Buzz
Have you come across any recent ads for new cars? They likely emphasize appealing prices and favorable financing options. This isn’t due to a sudden shift in automakers' priorities; they still aim for profit. The drop in car prices is mostly because the pandemic has kept people at home, delaying any intentions to buy a new car.
Car sales have decreased by approximately 35 percent compared to this time last year—the steepest decline since the recession a decade ago. We're still in the midst of the coronavirus pandemic, and with widespread uncertainty regarding employment and financial stability, a return to regular car buying patterns seems unlikely for the foreseeable future.
To encourage car purchases during this time, manufacturers and dealerships are offering a range of tempting deals. Even though showrooms may not be open for in-person browsing, there are still plenty of ways to purchase a car.
So, how attractive are the prices?
Well, they’re not exactly thrilling yet—at least not if you’re just looking at the price alone. You might score a better deal on your trade-in compared to usual, or you could find it easier to haggle the price down from the car's listed value.
But the real appeal lies in the financing options.
“We’ve observed a broad range of manufacturers providing financial support to buyers, with offers ranging from 0% financing to deferred payments,” said Karl Brauer, executive publisher for Autotrader and Kelley Blue Book.
Brauer mentioned that buying solely for the sake of a deal isn't advisable. However, if you're in the market for a new car, he emphasized that the current buyer incentives are “exceptional.” “Zero percent financing for six or seven years leads to significant savings, and deferring the first payment for 60 or 90 days with no interest adds to those savings,” he explained. Automakers like Fiat Chrysler, Volkswagen, and Kia are offering both incentives simultaneously, Brauer noted.
The biggest advantage of purchasing now is the convenience—it can largely be done from the comfort of your home. Although it's still essential to take the car for a test drive, make sure to maintain responsible physical distancing. Many dealerships offer home test drives and delivery options while ensuring regular sanitization. ‘Everything else in the car-buying process can be completed online, from financing to insurance, and even signing the paperwork,’ said Brauer. Shoppers should be able to find a dealer offering all these services.
Before making any decisions, it's always wise to do your homework. Websites like Edmunds, Autotrader, and Consumer Reports offer extensive ratings and reviews. Our partners at Jalopnik also provide valuable advice. Additionally, Kelley Blue Book is keeping a close eye on automakers’ financing deals and payment support options.
One silver lining of these challenging times: Automakers and dealerships are likely to continue using their digital sales tools even after the pandemic ends. This means that the next time you're in the market for a car, you'll likely spend less time at the dealership.
