About 87 million Americans will be shopping for cars this Labor Day weekend, that’s 23 percent more than Labor Day weekend 2019.
August is usually one of the biggest months of the year for auto sales, especially the weekend of Labor Day. Also, demand now is high now. Some people want to buy personal vehicles instead of taking public transportation due to the covid-19 pandemic. And, others have saved money during the pandemic, so they’re ready to buy.
But, can you get a deal?
A shortage of computer chips is keeping automakers from producing enough cars to meet rising demand. Used cars are scarce, too.
Used car prices are up about 45 percent over the past year, according to an article in the New York Times. New car and truck prices are up about 5 percent over the past year.
So be sure to compare prices and practice your negotiation skills. Also, be prepared to walk away if the best “deal” you can get is beyond your budget.
Some dealers are selling new cars before they arrive at the lot, and some buyers are paying over the asking price to get a car.
Auto sellers will be making more money than usual this year at Labor Day sales, since the average vehicle price is at an all-time high, according to a survey conducted by WalletHub. In July, the average new vehicle price was $41,044.
In addition to comparing prices, other car shopping tips include:
Determine what you can afford. One “rule” is to spend no more than 25 percent of your monthly income on all your cars and their related expenses such as insurance.
Get a preapproved loan before you begin shopping. Check with a credit union, an online lender, or a bank. Be aware that there online loan companies that aren’t reputable. Compare interest rates and terms including length of loan and down payment. Be prepared with this information so you can compare it to what the dealer has to offer.
Research vehicles. Check Consumer Reports’ recommendations for new cars and used cars. A great price isn’t necessarily a good deal if the vehicle doesn’t measure up. Check to see if any recalls on used cars have been repaired.
Take your time during the test drive. See how the car handles on different kinds of roads and in a variety of traffic situations. Check out the controls and the size of the storage space.
Be prepared to bargain. Negotiate the price of a new car and the trade in separately. Know what the base price of the car is. Watch out for add ones. Find out in advance the cost of any extras such as an extended warranty, paint protection, or a prepaid maintenance plan. Make sure what you’re negotiated verbally is part of the written documents.
Good luck. Buying a car is always challenging, and in these pandemic times of shortages, it’s even worse.