Car Buying Tips: How to Buy a Car during the Pandemic
The pandemic has created waves in the auto industry that may make it difficult to find and purchase cars for a while. The biggest issues car buyers are facing now are low inventory and the high prices that result from increased demand for the few cars that are out there.
This unfortunate situation was created by the pandemic, which forced restrictions on factories that produced vehicles. One of these restrictions was the lack of microprocessors available once production started again. As a result, car lots offered limited options and car buyers had to spend more and work harder to find a new car. Often, they resorted to buying used, which depleted inventory in used lots.
The good news is that chips are back in production, but we’re not out of the woods yet. Why is that? First, production isn’t at 100% and will take some time to get back up to speed. Second, dealerships are low on inventory and it will take some time to fill their lots. A slow return to pre-pandemic inventories means a slow return to pre-pandemic car prices.
So, if you’re thinking about buying a car within the next couple of years, you could find yourself spending more time and money (up to 20% more) on your next car. This could affect your cash flow in the short term and could force you to go upside down on your loan (meaning that you’ll own more on the vehicle than it’s worth).
This may be difficult news if you need a vehicle, but there is hope. With a little research and preparation, you can improve your chances of finding a good deal, even in this difficult car-buying environment.
LOOKING FOR YOUR NEXT CAR?
Use our car finder to see what's available at a dealership near you.
EXPLORE CERTIFIED, PREOWNED OPTIONS
New cars are nice, but they are not necessarily the greatest value. Certified, preowned options can offer greater value because they are in excellent condition but come at a lower cost than new. In order to be certified, a car must be reconditioned and pass through a multi-point inspection to ensure that they are in tip top shape. They often come with extended warranties and other benefits that make them a better deal. They are likely to cost more than a used car that has not been certified, but you don’t have to worry as much about buying someone else’s headache. They are a great place to start in your search.
CONSIDER BUYING A REBUILT CAR
Rebuilt vehicles can be another great low-cost option for today’s car buyer. They are not offered through regular dealerships but are rather sold by the shops that rebuild them. These shops purchase vehicles that have been declared “totaled,” and fix them so that they are good as new. Because they are able to buy the vehicle at a low cost, they can sell them at much lower cost as well. If repaired correctly and with quality parts, some rebuilt cars could be considered better than their counterparts because they tend to have much lower mileage and cost than vehicles of the same age.
TAKE STEPS TO FIND THE BEST DEAL
In addition to finding vehicles that offer the highest value at the lowest cost, you can set yourself up for a better deal by planning and shopping wisely. They require some extra time and attention, but they’re well worth the effort.
Step one: Determine what you need
Before you head into step two, sit down with pen and paper and write down what you NEED in a vehicle and what you WANT.
The things you need are nonnegotiable and going into the dealership with that list will help ensure that you walk out with a vehicle that won’t let you down. For example, if you need four-wheel drive to get to your camp, make sure that’s on the list.
It’s also good to go in with a prioritized list of things you want in a new car. That list will help you choose between two similar vehicles.
Step two: Slow down and research
This is probably the most important step in the car-buying process. It’s not easy to hold off on purchasing the first car you see that has the bells and whistles you want. In this car-buying environment, it’s important to gather information and do your due diligence in researching and comparing options. You can do most of your car shopping and research online before you even head into the dealership. Your research should include the following:
- Check the vehicle’s CARFAX report: If you’re buying used, make sure the car you’re thinking of buying has a clean CARFAX report. This vehicle history report will help you uncover issues with the car before you buy it.
- Pay attention to value: Use a trusted vehicle valuation site to look up your car of choice and make sure you’re getting a good deal. Kelley Blue Book and NADA are two reputable sites.
Step three: Negotiate
If you’ve done your research, you will know the value of your car (per Kelley Blue Book or NADA as noted above). Use this knowledge to negotiate a fair price at the dealership. If you are trading in a car, check the value of that vehicle as well to make sure you’re getting a decent deal on your trade in.
Step four: Protect your investment
In addition to regular car insurance, make sure you are covered for against the unexpected. Consider the purchase of reasonably priced Mechanical Breakdown Insurance. It’s worth shopping around to find a good price for this type of insurance, which will protect you from large mechanical expenses and will likely include rentals and emergency roadside assistance.
OTHER ARTICLES YOU MAY ENJOY:
The views and opinions expressed in this blog are those of the authors and do not necessarily reflect those of VSECU.
About Joshua Dobrovich
Joshua is the consumer lending team lead at VSECU. He supports the consumer lending team in all areas of the lending process and helps members obtain credit and financing to achieve their personal goals. Joshua has an extensive background in automotive. He has been the service manager and, most recently, business manager at The Automaster Honda in Shelburne VT. Joshua and his partner Jennie have two awesome daughters Kyla and Rylin and live in central Vermont.