6.15.21

Tips for Buying a Car in Tough Market

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Consumers auto loans

If it’s time to hit the highway in a new set of wheels, a new or used auto loan from Consumers can help you reach your destination! We’ve got some of the best auto loan rates and affordable payment options across Lower Michigan.

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New or used, there’s a limited supply of cars available for sale. Here’s what you need to know about buying in today’s market.

The domino effect is at work in the car market. A shortage of microchips led to factory shutdowns; that led to fewer new cars available for sale. With limited new cars, people aren’t trading in their old ones, leading to a shortage of used cars for sale. In short, it’s a tough time to buy any car—and prices are up for both new and pre-owned vehicles.

Some market analysts suggest waiting to buy a car until supplies are replenished and the market cools off. When will that be? Estimates range from end of summer until 2023. However, if you can’t wait, here are tips to help you make a smart buy in this tough market.

Expand your search area

With limited stock a widespread problem, expanding your geographic range can help you find the car you really want. Driving an extra 50 or even 100 miles gives you access to more vehicles. In some cases, you might even find a car out of state that’s still a good deal even with delivery costs.

Be flexible

If your heart is set on a certain model or color, you will have a much harder time finding a vehicle. Be open to alternatives, including other brands. The important thing is to take care of your transportation needs now. Later, when the market improves, you can trade in a less-desirable car for something you really love.

Comparison shop online

Use online tools like NADA Guides and Kelley Blue Book in addition to dealer websites for comparing vehicles, prices and features. Armed with current market data, you’ll be able spot good deals and see where you might be able to negotiate.

Don’t expect many incentives

CNBC reports that the average new car discount in May was $2,597—far less than the $4,825 buyers enjoyed a year ago. Don’t be surprised if the final price on a new car isn’t much less than the sticker price.

Take advantage of high trade-in values

One thing working in your favor right now is the higher value of used cars. Just as you’ll shop for the best price on the new or pre-owned car you’re buying, shop for the best deal on your old car. Ask several dealers for a trade-in offer. If the dealer where you find a car to buy doesn’t have the best price, see if they’ll match a competitor’s offer.

Consider a lease

If you really need a to buy a car but can’t find one you like, consider a lease. A lease of 12 to 24 months could be preferable to the longer-term commitment that comes with buying a vehicle.

No one knows how long the shortage will last, but when you find your next vehicle, we’re here to help you finance it with a competitive auto loan for a new or used car.

Consumers provides banking services for more than 100,000 members. If you have banking questions, call us at 800-991-2221. We make it easy to bank how you want, when you want.

Federally insured by NCUA

Consumers auto loans

If it’s time to hit the highway in a new set of wheels, a new or used auto loan from Consumers can help you reach your destination! We’ve got some of the best auto loan rates and affordable payment options across Lower Michigan.

Learn more

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