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Thursday, December 9, 2021

New car buyers shouldn’t expect the same Black Friday deals this year

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Shoppers of all stripes look forward to Black Friday each year, anticipating great deals, but for anyone wanting to head to their nearby car dealership hoping for a bargain, they are likely to be disappointed.

The Black Friday sales that new car buyers have grown accustomed to won’t offer the great deals of the past.

The often chronic vehicle shortages, courtesy of the semiconductor shortages brought on by the pandemic, are quite dire. According to Edmunds, new vehicle inventory was down 77% in November compared to 2019 totals.

“Black Friday and the end of the year are often opportunities for consumers to find deals on new cars, when dealers are eager to sell off excess inventory. That is not the case this year due to the ongoing problems created by the global chip shortage, “said Jessica Caldwell, Edmunds chief knowledge officer.

“Although the inventory seems to finally stabilize, historically it is still quite low. And since demand is stronger than normal, you can’t expect to see the same discounts that you would normally see. Realistic expectations should be set if you are planning to buy a car this holiday season, because it is difficult. “

Low inventory means fewer deals

VW ID4 - First delivery in the USA
All these Volkswagens were probably talked about by now, but if not, they didn’t last long.

Typically, there should be around 3 million new vehicles in dealer lots or in transit, based on historical industry standards. Right now though, there are barely 1 million. Fewer vehicles means faster sales or, in some cases, no buying opportunities.

According to Edmunds data for the first half of November, one in 20 new vehicles was sold the same day they arrived at the dealership. Nearly a third of all new vehicles sold during the first week and almost half of all new vehicles sold during the first two weeks.

On top of that, what you will buy is definitely going to cost more, which has been the case for much of the past two years. Edmunds data reveals that the average transaction price for new vehicles rose to $ 45,598 and for used vehicles to $ 28,607 in October 2021, an increase of 14.3% and 27.4% year-over-year, respectively.

There’s a ray of light in all of this, real monthly payments have increased by a more modest 12% because exchange values ​​have also skyrocketed to record levels, Tyson Jominy, JD Power’s head of dealer sales data analytics, told TheDetroitBureau.com.

How to get a deal anyway

Nissan is encouraging some buyers to visit specific vehicle pages.

Dealers will tell you they have inventory, but it may not be the vehicle you want. But if you want a great deal on something new, flexibility is your friend.

Edmunds recommends:

  • Consider alternative vehicle types (for example, sedans instead of SUVs) and colors, and be willing to compromise on the features.
  • Expand your search geographically for more selection in a market with little inventory.
  • Take advantage of your greatest asset: your current vehicle. If you own a vehicle, the used value of your car is one of your greatest negotiating tools to offset the purchase price of your next vehicle.

The other way to get a deal is by special ordering a vehicle. Some automakers, like Ford, offer special incentives to buyers who go online and order a vehicle.

“If you are going to pay a lot of money for a vehicle, which is certainly in our current car buying environment, get the vehicle with the options you want, in the color you want, by configuring a vehicle to your preferred specifications through manufacturer’s website and place an order with your preferred dealer, ”said Ivan Drury, Edmunds senior manager of knowledge.

“Just keep in mind that you may need to wait a few months for your vehicle to arrive, so this is really the ideal option for those who can wait that long.”

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