, you can consider leasing.
“This may be the cheapest way to get into a new vehicle,” said Ivan Drury, Edmunds ’chief information manager.
Although leases often have restrictions on mileage and can be charged for excessive wear and tear, they usually last for a few years. So if you’re not in love with the car, at least you don’t have a five- or six-year loan, Drury said.
Also, if you see something you want, don’t wait too long to chase it.
“If you wait … you’ll lose,” Drury said. “We see cars flying out of the lots.”
About a third of the vehicles are sold within a week of reaching the dealerships, according to Edmunds data. Many even sell on the same day of delivery.
“This lack of new cars is not expected to rectify any time soon,” Drury said.