As Jalopnik’s resident car-buying expert and a professional car shopper, I get emails. Lots of emails. I’ve picked a few of your questions and will try to help out. This week we are discussing two conundrums regarding the current seller’s market for both new and used cars.
First up, is it worth buying now, even though it’s harder to find a deal?
“I’m in the market for a new Chevy Suburban and almost every dealer I call tells me that either they don’t have what I want or that the price is going to be full MSRP, plus whatever rebates are being offered. I can probably afford to wait another month or so but if the prices aren’t going to get any better maybe I should just act now? It just sucks to pay full sticker for a “normal” car.”
The inventory issues that mostly due to the semiconductor shortage seem to be affecting domestic brands the worst, and large SUVs like Tahoes, Suburbans and Expeditions are feeling an even tighter squeeze. I’ve handled a few transactions recently on these cars, and just finding the right unit is a challenge, let alone getting the bottom-dollar price.
Our friends at CarGurus recently sent me some tips for navigating this difficult market. This is via Matt Smith, deputy editor of CarGurus:
“ One tactic shoppers can consider when shopping for a vehicle is to increase their search radius. Expanding the hunt from 25 or 50 miles to 75 or even 100 miles will help cast a wider net, snaring more options. If shoppers are comfortable handling negotiations remotely, many dealerships now offer delivery through the CarGurus platform — including a seven-day return period if the vehicle doesn’t meet the expectations laid out in the advertisement.
Motivated shoppers may consider loosening their search criteria. Determining needs versus wants will help increase the number of applicable vehicles within a search radius. Prioritizing those wants will help shoppers determine which ones are worth holding out for or which ones are worth bumping up the budget to accommodate. Criteria that shoppers may be willing to flex on include vehicle color, mileage, various features and even the type of dealership.
When a vehicle that fits the shopper’s criteria does appear, it’s in the shopper’s best interest to act quickly. Lining up financing ahead of time can give them a head start. Shoppers should also be ready to send an inquiry on an interesting vehicle when they know they’ll have plenty of time to respond to email, answer phone calls and take time to negotiate.
Finally, shoppers shouldn’t view a low-supply situation as a reason not to negotiate. Whenever possible, they should still request a test drive. Remember that all parts of the deal — from sale price to finance rates to extended warranties — are negotiable. And, of course, shoppers with a vehicle to trade are in a fortuitous position: Dealerships with low supply will be eager to bring in inventory off of trades, and will often pay top dollar.”
While all of that is helpful, I am finding on certain vehicles like these large SUVs that even casting your net nationwide doesn’t necessarily result in a better deal. But it may result in finding a better match for your specifications.
I don’t think we are going to see a market correction within the next month or so, but it’s possible that things will stabilize in the fall. So the question really becomes, is it more important for you to get what you want now or to feel like you got a great deal? Because a good price is relative to the market conditions at the time, sometimes sticker price might be the best price.
Next up, what should you do if your lease is up and you don’t want to overpay for the replacement?”
“My lease will be up in a month, and I’ve already gotten some preliminary quotes on replacement cars. They are way more than I am paying right now for a vehicle with almost the same MSRP! Should I turn it in and suck it up, or maybe I should buy out my lease.”
A lot of folks are in a similar situation and it relates to the case above. The deal you got a few years ago is likely not going to be replicated in the current market. What I would suggest for you is to extend your lease. Most brands will give you up to six months on a lease extension, and you maintain the same payments. The nice part is that you don’t need to take the entire time and it’s really a month-to-month type of agreement. So if you find a better deal three months from now, you can turn in your car and move on. As I mentioned above, there will possibly be a market correction in the fall, so the extension would buy you that time to revisit the deals later.