Even though it’s been over a year since the beginning of the COVID-19 pandemic, we’re still feeling some of the effects on our everyday purchases – and cars are no exception. If you’re in the market for a new car, here are 4 things you should know before you head out to the nearest dealership
1. Shutdowns and shortages are making new car prices skyrocket
Between factory shutdowns and supply chain shortages, new car prices are climbing to record heights. According to Kelly Blue Book, the average price of a new car is around $40,000. A global microchip shortage is also limiting the amount of new cars leaving factories, which drives up prices even further.
2. There’s a shortage of used cars
Since there’s a shortage of new cars due to the microchip shortage, many people are hunting for bargains on used vehicles. Unfortunately, that’s also driving the price of used vehicles, with consumer searches double what they were last year. If you find a car you like, you’ll need to act quickly.
3. Financing is not a good idea
With all the pressures to snatch up a good deal on a car before it’s gone, it can be tempting to fall prey to a car that’s way out of your budget. And while financing may look like a viable option, trust us – it’s not. Going into debt for a vehicle you can’t afford is never worth it, and only robs you of money for your other financial goals.
4. It’s a great time to sell your car
If there’s one silver lining out of the used car shortage, it’s that the market is great for sellers. For the first time, cars are actually appreciating (increasing) in value – and that rarely ever happens. If you’ve got a vehicle that’s outside of your means or you’re looking to downsize, now is a great time to sell or trade in.
Ultimately, a car is meant to get you from point A to point B, and it’s never worth dipping into your hard earned savings or going into debt to get a vehicle. If you’re able to hold out, experts recommend waiting out the shortage until supply and demand balances out.
