Is your rental car ending soon? The other may not be the best option.

Tai Wright | Bloomberg | Getty Images

If you are nearing the end of your car rental period, do not assume that another will be the best for you this time.

While many consumers are shifting from rent to rent, resulting in a change of car every few years, the pandemic has turned the auto industry upside down. As a rule, this means that the calculation of the feasibility of a new lease has changed, experts say.

First, “there is no way to quickly access the car you want,” said Pat Ryan, founder and CEO of the car shopping app. Second pilot… “You can wait three to six months for this.”

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The persistent global shortage of microchips – key components needed to power modern cars – that began last year continues to impede the production of new cars by manufacturers, leading to an excess of demand over supply.

According to JD Power and LMC Automotive’s forecast, the average time a new vehicle is in the dealer’s warehouse prior to sale is 26 days. Two years ago, before the pandemic, there were 62 days left. An estimated 54% of vehicles were sold within 10 days of arriving at dealerships in October.

Due to this imbalance in supply, JD Power / LMC predicted that the average amount paid for a new car was around $ 44,000. That’s 19.3% higher than in October 2020, when the deal averaged $ 36,887.

Part of the reason for record deal prices is that manufacturers have cut their incentives because, generally speaking, they don’t need to offer big discounts on car sales right now.

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 retail price is $ 38,974, up 46% from $ 26,627 two years ago, according to CoPilot.

The good news for renters is that your current car may be worth more than anticipated and gives you the opportunity to capitalize on the difference. Second pilot have a tool for its members, which helps to understand the value.

You are sitting with a profit, but if you surrender it, you will give that profit to the dealer.

Pat Ryan

Founder and CEO of CoPilot

In other words, you can buy out the rent for less than you would pay for the car if it was parked at the dealer’s parking lot right now. This is because the residual value – the value of the car at the end of the lease term – was determined when you signed the lease several years ago.

“You paid for depreciation that wasn’t there,” Ryan said. “You are sitting with a profit, but if you surrender it, you will give that profit to the dealer.”

Plus, the bells and whistles you have on your existing car may not be on the next one, he said. Due to a shortage of chips, some automakers have suspended some features such as driver assistance and monitoring systems or blind spot monitoring.

“You may not get new features on your next car, or even the features you currently have,” Ryan said.

Given the record high car prices, the next lease will reflect this increase, he said.

“We tell our members to buy back and watch,” Ryan said, adding that when stocks eventually return to normal levels, prices can usually be expected to normalize.

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