David Paul Morris | Bloomberg | Getty Images
Being in the market for a new car right now is a challenge, to say the least.
Over the Labor Day long weekend, transaction prices remain high. While the three-day period is typically marked when dealerships hold large sales events to clear their lots and make room for next year’s models, low inventory and high consumer demand means cars are sold. Selling requires less incentive.
“It’s a tough environment,” said Kelsey Mays, associate editor at Cars.com. “I don’t think it’s a surprise to buyers, but it doesn’t make the situation any easier.”
Continuing global shortages of microchips – key components needed to run automobiles today – have affected the production of new vehicles by manufacturers, resulting in increased demand. The result is low discounts offered across the board, with some cars selling for more than the sticker price and growing demand in the used car market.
According to research from JD Power and LMC Automotive, dealer inventory is about a third of what it was before the pandemic. The average length of time a new vehicle is immobilized on a dealership’s lot before being sold is estimated at 26 days – the first time recorded in less than 30 days. Two years ago – before the pandemic – it was 62 days.
According to JD Power, the average price paid for a new car is $ 41,378. The average discount – if offered – is around 4.3% of the sticker price. It’s less than half of what it was a year ago.
The move to the used car market couldn’t bring much relief either. According to automotive research firm Edmunds.com, the average price of a used vehicle is $ 27,272. This is 25% higher than the average price of a year ago.
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Still, if you’re in the market for a new car and are hoping to get a good deal, all hope is not lost.
For starters, if you have a trade-in, the overflow demand for used cars can cost more than your estimate. Even vehicles with higher mileage get more: According to Edmunds data, the average amount paid for cars with mileage between 100,000 and 109,999 increased 31% in June to $ 16,489 from to the previous year. was $ 12,626.
So while you may not be able to lower the price of your new car, it is possible to mark up more for your trade-in.
And while the discounts aren’t as generous or extensive as they were over the last Labor Day weekend, there are some promotions that might be worth considering even if they don’t apply to your model. or your favorite brand.
“There are few cars with a decent inventory and reasonable incentives,” Mace said.
For example, according to Cars.com, several versions of the 2021 Chevrolet Equinox are offered with a discount of $ 3,000, or 7% to 11% off the price. Taking this discount into account, the price will be around $ 24,500 to $ 43,000, depending on the finish. This offer expires September 30.
Likewise, the 2021 Buick Enclave’s manufacturer’s rebate of $ 4,250 will translate into a price tag of around $ 37,000 to $ 59,500, depending on specifications.
If you’re struggling to find something suitable nearby, it’s worth expanding your search, Mace said. Some buyers – about a third – are willing to search for the car they want within 100 miles.
Additionally, you may want to consider leasing.
“This is possibly the cheapest way to get into a new vehicle,” said Evan Drury, senior director of Insight for Edmunds.
While leases usually come with mileage restrictions and you can charge for excessive wear and tear, they usually only last a few years. So if you don’t like the car, at least you’re not in debt for five or six years, said Durie.
Also, if you see something you want, don’t wait too long to pursue it.
“If you wait… you will be missed,” Drury said. “We see a lot of cars go by. “
Edmunds data shows that about a third of vehicles are sold within a week of arriving at dealerships. Many even sell the same day of delivery.
“This new car shortage is not expected to be corrected anytime soon,” Durie said.