Ivan Drury has his eye on buying a used car, but not the one many would do, not with about 150,000 miles under his belt.
This silver 2007 Lexus GS350 is the kind of heavily worn car that most motorists would pass up by opting for a new set of wheels. However, those are not times.
Instead of preparing for the big hype of july 4, car dealerships are facing another year with little to sell. Those who have new cars for sale can charge $10,000 or more above the value shown on popular models or take orders for cars. that probably won’t be delivered for weeks. Used car values have declined slightly, but it’s still a seller’s market.
Car buyers are in shock. Forced to return to the factory as the coronavirus pandemic recedes, motorists face not only shocking gas prices, but also emerging interest rates when replacing worn-out vehicles. The effects showing it sold 11 percent fewer used cars than a year ago, but the average selling price rose to $6,300 per vehicle, or 28 percent, over the same consistent period.
The surprise of the stickers resulted in a trauma similar to that of the payment. Shoppers spent an average of $648 a month in the first quarter on a new Array and $503 on a used array, according to Experian Credit Tracker.
However, Drury, as the leading data manager for car purchases in Edmunds. com, tries to apply his wisdom to thwart a horrible market for car buyers. car moment for your family.
“I don’t propose it to everybody,” Drury said. “Go with what you know. You don’t need to roll the dice. “
But for the bold, buying a drummer who can fix their problems until cars are cheaper and more plentiful is one way to save money.
Typically, “miles and status matter a lot more than features,” Drury says, but he’s willing to risk the purchase price (he expects the price of online classified ads to drop to $6,000) based on the images of the online ad that appears. a blank interior.
Taking on a threat about a potential pot is the only strategy to try to beat the system. There are others that can save desperate shoppers money:
To minimize the prices of a vehicle you only plan to own for a few years, consider buying one that’s known for its higher residual values, Drury says. Yes, you can initially pay more out of pocket, but you’ll get a lot more. of her when the time comes for the exchange.
The average new vehicle depreciated 40. 1% in the first five years of ownership, according to iSeeCars. com, which analyzes knowledge about car sales trends. But the vehicle with the most waste, the rugged Jeep Wrangler, lost just 9. 2% over the period. , with Toyota Tacoma and Tundra pickup trucks, Ford Mustang, Chevrolet Corvette and Camaro wasting less than 25% in value.
Labor shortages: Automakers struggle to retain workers and some quit before lunch
Over the past decade, buyers have moved from classic cars to SUVs and pickup trucks. This has been a boon for automakers, as pickups generate higher profit margins. .
Buyers of a popular midsize SUV are unlikely to get a deal, said Brian Moody, editor-in-chief of Autotrader/KBB. Instead, he advises contemplating a midsize sedan “if you can make it work. “
In fact, it’s a car, the venerable and sporty Camaro, that at the top of the iSeeCars list of used cars that have experienced the smallest value changes. The value of the waiter’s list in May only surpassed last year’s $101. on the list through five pickup trucks and SUVs, however, their list is worth more than $1,000.
In a rare and more recent move, General Motors announced it will cut the price of its Chevrolet Bolt electric sedan by $5,900. The new initial value will be $26,595.
Are you an electric vehicle? Here’s what you can expect if you’ve never driven an electric vehicle before.
Instead of going out to order a new car and waiting weeks for it to arrive, try buying what’s on a dealership’s land, Moody said. Whenever possible, be prepared to settle for colors or features that wouldn’t be your first choice.
It also says that qualified used cars can be valid opportunities to buy new cars. They arrive with a warranty, have few kilometers and are regularly less expensive than new cars.
Downsizing: High gas costs are driving buyers to turn to smaller new cars, if they can.
With the Federal Reserve raising interest rates to combat inflation, auto financing rates are rising.
The average rate on a 48-month loan is 4. 62% for a new car and 5. 18% for a used vehicle, Bankrate reports. Both rates have risen more than half a point since January.
One way to reduce monthly car bills is to increase the duration. In the first quarter, the average new car loan lasted 69. 5 months, Experian explains.
But a smarter way, according to Mark Hamrick, a senior economic analyst at Bankrate, is to prequalify for a low-interest loan before going to the dealership to buy a new car to ensure the most productive rate.
Electrified Truck War: Many GM Silverado EV and Ford Lightning Buyers Just Want to Be the First
Ignore the sticker values for a while. Car buyers who for the value of a new car would likely miss the big picture, Hamrick warns.
The charge of owning a car involves much more than the purchase price. A large gas customer who is expensive to insure and prone to common and expensive breakdowns or maintenance will empty a bank account faster than maximum monthly payments.
Your money: Will driving my car in economy mode help me save money?
There is an apparent alternative: wait.
With the pandemic receding, automotive plants are expanding their capacity and semiconductor shortages, which have reduced production, may be alleviated. Then there’s the option of a recession.
“Given the economic uncertainty, unless someone is under pressure to buy a vehicle, they should wait,” Hamrick said.
He to the positive.
“There is a feeling that there will be a lot of supply,” he said. “The war of courage is on the horizon. “
However, for many potential buyers this summer, they may not arrive soon enough.