Anyone buying a new crossover, SUV, or truck is probably in for a bit of a surprise. There are a few ways to manage market if you want a fair dealbut the strangest advice I’ve seen is suggesting that buyers simply shouldn’t buy the type of vehicle they really want.
As someone who spends a lot of time finding ways for people to save money and reduce the stress of the car-buying process, I was struck by a recent Forbes article titled Let’s make ourselves small: howor avoidhe higher prices high orn New Cars toand trucks. Before you read it, I thought, “Oh, maybe there are some new tips to avoid margins on in-demand cars.” Then I got hit with this:
Downsizing is an obvious way for buyers to try to avoid the more inflated prices of new cars and trucks, yet the trend toward ever-larger trucks, SUVs and crossovers still dominates US car sales. USA
Obvious is a strange word to use here, because it is certainly not “obvious” for someone in the market of a toyota highlander (and finding the inventory situation difficult) to pivot to a camry.
This is like watching someone buy a single-family home in a crazy real estate market and advise them: “Well, obviously if those three-one bedroom patio houses are too expensive, you should only buy a one bedroom condo… because it will be cheaper!”
Automotive journalists have always argued that American buyers need crossovers, SUVs or vans, claiming that If buyers really looked at their driving needs, most people would be fine with a smaller car. But we forget that logic does not guide our purchasing decisions. And while Americans in general tend prefer larger vehicles my experience, most people are the targeting appropriately-size vehicles For Your Needs If someone with two or three kids wants a Highlander instead of a Camry, that makes sense to me.
Also, just because small cars are cheaper, you’re not “avoiding” the very common market premiums: your’you are simply spending less on a product that costs less.
jim Henry, the author of the Forbes piecelays it out very clearly.
For example, according to Kelly Blue Book, the median transaction price for compact cars was $26,211 in June. That’s a 9.6% year-over-year increase compared to the previous year, so in percentage terms, it’s still a big increase. However, it is much less than $48,000.
And even if people choose to go smaller, do it may not make this process any easier, because in most cases, inventory is still bad, as Henry points out:
Consumers thinking of downsizing should also keep in mind that smaller, more affordable vehicles can be hard to find.
So even if it’s a truck or an SUV buyers were aiming for a compact car, can expect to pay about ten percent over last year’s prices, and them yet they may not be able to get what they want.
Perhaps Mr. Henry is trying to point out that small cars are a form of better manage affordability, as average car payments are on the rise. B.ut to suggest someone, “Hey, don’t overpay for that Honda Pilotoverpayment for a civic instead” It is advice that will fall on deaf ears.
what consumers should do is build up a lot of flexibility in your purchases. be willing to look brands you havenot considered, because they may be more available. For example, a buyer might have to forget about that RAV4 Hybrid and instead go for a Subaru Foresteras I have seen a trend of Subaru stores that adhere to the MSRP, and them they seem to have cars in a reasonable timeframe.
Buyers who are frustrated when they can’t get their target model can also take a “hug me” reach out and get something reasonably priced that will serve a purpose for a period of time until the market changes once again.
Tom McParland is a contributing writer for Jalopnik and directs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Do you have a question about buying a car? Send it to Tom@AutomatchConsulting.com
If you are a sports enthusiast, you know that becoming a Formula 1 driver is no easy task. In fact, there’s a good chance you could play any other sport before qualifying for F1 racing. However, that doesn’t mean you should give up. Click here to subscribe to our print edition! Although it requires a...