We’ve all felt the effects that the COVID-19 pandemic has had on the economy, both locally and globally. Abrupt changes in demand paired with labor and supply shortages have created a surge in prices across industries, and the automobile industry, in particular, has been uniquely affected. Demand for cars has picked up almost as quickly as it dropped off, and shortages in parts, notably microchips, have created an ongoing struggle for automakers to keep up. Orders for new cars can take months to fulfill, pushing more prospective buyers to a used car market that has been quickly overwhelmed and depleted. This imbalance of supply and demand has caused prices to go up, up, up.
For buyers searching for cheap cars for sale, the situation is less than ideal, but there are ways to protect your financial well-being, even when buying in a market that feels impossibly skewed against it. Supply shortages and high-interest rates may be largely outside of an individual buyer’s control, but there are ways to steer the process of buying a car in a more affordable direction. Knowledge is one of the greatest tools a person can yield when making a big purchase, but the research itself can be intimidating. Fear not. The most important takeaways are pretty simple, so car buying can be boiled down to two concepts: picking the right car and protecting your purchase.
Picking the Right Car
The right car is going to be a lot of different things for a lot of different people, but there’s at least one attribute that most currently agree on as a necessity: the right car has to be fuel efficient. Throughout the automotive industry’s history, environmental reform and energy costs have shaped the way our vehicles perform. Oil crises and the vicious evisceration of our wallets at the gas pump have, time and time again, prompted a surge in interest in fuel-efficient cars. There’s been a handful of occurrences since the ‘70s, and we’re right in the middle of an energy crisis right now.
I know that hybrid or EV is looking pretty good to you right now, but it’s looking pretty good to everyone else, too. We already know what high demand does to price tags. For that reason, it’s worth considering a gas car as your next daily driver as they are less likely than a hybrid or EV to have their price marked way up by dealerships. Plus, a lot of gas cars are pretty fuel efficient these days. Take Ford’s EcoBoost engines, for example, or Honda’s VTEC technology. Gasoline engines have gotten smarter with fuel consumption over the years, so owning one doesn’t necessarily have to mean breaking the bank at the pump.
If it’s EV or bust for you, it may be prudent to hold out a couple of years before leaping into electrified car ownership. Automakers have pledged to be greener, and most have announced plans to introduce more EVs into their lineup in the coming years. Once there are more options for EVs, and the supply chain normalizes a bit, we can likely expect the price of EVs to come back down to this layer of the atmosphere.
If you’ve had your own car before, you know that the initial cost of buying it isn’t the only expense of car ownership. Even high-quality vehicles require maintenance from time to time, and those down-the-road costs are important to consider when trying to frugally go about buying a car. Supply chain issues are not only affecting the completion of newly-manufactured vehicles but the repair and maintenance of cars with thousands of miles behind them. Buying a normal stock car with easy-to-source parts can help avoid repairs that take months because your shop is waiting on a part to come in. If you’re waiting on a suspension component for an F-150 XLT, that’s likely to be available quicker than the part made for the high-performing Raptor variant of the F-150.
Finally, one of the most important things to note is that the “right car” may not be just one car. Casting a wider net increases your chances of catching a good deal. When you start shopping around, come equipped with several years, makes, and models that would be a good fit for you. Better yet, gain an understanding of what features you’re looking for. Do you need something that can drive in the snow? Something roomy? Something with a specific powertrain? With car inventory being what it is, perusing it with a somewhat open mind is the best way to ensure you don’t come out empty-handed.
Protecting Your Purchase
Even if your credit score is 800 and you’re okay with buying a compact sedan with no options, you’re not walking away from that transaction without paying a tidy sum. Cars are expensive right now, period. Until supply can catch back up with demand, both new and used cars are going to be subjected to heavy markups. For a lot of people, reliable transportation is a necessity; their 12-year-old Corolla is on the fritz, and waiting out these price hikes isn’t an option. So, then what?
It’s important to ensure your purchase is one that will continue to hold value for years to come. I’m not talking about depreciation here, but the value it adds to your life. Pouring a bunch of cash into a new car just to have to spend even more on maintenance over the next several years is a situation best avoided, so it’s wise to invest in a vehicle manufacturer with a longstanding, positive reputation.
Picking a vehicle from a reliable brand is one way to help get your money’s worth out of your next car. Similarly, purchasing a vehicle from a dealership you trust is one of the less risky ways to go about buying a car. Sure, a vehicle from a dealership is going to be more expensive than one off of Craigslist, but with that extra money comes some peace of mind. Dealerships that are doing it right inspect their cars before putting their customers behind the wheel, so buying through a reputable dealership provides the protection of a lemon-free shopping experience. Plus, they’ll be happy to take care of any maintenance your car may need and will have the expertise to do it proficiently.
Purchasing insurance is another way to protect your asset. Everyone is required to purchase liability coverage for their vehicle, which pays for the damages caused by their vehicle if it’s involved in an accident and determined to be at fault. Coverage that takes care of your own vehicle, on the other hand, is optional. Make sure you know exactly what is listed on your auto insurance policy and what it covers. Blanket terms like “full coverage” don’t have set definitions in the realm of insurance, so you may not have certain coverages you thought you had, or you may be paying for something you don’t need.
It’s important to know what you want before you get ready to take those keys, but also keep in mind that what you want may not be available when you want it. Research early and extensively so you can apply your needs to the inventory at hand. When you do finally get those new keys, protect your investment with insurance. It won’t hurt to have a good service center in the back of your mind for when maintenance comes due, either. It’s a stressful time to be buying a car, but if you do your homework and have the flexibility to adapt to a few curve balls here and there, you’ll be fine.