Should I buy a car now or wait?

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Buying a car remains a challenge in the midst of record high inflation, support deficits and rising interest rates. Since the start of the Covid-19 pandemic, the prices of new and used cars have risen dramatically, leaving buyers limited choices when it comes to finding affordable vehicles.

According to Kelley Blue Book, the average new car price hit an all-time high of $48,301 in August, up nearly 11% from last year. And with another rate hike from the Federal Reserve expected to strike soona new car is quickly becoming a luxury few Americans can afford.

That said, there are still some signs of hope for those looking to buy an affordable vehicle this year. Below, Select takes a closer look at how consumers can find the best deals without spending more than their budget allows.

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How to strategically buy a car in 2022

The real question, of course, is: should you buy a car now or wait until 2023?

Zach Shefska, co-founder and CEO of YAAan advocacy website for car buyers says you should hold off on buying a car because prices will remain high due to low inventory.

According to a recent report from Cox Automotive, the number of available new and unsold vehicles remained stable at 1.09 million. While this was technically a small improvement from last year’s 1.07 million vehicles available, the numbers are far from what they were before the pandemic when there were easily 2.55 million vehicles available in July 2020 or 3. .69 million vehicles available in July 2019.

Unfortunately, Shefska says it will be a long time before manufacturers can get that number back, but there are several ways to give yourself a bit of an edge when it comes time to buy your next vehicle if you just can’t wait any longer.

Aggressively track car prices before you buy

Firstly, Shefska recommends that you do some thorough research on the car you like and look for other similar vehicles that have recently been sold in your area – the more research you do, the more confident you will be when you step into a dealership. You can find free tools to do this on websites like YAA, car gurus and cars.com.

If a dealer pushes your desired price point down, please list the research you’ve done on other local and similar offers. If they continue to pressure you and don’t give you space, consider taking the same investigation to another dealer and try again there.

Buyers Affect Some Used Vehicles

Shefska also says used car prices have fallen since the beginning of the summer and may continue to fall. That’s because wholesale prices have fallen, paving the way for dealers to be able to lower their prices as well. That said, there was a small spike in mid-summer, bringing the average used car price to just over $28,000 in July 2022.

Kelley Blue Book states that real savings can be made when it comes to purchasing larger vehicles such as SUVs and pickup trucks as consumers have moved away from less fully efficient vehicles amid recent spikes in gas prices. Savings on smaller compact cars, on the other hand, can be harder to find.

According to Shefska, when you’re in the market for a used vehicle, the consumer is in the driver’s seat. He strongly advises buyers to track down vehicles that have been sitting in the parking lot for more than 60 days — the longer the car sits there, the more incentive the dealer has to sell it.

Come to the dealer with financing or cash in hand

Car dealers are known to make big profits by tying their cars to loans on their property. By going to a dealer with financing from your local bank or credit union — or cash in hand — you have much more leverage to negotiate the price of the car down.

To find a car loan near you, first check to see if your own bank or credit union offers it. It is also best to shop around online so that you can find a lender with the best available interest rates and repayment terms that will work for you.

If you have good to excellent creditthen consider partnering with one of the following lenders for your car loan as they all offer a reasonable APR or annual percentage rate:

Select has described the advantages and disadvantages of using a personal loan versus a car loan when buying a car. You can check out Select’s personal loan marketplace to compare loans and find the one with the best rates and terms for you.

Before applying for a new car loan, check your credit score to see if you qualify for a loan at a low interest rate. You can also check and monitor your credit score with one of the following credit monitoring services:

Chase Credit Journey

  • Cost

  • Credit bureaus checked

  • Credit scoring model used

  • Dark web scan

  • Identity Theft Insurance

CreditWise® from Capital One

Information about CreditWise has been independently collected by Select and has not been reviewed or provided by Capital One prior to publication.

  • Cost

  • Credit bureaus checked

  • Credit scoring model used

  • Dark web scan

  • identity insurance

American Express® MyCredit Guide

  • Cost

  • Credit bureaus checked

  • Credit scoring model used

  • Dark web scan

  • Identity Theft Insurance

Pros

  • With Score Goals, you can set a desired credit score and get personalized recommendations on the best ways to improve it
  • Has a credit score simulator

cons

  • Checks only one credit bureau report
  • No dark web scans
  • Does not provide identity theft insurance

Finally, if you plan to buy a car with cash, it may be wise to put your money in a high-yield savings account, which offers an above-average APY so you can grow your money a little faster. Select these accounts as one of the best:

LendingClub High Yield Savings

LendingClub Bank, NA, Member FDIC

  • Annual Percentage Yield (APY)

  • Minimum balance

    No minimum balance requirement after $100.00 to open the account

  • Monthly costs

  • Maximum transactions

  • Excessive transaction fees

  • Overdraft Fees

  • Offer a checking account?

  • Offer ATM card?

Marcus by Goldman Sachs High Yield Online Savings

Goldman Sachs Bank USA is a member of the FDIC.

  • Annual Percentage Yield (APY)

  • Minimum balance

    None to open; $1 to earn interest

  • Monthly costs

  • Maximum transactions

    Up to 6 free withdrawals or transfers per statement cycle *The withdrawal limit for a cycle of 6/statements will be lifted during the coronavirus outbreak under Regulation D

  • Excessive transaction fees

  • Overdraft Fees

  • Offer a checking account?

  • Offer ATM card?

What it comes down to:

Editor’s Note: Opinions, analyses, reviews or recommendations in this article are those of the Select editors only, and have not been reviewed, approved or otherwise endorsed by any third party.

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