KEY POINTS
- The average price for a new car is about $35,400, according to J.D. Power.
- Depending on the make and model year of your current car, dealers may be willing to give you a premium for trading it in, experts say.
- Many manufacturer discounts or other incentives are for 2020 models, which dealerships will want to clear out as next year’s crop of cars roll into their lots.
If you’re wishing to take benefit of special Labor Day car sales, a trade-in could make the purchase a bit less pricey than usual.
With the stock at dealers still tight, used vehicles are bringing a premium. For example, the average sticker price for a 2017 design climbed to $24,287 in August, up to $721 from July and up almost $1,500 from June, according to information from Edmunds.com.
“Cars and truck buyers are experiencing an interesting dynamic today because regional dealerships might pay more for a popular vehicle this year than in years past,” said Matt Smith, deputy editor of CarGurus.com.
The car-buying activity has chosen up after dropping off at the beginning of the pandemic, although August sales for new cars and trucks were an estimated 10% lower than a year earlier, according to a projection from J.D. Power and LCM Automotive.
And while production has ramped back up after pandemic-related plant closures, the schedule of some 2021 models may be limited.
In August, about 4.6% of sales– roughly 1 of every 20 cars sold– involved 2021 designs, up from 1.8% (1 of every 50 cars) in July, Edmunds research study shows.
Right now, 2021 variations make up 12% of new-car inventory on Cars.com, said Kelsey Mays, the website’s senior consumer affairs editor. The remainder is largely 2020 models– which is where the finest incentives may be found.
For example, the 2020 Kia Soul, with a beginning cost of approximately $17,500, uses $2,000 off, plus another $1,000 on specific versions, according to Cars.com. Certified purchasers can get 0% financing for 66 months.
The 2020 Nissan Murano, which starts at about $31,500, includes $4,000 off, plus $1,000 for the SL or Platinum trims. Or, you may get approved for 0% financing with 72 months plus benefit money.
Obviously, rewards on 2020 designs may edge upward as the year progresses, Mays said. “The other side, nevertheless, is that those lorries will become harder to find,” he said.
Consumers ought to likewise be gotten ready for a various buying experience.
In a business known for its individual interaction, the pandemic forced lots of dealerships to move much of the procedure online in March and April amid shutdowns and stay-at-home orders.
And while car dealerships have actually re-opened their showrooms as local regulations have permitted, it deserves calling ahead if you want to go there due to the fact that you may require to schedule a consultation.
More than 70% of the stock on Cars.com, for instance, is noted as including some type of non-traditional sales such as house delivery or a virtual visit, Mays stated. You might have the ability to even sign documents online, although it depends upon the location.
“Dealers are going the additional mile to make sure customers feel safe,” Mays said.
In addition, make sure you compare car dealerships, which generally can be done online. While they all usually give you the maker’s discount, one may offer a better deal on your trade-in, a lower interest rate on your loan, or some other perk.
Professionals also advise getting pre-approved financing prior to engaging with the dealership. If you’re offered better terms from the dealer, excellent. If not, you have the finest offer you could discover. The average rate has to do with 4%, although it will depend on your credit rating and the regards to the loan.
And, as constantly, consider the financial impact beyond the vehicle’s cost or the regular monthly payment, such as how the purchase will impact your insurance coverage cost and gas consumption.
“Labor Day is still a good time to buy an automobile,” Smith stated. “It simply looks a bit different this year.”
