5 Expert Tips for Car Buying During a Shortage

If you’re looking for a car right now, you may find the process to be a bit harder than usual.

This is because an unprecedented combination of factors has created the perfect storm in today’s car-buying market– the most obvious contributing factor being the coronavirus pandemic.

While vaccine rollout is underway and case numbers are falling in many parts of the world, the pandemic is still very much present… and it’s taking a toll on the global economy.

Second, there are shortages of semiconductors—a vital component in today’s cars.

These shortages have caused supply to fall compared to production levels before the pandemic. Most manufacturers have slowed, or even stopped, production. With a lot of inventory at an all-time low, finding your dream car is like searching for a needle in a haystack. 

The last contributing factor is rising inflation. The pandemic has led to higher prices for many goods and services, while a volatile global economy is causing demand to skyrocket above supply. Gasoline prices have spiked, car prices are steadily rising and buyers are facing increasing pressure to purchase a car before prices rise even higher.

If you’re in the market for a car, whether brand-new or pre-owned, it’s critical to be aware of these trends. Below are five expert tips for buying a car during a shortage.

#1: Explore Your Options

Our first expert tip for navigating the current car-buying market is to explore your options and do your research!

Sure, visiting a car lot to get an idea of what you like is nice, but with such scarce inventory, it’s better to be sure before heading to your local dealership.

Weigh the pros and cons of your different options, including prices and brands or manufacturers. Sometimes the car you originally had in mind isn’t available or isn’t the best choice for you. If you’re dead-set on a specific make and model and don’t need a new car right away, waiting for the right moment might be best.

#2: Buy, Don’t Lease (In Most Cases)

In most cases, leasing a car costs more money and involves much higher prices in the long run than just purchasing a vehicle in the first place. That’s why our second tip for buying a car during a shortage is to avoid leasing.

Leasing a car usually requires you to put money down up front, and then make monthly payments for the duration of your lease. These payments are typically higher than if you were to finance a car purchase.

In addition, there are often mileage restrictions with leases, which can end up costing you more money if you go over the allotted miles.

An exception to the rule. If you are looking to add a second vehicle to your household and will be using it on a limited basis, lowering your annual mileage. You may consider leasing an Electric Vehicle (EV), EVs will cost you less in gas, and with a lease, you will be able to switch it out as the EV technology evolves to higher driving range capacities. 

#3: Be Prepared for High Prices

Our third piece of advice is to be prepared for expensive costs.

In today’s inflation climate, prices are increasing and aren’t expected to go down any time soon. It’s critical to have more cash than planned to ensure you’re prepared for an increase in price or markups at the discretion of your vendor.

#4: Consider Smaller Models

Another thing to consider is buying a sedan instead of an SUV.

This one may be a no-brainer, but a bigger vehicle means a higher price tag. Oftentimes, the features you find in an SUV are also available in sedans– for the most part, at least.

As long as you’re open-minded during the car-buying process, you’ll be able to find a car that works for you.

#5: Stay Insured

The last and most important tip for buying a car during a shortage is to stay insured.

Your insurance agent will be able to guide you through the car-buying process by sending a binder of the required documents to your dealership.

Our agents at Northeast-MetroWest Insurance Agency want to make your car-buying experience as painless as possible.

If you don’t have a personal auto insurance policy, it’s time to partner with an agency you can trust! Learn more about our policies here.