Is 2022 a good time to buy new car?
Is Thanksgiving a Good Time to Buy a New Car in 2022?
Thanksgiving is a great time to shop for nearly anything, including cars. Most years, dealerships will have sales for Black Friday to clear inventory before the end of the year. However, 2022 is a different kind of year. Lately, many car buyers have been paying well over the sticker price for new cars, and used car prices are still elevated. So is this year a good time to buy a new car?
There are some deals to be found this Thanksgiving weekend
Although new car inventories are slowly being replenished, J.D. Power reports that almost half of the new cars are still being sold above MSRP. That’s a bummer, but the light at the end of the tunnel is that there are some nationwide deals to be found this Thanksgiving weekend. Cars.com recently published some of them:
2022 Chevrolet Equinox
- Factory discount: $1,500
- Price range after savings: $26,000 – $43,000
- Approx. factory savings: 3-5%
- Offer ends on November 30
We drove the 2022 Chevrolet Equinox earlier this year and enjoyed its pleasant on-road manners. It’s also spacious and has enough room to fit a mountain bike in it, so we can recommend it as a practical small SUV. It’s also being offered a $1,500 discount nationwide and a 2.99% special financing rate through GM.
2022 Jeep Compass
- Factory discount: $1,000 – $3,000
- Price range after savings: $25,000 – $41,500
- Approx. factory savings: 2-11%
The Jeep Compass was updated for the 2022 model year. Some new features include an updated cabin with the latest Uconnect infotainment system, a more upscale look, and extra storage. If you act before November 30, you can get a substantial amount of savings off the MSRP, including a special financing rate of 2.9% for up to 60 months.
2022 Jeep Gladiator
- Factory discount: $1,000 – $2,500
- Price range after savings: $37,000 – $67,000
- Approx. factory savings: 1-5%
The 2022 Jeep Gladiator is great for going off-road and hauling goods at the same time. It’s also available with a pretty good discount nationwide. However, there aren’t any special financing rates for it at time.
You may still need to negotiate down to MSRP this Thanksgiving
Although there are some deals out there, it’s worth noting that there are still plenty of dealers marking up car prices. As usual, it depends on what make and model of the car you’re looking to purchase. The more popular models will typically be low on inventory, making them harder to find. And if you do, they’ll command a higher price due to demand.
In that case, you may need to negotiate down to the car’s MSRP if the dealership puts a markup on the car you want.
Don’t be afraid to shop for a car outside of your region
If there is a car that you must have but can’t find in your local region of dealerships, don’t be afraid to shop outside of your region. In some cases, you may need to shop out of state and have the car shipped to you.
Either way, Thanksgiving is still a good time to shop, but car buyers may need to be a little more diligent when shopping.
Buying a car in 2023?
From interest rates to inventory, Edmunds offers 5 tips and trends for those navigating the automotive market
By By RONALD MONTOYA
Feb. 10, 2023 5:20 PM PT
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Shopping for a new or used car over the last few years has become a frustrating and expensive undertaking. Car shoppers have had to deal with vehicle shortages, high prices, dwindling incentives and rising interest rates. Will 2023 bring any relief? Yes and no.
“Many buyers exited the market due to inventory issues or pricing that was not what they were expecting,” said Ivan Drury, Edmunds’ senior manager of insights. “While some of those issues will subside for 2023, current buyers will face a new set of challenges. The cost of financing continues to climb, which can offset some of the discounts from the manufacturer’s suggested retail price.”
The experts at Edmunds have gathered five important issues you need to know about the current car-buying climate, plus tips on how to make the best of them.
1. According to Edmunds data, the average annual percentage rate, or APR, on new financed vehicles climbed to 6.5 percent in the fourth quarter of 2022, up from 4.1 percent in Q4 2021.
For used cars, the average APR climbed to 10 percent in the same time frame, up from 7.4 percent in 2021. Experts are predicting that the Federal Reserve might have a couple more rate hikes in store for this year, so this situation isn’t likely to improve in the coming months.
Tip: Get preapproved for an auto loan with your local bank or credit union. A preapproval allows you to compare rates offered by a dealership. Lower APRs can be found through the automaker’s finance arms, though the loan may have a shorter term than expected. And while it might be tempting to take a longer loan term to drop the monthly payment, keep in mind that you’ll be paying more for the car over time due to the added interest charges.
2. While you’re likely to find more cars on the dealer lots this year, the inventory may not be as high as it once was. Some automakers are faring better than others, depending on their supply chain and tolerance for excess inventory.
Tip: While the selection on the lot might be better, you should still be prepared to act quickly if you spot a vehicle you like. Those who need a new car in a shorter time frame will need to be flexible on the brand, model colors and trim levels to maximize their options.
3. For most of 2022, the average transaction price of a new vehicle was $600-$700 over MSRP. Compare that to December of 2022, when the price dropped to about $293 below MSRP. “While I don’t expect pre-COVID type of discounts this year, we’re definitely seeing movement in favor of the customer,” said Drury.
Tip: Given the volatility of pricing, it is critical to know the market value of the vehicle to avoid overpaying. Get multiple price quotes for the vehicle you want and check what others are paying on sites such as Edmunds.
4. The higher prices of new and used vehicles today have forced shoppers to put more money down to get a reasonable monthly payment. In the fourth quarter of 2022, the average down payment climbed to a record high of $6,780 for new vehicles and $3,921 for used, according to Edmunds.
Tip: The old “20 percent down” rule is getting harder to abide by for most people. If you’re making a down payment of less than 20 percent, consider getting gap insurance or new car replacement insurance from the dealership or an auto insurance company. In the event of an accident, this policy will cover the difference between the vehicle’s value and what you might owe on a loan.
5. The sky-high trade-in values of the past year or so are coming back down to earth as more inventory becomes available. While this is good news for used-car shoppers, those who are counting on their current vehicle to serve as a trade-in might be disappointed.
Tip: If your vehicle has lost value from the last time you checked it, you may have to make a larger down payment on your next purchase to get your monthly payments to fit your budget. Keep in mind that if you owe more money on a loan than the car is worth, it’s best to hold off on a purchase. Don’t risk rolling that amount into the next loan and repeating the same situation.
Shopping for a car in 2023 may seem daunting. But you can make it easier by getting preapproved on your loan and researching a fair price for the vehicle you’re buying and the value of your trade-in.
Ronald Montoya is a contributor at Edmunds. This story was provided to The Associated Press by the automotive website.