Car dealers reveal the 9 questions you should always ask yourself before you buy
Buying a car isn’t always the funniest experience.
But with certain tips and tricks, buyers can get through it.
You should always ask about inventory dynamics and incentives.
Most buyers don’t like buying a car – but there are a few ways they can make the experience a little less painful.
From speaking to dealers and industry analysts from Edmunds, JD Power, Kelley Blue Book, TrueCar, Cox and more over the past few months, we’ve compiled the questions consumers might want to ask before making one of their biggest purchases.
What kind of car should I be looking for now?
This could be easy when a buyer knows exactly what they need and want in a vehicle. But if you’re feeling a bit flexible or need some guidance on what type of car to go for next, brand, vehicle type, and inventory will likely all influence your final decision. In today’s market, there are many nuances to consider.
Certain brands are more expensive now than in the past, like BMW. Others, like Hyundai and Buick, are less so. reliability is another important factor to considerand brands like Kia and Chevrolet top the list. The best vehicles for families is also another.
Certain vehicle types like SUVs and pickups are more expensive, while less sought-after sedans and minivans aren’t as expensive.
The inventory is meanwhile on a rocky road. (More on that later.)
What about new car prices this year?
The pandemic has caused prices for new (and used) vehicles to skyrocket in recent years.
Primarily, new car prices aren’t as intimidating as they were during the peak of COVID, but they’re not falling as quickly either.
The average transaction price for a new vehicle $48,763 last month, according to Kelley Blue Book.
Buyers may want avoid certain models if you want the best deal. Maybe they want to see that too The best cars for every budget.
How long do I have to wait to get my car?
Unless a car buyer has many specific features in mind and can drive off a dealer’s lot in any vehicle they find that day, chances are they will be waiting for a car for several months.
But this is the new normal in the world of car buying. That’s what automakers learned during the pandemic Customers are willing to wait and pay more to get the cars they actually want. It’s not untypical to place an order for a new vehicle and the expected delivery window is more than six months away – although that means some Customers hedge their bets.
Should I be worried about the chip shortage?
The chip shortagea consequence of the pandemic and supply and demand problems, has hampered vehicle production in the auto industry for years.
But this supply chain crisis, which affected 11 million vehicles worldwide in 2021 and 4.38 million vehicles in 2022, is beginning to improve.
concerns over the chip shortage stay put, even as automakers blame other industry disruptions as reasons for delays instead.
But the implications of that might be less consequential than others Supply chain constraints affecting automakers’ ability to deliver.
What else happens to the inventory?
Generally speaking, Car buying will never be normal again. Many Automakers trade market share for profits And Prioritizing high-end luxury vehicles over entry-level cars. Meanwhile, from all the demand, traders have learned that they don’t need to have the same amount of inventory on their lots as they did before the pandemic.
Inventory is improving – meaning a dealer might not sell a vehicle the same day it hits its lot – but many brands are still surviving at historically low supply.
Domestic brands like Ford and GM generally had a higher range than other automakers in recent months, with Ford at 60 days, GM at 52 days and Stellantis (the merger of Fiat Chrysler and France’s PSA group) at 68 days in January, according to a Deutsche Bank note. Other brands are nowhere near these values.
Buyers need to beware of the caveats that might come with inventory. Many of the Car brands with more inventory on lots than others may also have higher loan payments.
What incentives or other offers are currently available?
Automakers loved how much they could get for vehicles during the pandemic. That meant all sorts of incentives and Dealer year-end blowout sales were no more.
But Incentives and other deals are beginning to slowly make their way back into the car buying market.
Incentives are still historically low, but they rose to 3% of the average transaction price last month, a 10-month high, according to the Kelley Blue Book. (That’s down from an 8.3% drop in ATP just two years earlier.)
Luxury cars had the highest incentives last month at 6.5%. Vans, on the other hand, had the lowest incentives at less than 1% of the average transaction price.
“Try to take advantage of the attractive prices that manufacturers are offering,” Whitney Yates-Woods, Yates Buick GMC dealership director in Goodyear, Arizona, told Insider. “Make sure you ask if you can qualify for this because pretty much everyone is offering something and you can negotiate a good deal too.”
What about interest and financing?
For shoppers looking for specific vehicle makes and models, the tide has turned for the better.
But explodes Interest rates are the new hurdle for many car buyers. This could disadvantage customers with a lower credit rating in particular.
“The role of a dealer isn’t just to sell them a car, it’s to help them find the lowest possible interest rate, and that applies to both new car dealers and used car dealers. You have the opportunity to work with multiple banks,” said George Chamoun, CEO of digital marketplace ACV.
“Traders spend a lot of time understanding the best interest rates and the different options,” Chamoun said. “Even based on the specific car, a bank may offer a lower interest rate for a certain type of make and model.”
Is there something in the used car market that interests me?
The used car market could be even more complicated for car buyers than the new market at the moment.
The impact of COVID has really impacted the supply and demand of used cars. As a result, far fewer car buyers have chosen to lease a car in recent years. And many who did to lease a car, decided to buy after the end of the contract for fear of not finding a replacement in stock.
This dynamic has had a direct impact on the types of vehicles in the used car market today. Fewer low-mileage vehicles, newer cars are available, and prices are volatile.
In February, Wholesale prices for used vehicles fell 7% year-on-yearbut they were up 4.3% month-on-month, according to Cox’s Manheim Used Vehicle Value Index — the largest month-to-month increase since 2009.
But maybe you can still find some Used cars with the biggest price declines.
Should I make a trade-in?
Given the auto industry’s supply and demand crisis in recent years, car owners could benefit sky high trade-in values.
Unfortunately for today’s buyers, those days could be over.
The average transaction price for a used vehicle peaked at $31,300 in April 2022, according to JD Power. That was $29,226 last month.
Meanwhile, trade-in values peaked at $25,556 in June 2022, but stood at $21,984 in January, down 14%.
But don’t worry: Dealers are still looking for specific trade-ins that meet the needs of their used-car customers. Maybe you’re sitting on one Car with high resale value.
Continue reading the original article Business Insider