With so much that has transpired in the automotive industry and economy due to the COVID-19 pandemic, you may be wondering if now’s the right time to buy a car. Before we dive into the answer, let’s look at the stats.
Microchip shortages have resulted in limited availability of new vehicles, increasing the demand — and price — of used vehicles. But auto industry experts are seeing a slow decline in new and used car prices, an early sign of recovery.
In a Kelly Blue Book article published earlier this year, Cox Automotive executive analyst Michelle Krebs said that while new vehicle supply is expected to improve, inventory will remain limited for a good portion of the year. “Because of this, we expect prices to remain high for the foreseeable future,” she said. “But car shoppers can rest assured we don’t anticipate any more record highs.”
The same goes for used vehicles.
KBB reported that used cars priced under $10,000 remain in the shortest supply, while vehicles in the $10,000 to $15,000 range are almost as hard to find.
Which brings us back to the initial question — is now the right time to buy a car?
The timing of when to buy a car depends on you — how great your need is for a vehicle and how much you’re willing to pay for a new or used vehicle in today’s market.
If buying a car is high on your priority list, here are a few tips that may help you on your car buying journey:
- Do your research.
Conducting a thorough assessment of needs (e.g., more space, gas efficiency, etc.) will help you narrow your car search and determine which vehicle best suits your needs. In addition, browsing car buying resources such as Kelley Blue Book or Consumer Reports is a good way to gain valuable insight into the features and benefits potential cars have to offer. The more you know beforehand, the more confident you’ll be when it’s time to buy a car.
- Establish a budget and save for a down payment.
Knowing your budget is another important step in the car buying process. Evaluating your monthly expenses (e.g., mortgage or rent, utilities, student loans, cable, and Internet, etc.) can help you determine how much of your budget can be allocated towards a down payment and monthly car expenses. This article provides some great tips on how to save and budget for your car purchase.
- Start your credit approval.
Once you’ve done your research and established a budget, it’s time for you to start shopping around for car financing options. Checking your credit report and credit scores will help give you a better idea about what type of financing you qualify for. If you have a positive credit history, you may qualify to get preapproved for a traditional auto loan or financing. If you have bad credit or are a first-time car buyer with no credit history established, you may qualify for nonprime or subprime financing.
Credit Acceptance is an indirect auto finance company that works with more than 12,000 car dealers across the nation to help credit-challenged car buyers get approved for financing. Once you fill out the form on our website, we will connect you with three enrolled dealers in your local area that can help you start your credit approval to purchase a vehicle.
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