5 tips for buying a new or used car amid inflation

Salesman giving key to car buyer

The world is in a global recession now, with skyrocketing prices for everything from groceries to houses. The automotive industry is one of the hardest hit by rising costs due to semiconductor shortages and supply chain issues. Auto demand has rebounded after the pandemic, but inventory remains tight, putting even more inflationary pressure. Anyone looking for a new or used car is having a tough time. If you’re a successful car buyer, you should consider taking advantage of the best extended car warranty to protect your investment.

Car buyers should expect fierce competition for new vehicles as automakers scramble to meet market demands. With inventory short, it’s a seller’s market right now. In fact, even the prices of old cars have skyrocketed so much that some three-year-old cars could cost as much as a new one, depending on the make and model. When you buy a new or used vehicle, you have to deal with margins, small discounts, lack of promotions and limited options. There is also more pressure for you to continue with the purchase. With all of this in mind, here are five tips for buying a new or used car amid inflation.

Calculate financing in advance

Since the competition is fierce, you need to calculate your budget and the car price you can afford. Refrain from over-borrowing as a car is a depreciating asset. Getting a loan with high interest rates and poor terms is not advisable, as the car will lose value in the next two years. Pre-arrange financing based on what you can afford as a down payment and monthly payments. And be sure to read the terms and conditions of the loan.

It’s best to work with your bank or credit union before shopping around at a used car dealership or lot. With this in hand, you’ll have a baseline for comparing dealer financing or used car loans. Plus, you can get the car you want right away by arranging financing ahead of time. Again, it’s a challenging market now, so there may not be much room for trading compared to years ago. It is best to come prepared.

research beforehand

Whether you’re shopping for a new vehicle or a new one for yourself, the dealer may not have what you’re looking for in stock. Before you go out and spend gas in the city, it’s a good idea to check the website and call customer service to see what they have. In today’s challenging market, there’s a good chance the dealer may not have what you’re looking for. More importantly, if you have a car that it’s set up on, it’s critical to check the following:

  • car reliability
  • road test results
  • vehicle safety
  • Owner Satisfaction

Create a short list of vehicles you want to test to save time. It would be helpful to have a good understanding of the features of the car you want. This can help you make a wise decision.

Consider ordering directly from the manufacturer

If you’re buying a new car, one way to avoid the dealer markup is to order directly from the manufacturer. This ensures you get the model, color, and options you want. More importantly, this saves on dealer fees and insurance to park the car on-site. All of these savings are passed on to you. However, you must be willing to wait at least six weeks for the car to arrive. Giving up the convenience of having the vehicle right away is a small price to pay for not paying dealer add-ons.

Expand your geographic search

Consider car dealers outside of your usual comfort zone if used car dealerships or lots near you don’t offer what you like. But of course, don’t go overboard either because you don’t want to waste gas. Whether you’re buying a new or used one, you want to see the real car and take it for a test drive. This is imperative before signing the contract, especially for used vehicles. You want to see how the car drives and gauge if it’s really what you want and need since you’ll be sitting behind the wheels for commuting.

Select a reliable vehicle

With both new and used cars commanding higher prices than ever, it’s important to buy a reliable vehicle. You’ll get better value for your money if you keep the vehicle longer. Check ratings and reviews to make sure you’re getting a reliable vehicle that won’t give you trouble down the road.

Whether you’re shopping for a new or used car, do your due diligence. Decide ahead of time which car features are non-negotiable for you. Researching and planning ahead means you can find more affordable options.

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