By Mike DuBose
The Wall Street Journal reports major car manufacturers have reduced their inventory to dealers 50-70% due to computer chip shortages, changing the automobile industry drastically! Most dealerships have limited new inventory and are selling cars thousands above MSRP! In fact, dealers in NC and SC didn’t have models to test drive. And, unless you’re a recent college graduate or military, few manufacturer incentives exist! Dealers are seeking used cars to make up for lost new vehicle profits. The good news—used car prices have skyrocketed! The bad news—fewer new cars to buy! We recommend purchasing your new car first and then sell your older vehicle. Ideally, wait until 2022 when the new inventory might be higher with lower prices. We suggest not trading in your used car since you will obtain more money through private sales. Look at your original sticker to determine your older car’s options. Go to www.kbb.com, then “My Car’s Value,” complete the form (omit contact information), and after listing your model and options, select “Private Party Value” for your used car’s worth. Have your car cleaned by professionals so it looks immaculate! Take pictures (inside and out from different angles) in bright sunlight and list your car with details on Facebook Marketing and Craig’s List. Get ready for dealers and individuals contacting you and have your VIN# available. If you sell your car, for safety reasons, meet in public places, like banks, for any transactions.
For new autos, visit dealers’ lots on Sunday when salespersons are absent but don’t be surprised with low inventories. Next, study your new car on Consumer Reports—it’s worth an online subscription! Once you narrow your search, visit manufacturers’ websites, and select “Build Your Car” and include desired options. This will outline MSRP costs, dealership locations, where your car might be located, and, if you allow, will alert dealers of cars you’re seeking. Tell dealer reps to contact you by text or e-mail to avoid aggravating sales calls. Then, go to dealers’ websites to search for new inventory. Dealerships may list cars on their lots that may be in transit weeks to months away. If you find a car, contact dealers’ Website Internet Salesperson for best prices. State you want the “out-the-door-price” which includes retail price, sales tax, fees, tags, markups, etc. Be sure to ask for new car detailed manufacturer’s stickers to be emailed to you so you can view all the details before negotiating.
Be prepared to pay $2-$3,000+ above MSRP. Seek bank credit before contacting dealers unless manufacturers provide low-interest loans and unlock your credit bureaus for dealer credit checks. Don’t mention you have arranged financing or you’ll pay cash since dealers make money on financing which can be negotiated. You’ll be pressured to buy expensive, extended warranties which we don’t recommend unless you’re a high-mileage driver. Be sure to take an hour to test drive cars “alone” on backroads and interstate and not rush into the purchase. Seniors should consider mid-sized SUVs which sit higher off the ground and are easier to enter/exit versus low-level, sporty sedans. Be prepared to buy a car that’s in transit after test driving models. Unless you want to be tortured and pay more, don’t show up unannounced at dealerships. After the sale, ask dealers to transfer your old car tag to the new one to reduce taxes.
Bottom Line: Forget about the pre-Covid days where you could buy a new car 10-15% under MSRP! Shop different dealers and take your time buying but know that new cars are leaving dealerships in record time! And be prepared to walk away from an unwanted sale! This is a big investment and doing your advanced research and being patient will go a long way towards getting the right car!
Mike DuBose has been an instructor for USC’s graduate school since 1985, when he began his family of companies, and is the author of The Art of Building a Great Business. Visit his nonprofit website www.mikedubose.com for a free copy of his book and additional published business, travel, and personal articles, as well as health articles written with Surb Guram, MD.