Yahoo Finance Americans Aren’t Shopping For Cars Right Now: Maybe You Should Be
Holiday weekends like those surrounding Memorial Day, Fourth of July and Labor Day are popular times to shop and score some great deals. But while many people plan to buy food, clothes, summertime essentials and outdoor essentials, cars aren’t high on most shopping lists.
In fact, a recent GOBankingRates survey found that only about 4% to 5% of Americans plan to buy a car over these three-day holiday weekends. This is surprisingly low considering the fact that many dealerships also offer lower prices and other incentives around these times.
So, why aren’t Americans shopping for cars right now like they might have before? And perhaps more importantly, why is now actually a good time to shop?
Here’s the word from automotive experts.
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Why Aren’t More Americans Buying Cars?
Quite a few factors could be keeping American consumers from spending their money on vehicles. A big one is simply the economy, especially its effect on vehicle prices and supply.
“Since the pandemic, car prices skyrocketed to unexpected highs. Many people sat on the sidelines waiting for the prices to come down and now, after four years, there is no sign of this happening,” said Mark Beneke, owner at Westland Auto Inc. “[High] pricing has become the new norm and the thought of that scares most consumers as they are uncertain if this will be sustained or continue going up. Many are still waiting on the sidelines for prices to come down.”
And then, of course, there’s the fact that inflation has also led to higher interest rates, something that’s made car ownership more expensive than ever.
“We have seen inflation skyrocket over the last few years, and alongside it, interest rates,” said Beneke. “If the higher prices weren’t enough, rising interest rates lead to an even higher total cost after all is finalized. People have not had the time to come to terms with this and it is off-putting to accept that it happened so quickly.”
Another potential factor keeping people from buying cars is economic uncertainty, Beneke said. People don’t want an expensive auto loan hanging over their heads if something — like a sudden layoff at work — were to happen.
Then, there’s the limited supply of affordable, reliable cars in many areas of the country.
“The supply chain issues we’ve faced are ongoing and much of their impact is still being seen,” said Beneke. “This has continued to raise the cost of production, reduce the available supply and therefore raise the price for consumers. The after-effects of this will likely continue for some time, especially if consumers do not contribute to the flow of spending in the economy.”
Right now, dealers aren’t offering as many incentives to buy as they did before.
“Dealers have also scaled back the great deals and discounts we’re used to seeing in the summer,” said Jason Farrell, a certified master technician at Mechanic’s Diary. “With fewer cars available and people still wanting to buy, they don’t need to work as hard to move metal off the lot. Less incentive for buyers to pull the trigger now.”
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But There Are Still Plenty of Reasons To Buy a Car Right Now
Making the decision to purchase a vehicle is largely dependent on your financial situation and your needs. That being said, here are a few reasons why it might be worth getting a car right now — or over those big holiday weekends when sales are at their peak.
Dealerships Are Making Room for New Inventory
New models are often released around the early fall, so now’s the time when many car dealerships are starting to make room for new inventory. This could mean more incentives or lower prices if you know where to look.
“Even though fewer folks are shopping for cars this summer, it’s actually a really good time for buyers if you know how to work the system,” said Todd Bialaszewski, a certified master mechanic and the founder of Junk Car Medics. “Toward the end of the season, dealers get really eager to clear out last year’s models to make room for next year’s. This desperation leads to some seriously good deals, financing offers and trade-in values just waiting to be had.”
Less Competition Could Mean More Negotiating Power
“Decreased competition can work in your favor as you have more leverage during negotiations,” said Beneke.
It does depend on where you live and which type of car you’re buying, of course. But if you visit a dealership that isn’t terribly busy, you might also have a better chance of sitting down and negotiating prices.
Prices Could Be Coming Down Slightly
Summer often sees a dip in car prices, especially if you’re looking for a used vehicle.
“As many people already spent during tax time, prices begin to come down slowly. By summer, they have come down a lot and can make it one of the best times to get a great price,” said Beneke. “It also means that a lot of people have already traded in their vehicles to upgrade to newer models which increases the available supply of used cars available to you.”
But Prices May Also Rise Again
Although car prices might drop in the summertime or around major sales periods, they’re just as likely to increase in the coming months or years.
“With automakers ramping production back up, prices seem likely to rise going forward as demand outpaces supply,” said Farrell. “So, locking in what’s available today could save you money down the road versus waiting. Dealer subsidies may phase out too.”
It’s a Good Time for a Test Drive
It might not be your biggest priority, but the nicer weather can make now a good time to buy a car if you’re already in the market anyway.
“No one wants to test drive in a blizzard! Warm summer days make for a more pleasant buying experience,” said John Lin, a mechanic and owner of JB Motor Works.
End-of-Month Sales Are More Common
When it comes to buying a car, timing is huge. If you manage to catch an end-of-month sale, you could get a lower price than expected.
“When the month is coming to an end, dealers might be a few cars short of a sales quota that would win them a big bonus,” said Lauren Fix, automotive expert at Car Coach Reports. “Salespeople will have more motivation to make a deal with a buyer and might deeply discount cars, making up any money lost with the bonus.”
Just be aware that any sales team that’s already met its quota for the month is less likely to negotiate as much.
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This article originally appeared on GOBankingRates.com: Americans Aren’t Shopping For Cars Right Now: Maybe You Should Be
