David Paul Morris | Bloomberg | Getty Images
When it comes to buying a new car, this is no ordinary Black Friday.
More difficult to find offers and discounts, which used to be plentiful at this time of year. The persistent global shortage of microchips – key components needed to power modern automobiles – continues to hinder the production of new cars by manufacturers, leading to outstripping demand for supply.
“In any other year, you can find deals,” said Jennifer Newman, editor-in-chief at Cars.com. “It will be limited this year.”
JD Power and LMC Automotive recently estimated that due to the imbalance in supply, the average price paid for a new car was around $ 44,000. That’s 19.3% higher than in October 2020, when the deal averaged $ 36,887.
Consumer demand has also spread to the used car market, which has also driven up their prices. For cars 1 to 3 years old, the average price is $ 38,974, up 46% from $ 26,627 two years ago, according to the CoPilot app.
Part of the reason for the record deal prices is that automakers have cut their incentives because, generally speaking, they don’t need to offer big discounts on car sales right now.
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The manufacturer’s average discount is $ 1,628, an all-time low according to JD Power / LMC estimates. That’s $ 1,871 less than $ 3,499 a year ago, and for the first time on record it was below 4% of the average recommended price.
While deals are few and far between, according to Cars.com, some are noteworthy. This includes a factory discount of $ 1,250 to $ 4,000 on the 2021 Jeep Renegade (depending on location and vehicle specs), which starts at just under $ 25,000. The 2021 Buick Enclave, which starts at around $ 40,000, comes with a $ 3,750 rebate. Both trades expire on November 30th.
Despite continued stock shortages, 63% of buyers on the market say they plan to purchase a new vehicle by the end of the year, according to a survey conducted by Cars.com.
“If you are among them, be prepared for the fact that car prices do not have room to wiggle,” said Ivan Drury, senior manager of analytics at Edmunds.com. Buyers often pay more than the quoted price.
However, you can negotiate the value assigned to the vehicle you are trading.
“Your current car is your trump card,” Drury said. “Dealers want your trade.”
Plus, you can get a good financing deal, he said. Some manufacturers still offer (or close to) 0% financing for certain brands or models to the most creditworthy consumers. Otherwise, according to Experian, the average car loan interest rate is around 4%.
And if you find something you like, it may be wise to act quickly. In the first half of November, Edmunds said 1 in 20 new cars were sold the same day they hit the dealership. Almost a third were sold in the first week and almost half in the first two weeks.
On the other hand, if you can’t find what you really want and you have some flexibility in the timing of your purchase, it might be worth ordering a car rather than buying a batch.
“You can get exactly the car you want,” said Newman of Cars.com. “You may have to wait a bit.”