Times are tough for folks who need to buy a vehicle right now. The market for both new and used cars continues to be volatile because of supply issues related to the COVID-19 pandemic.
“It’s not for the faint of heart if you’re thinking about buying a vehicle right now, particularly if you’re a new vehicle buyer,” says money expert Clark Howard.
So Clark has some car-buying advice for you that’s nothing like anything he’s advised before. But before you start shopping, consider the following question.
Do You Absolutely Need To Buy a Car Right Now?
With vehicle prices being as inflated as they are right now, Clark wants you to think long and hard about your circumstances. Do you really need another car?
“If you’re just tired of what you have, I will tell you what I’ve been saying for a good while: Keep driving what you have due to the problems in the marketplace.”
A trustworthy mechanic can help you keep that car on the road longer by taking care of the periodic maintenance your car needs. That includes:
- Rotating the tires.
- Getting an oil change.
- Checking the fluids regularly.
If You Really Need To Buy a New Car Right Now, Read This
If you’re trading out one car for another, the small bit of good news is that you’ll get more for your used vehicle than you would in the past because of the inventory shortage. “The prices in the used vehicle market have started to moderate a little,” says Clark, “but they’re not anywhere near where they were [before the pandemic].”
But you’ll also pay a lot more for a used car for the same reasons. And when it comes to new cars, things aren’t much better. According to one report, 80% of new vehicles are being sold above the manufacturer’s suggested retail price (MSPR).
“If eight out of 10 vehicles are being sold above MSPR, what do you do? Do you just roll over?” Clark asks.
Of course not. Cue Clark’s unusual advice for buying a car in this weird market:
“What you do is you shop and even be willing to go farther to buy a new vehicle than you would have in the past,” Clark says.
Yes, Clark is saying you should do some traveling to shop for a better deal.
“So many people are getting on airplanes, making a deal somewhere else in the country, flying somewhere else, taking delivery of the vehicle somewhere else in America and driving it home where they’re not having to pay the big differences,” he says.
Clark says he surprised his wife back in December with a new car for her birthday.
“The differences in price in an area that was about 100 miles in diameter were unbelievable,” he says. “The prices that I was quoted on a vehicle ranged — the difference from the cheapest to the most expensive for the same vehicle equipped virtually identically — $23,500 difference.”
How To Shop Around for a Cheaper Vehicle
The key to finding a cheaper vehicle elsewhere is to let your fingers do the walking on your smartphone or computer.
“What’s great with so many dealers’ online ability now is you can get an actual real quote online,” Clark says.
In addition to browsing dealer websites, here are ways you can reduce the hassle out of shopping for a car while saving money.
1. Use Car-Buying Services
Take an inventory of your memberships to see if an organization you belong to offers car-buying services.
Costco’s Auto Program (also members only) gets high marks from Clark. “The one from Costco is one of the most powerful of all of them. It’s really, really clean,” he says.
2. Check Out Your Local Credit Union
If you find the vehicle you love via a car-buying service, Clark doesn’t want you to use that company’s in-house financing, Instead, finance your car through a credit union, which typically offers lower interest rates.
“I also really like credit unions for car-buying services. You’re going to get a good price on the car, and they’re going to finance it for you.”
3. Arrange To Pick Up Your Car
With the average price to transport a vehicle being upward of $1,200, you may save some money by traveling to pick up your car yourself, flying one way or road-tripping with a friend.
“I was able to shop around and make a huge difference in what I had to pay,” Clark says. “The place I had to drive from was about an hour and 15-minute drive, one way, to get the vehicle and save over $20,000.”
Clark likens the used car market in early 2022 to a roller coaster that rose steeply and quickly.
“We’ve been at the peak of the roller coaster for a few months, and now it’s starting to come down a little bit,” he says. “It’s going to take a while before supply and demand are back in sync and used vehicle prices return to more normal, but they’re going to get there.”