BUYING TIPS DURING THE GREAT CAR SHORTAGE

Car prices have been climbing, with new models selling for above sticker price and used cars at record-high prices, too. So what do you do if you’re in the market for a vehicle? It may pay to get creative.

“New cars are in short supply—mostly because of a global, pandemic-related scarcity of the microchips needed to build them—and used cars are more expensive than ever,” Consumer Reports explains. “As 2021 wears on, the car-buying market continues to challenge many consumers and force them to be flexible. Multiple experts say it doesn’t show signs of improving for buyers anytime soon.”

It’s gotten to the point that new cars are selling for 18% or more above the manufacturer’s suggested retail price (MSRP), Consumer Reports adds. Be careful spending that extra money. You’ll be kicking yourself further down the road.

“Buying a car in today’s high-value market and then reselling in a low-value market means greater potential to lose money or go underwater on a loan,” reports the Nashville Tennessean.

Instead, consider these ideas:

1.     Get preapproved. CPS IBEW FCU members can apply for an auto loan preapproval online and receive a response the next business day. By having a preapproval in hand, you can shop for a car with “cash in hand” at a much lower interest rate than most car dealerships offer. These factors can boost your negotiating power. 

2.     Expand your horizons. You may feel you’re set on the make and model of the car you want or that you’ve never bought used (or you’ve never bought new), etc. Set aside those preconceived notions and shop around. You may be surprised at the options available to you when you’re willing to relax your requirements. 

3.     Don’t get taken. At the same time, be a smart consumer. Check resources like the Kelley Blue Book to understand real-time values and pricing. If you’re shopping online or at an unfamiliar car dealership, be sure the seller is legitimate and has a good Better Business Bureau rating. And if you purchase from a private seller, be sure to follow Texas title transfer steps, including obtaining a release of lien (if applicable) and proof of inspection. 

4.     Hold on to what you have. The past couple of years have allowed consumers to rethink new purchases and appreciate what we have. Before buying a new car right now, you may want to ask yourself if you need it. If you have a vehicle already, consider refinancing it and pocketing the savings. If that vehicle needs repairs, perhaps a fast cash or personal loan can make those repairs achievable so that you can hold on to the car longer.