What do you need to know if you plan to buy a car?
MINNEAPOLIS – Nearly three years into the pandemic, a leading industry is still trying to return to form.
The car sales market weathered many challenges in that span, most notably inventory.
So what do you need to know if you plan to buy a car? Good Question. Jeff Wagner learned how customers can best prepare, and accept what may be a new normal.
Sarah Anderson has a goal for her future ride, but not really a demand.
"I'm not particularly fussy. I just want a car that has my general needs," Anderson said.
It's a mindset Scott Lambert hopes other customers share. He's president of the Minnesota Automobile Dealers Association.
"What I tell everybody is don't be as fussy as you might normally be. We're still in pandemic mode. Inventories are still very, very low," Lambert said.
But they have improved slightly. More cars in the showroom and on the lot prove that. It's not because more cars are being made, and the computer chip shortage still exists But fewer customers are buying right now, and a drop in demand has created a bump in supply.
Before the pandemic, dealerships had roughly 90 days of inventory.
"I don't know that we'll ever get back to 90 days, frankly," Lambert said.
It dropped to basically zero once COVID hit.
"Now the dealers are telling me that we're kind of creeping back up to like 15 days of inventory," he said.
So, are there deals still out there for those in the market for a new car?
"There's still cheap money available, mainly through the factory financing," he said.
Finding a discount or striking a deal below MSRP remains tough given inventory levels. That means a customer's best bet to save money is on the loan, even as the Federal Reserve keeps raising interest rates.
"It's easier on new cars than on used cars," he said.
No matter how much you spend, be prepared to accept what's available, or wait.
"It could be they're going to build your car, here's your build date in several months and you get it a few weeks after that. Or it's gonna be that it's on the train now or maybe we can grab it from somewhere else," he said.
While prices remain high, experts predict they will drop this year. JP Morgan forecasts new car prices to dip to 5%, and used cars are expected to fall between 10% to 20% compared to last year.
