If you’re shopping for a car right now, then you already know how tough things are. There are ongoing shortages of new vehicles along with high prices on used models. Just a few minutes of looking at dealership websites can be enough to make you want to curl up into a ball and start crying – do what you need to, I’ll be here when you’re ready. Feeling better? Good, now let’s talk about what you can do to make it easier to find a vehicle right now. I can’t do it for you, but I’m going to outline six important strategies that you need to keep in mind while you’re shopping for a car, which can potentially save you money and make things easier for you.
#1: Wait if You Can
Full disclosure: this might not be helpful, but it’s so vitally worth saying that I’m going to say it anyway. One of the best strategies you can use right now is to simply wait if you can for your next vehicle. It’s like “Wargames” – the only winning move is not to play. The chip shortage is getting a little better each month, and it will end eventually, which means new vehicles will be in greater supply, and prices on used models will come down. But this might not happen until sometime next year.
If you don’t urgently need a vehicle right now, then you should simply wait before you start shopping for your next ride. I know it can be tempting if you’re bored of your car or you want all the latest, flashiest features and technology, but this is honestly the worst time in decades to shop for a car. For some people, it’s urgent, and there’s no way you can wait a year to buy your next vehicle, but if that’s not you, then my top suggestion is to simply put a pin in it and keep driving what you have.
#2: Do as Much Research as Possible
Now that that’s out of the way, let’s talk about what you need to do if you must get a car right now. For starters, research is going to be your best friend in this process, especially if you’re in a situation where you have a few weeks or a month or two before you need your next vehicle. Spend some time looking at dealerships in your area and compare the kinds of inventories they have in terms of both new and used models. Look at prices, take some notes, and figure out which ones are offering the best values overall.
If you have a vehicle currently that you’re looking to sell or use as a trade-in, then you should do some research on it too. Find out what your car is worth because there’s a good chance it’s worth more than you realize right now – used cars, especially those in good shape, are an incredible commodity at the moment. Knowledge is power, as they say; research before buying a car has always been important, but in many ways, it’s never been more vital than right now. Know what your car is worth, know the MSRP for any models you’re interested in, and look at what they should be selling for. Everything you know before setting foot on a dealer’s lot is going to empower you to get the best deal possible.
#3: Figure Out Financing Beforehand
Dealerships are going to do everything they can to figure out financing for you, but remember that their interests are largely selfish. There’s a chance they’ll find you a good financing solution, but only if it also aligns with what they want. Your best options are typically going to be found by doing some research and work ahead of time to secure financing for your next vehicle.
You should start with any bank or credit union where you already have an account. Since they know you, they’re your best bet for getting the best terms possible on a loan. There’s nothing better than going to a dealership knowing exactly what you want, what you can afford, and having a loan for that amount already secured. Even if you don’t have a bank account or they’re not interested in loaning you money, you can still check out numerous lenders and figure out financing before you head to a dealership. Just make sure you’re ready for this and do all of your applications in a short time since this will avoid multiple dings to your credit.
#4: Use Everything You Have
Once the time comes for you to go to a dealership, use every option and advantage you have available to you to get the best price possible. A smart strategy to start with is to find several dealers in your area with a vehicle you want and send them all offers for what you will pay for it. They might not reply, or some might refuse while another says they’re interested in exploring a deal on that vehicle. Once you get a response, you can use this to communicate again with that dealer and the others, and pursue a fair price for the vehicle. Use multiple dealerships against each other – you can communicate online and through email to save time and energy.
If you have a vehicle you want to use as a trade-in, then let the dealership know that at the start of your time with them. You’re not going to gain anything by springing a trade-in on them as a surprise; it’s only going to slow things down. Furthermore, your trade-in is a massive advantage right now that you can use for your benefit. Get the most money for it possible – get offers from other dealers or online retailers like Carmax and Carvana and show that to the dealership to get them to go higher on what they’ll give you for the trade-in. Every dealership is hungry for used cars right now, and your bargaining power with a trade-in is huge.
#5: Don’t Lease a Vehicle
Normally, leasing can be a great option for anyone interested in enjoying a brand-new car without committing to anything long-term. At the moment, however, leases are not ideal since the prices of new vehicles are quite high, and it’s very much a seller’s market. Dealerships have no incentive to give you a good deal on a lease since their lenders can get someone locked in for six or seven years on a loan for that vehicle instead. If you really prefer leasing and there are other advantages to it for you, like a tax write-off for a business vehicle, then it might make sense. Otherwise, you should avoid leasing a vehicle and simply buy one instead.
#6: Know Your Budget and Stick to It
Don’t let the fact that this is at the end fool you: this is incredibly important and something that will save you a lot of frustration and pain down the road. Things are expensive right now, not just new and used cars but pretty much everything: gas prices, food, insurance, rent, utilities, etc. you know this, but it’s very important when you’re shopping for a car to have a realistic sense of what your budget looks like and what you can afford.
Before you do anything else, figure out your budget and what you can pay each month for gas, car payments, and everything else that you need to survive. Once you know this, then you must stick to it. I don’t care how flashy the car is or how much the salesperson says it will save you money in the long run, don’t go beyond what your budget says you can afford. The last thing you want is to have your car repossessed three months from now because you couldn’t make the payments that you knew you couldn’t make. This will trash your credit and make getting your next car even worse. Be realistic, be smart, and choose a car that fits your lifestyle.
