Planning to buy a car? Nowadays, you can own a car for cheap — a new car at that!
If you’re in the market for a new car, you’re pretty much in luck. According to Comerica Bank’s Auto Affordability Index (an index that gauges how cars cost across the nation), new autos are at their cheapest point (okay, most affordable) since 1979. What they’re reporting is that the average new vehicle now costs $1,700 less than in the beginning of last year. And this is just the beginning because apparently, more price cuts are along the way due to a supply glut in the auto industry.
So the recommendation by some talking heads is that you should consider adding new cars to your car shopping list, if you’re looking to pick up some new wheels. Here’s what this CNN article says about this phenomenon:
It’s really just a classic case of supply and demand. The used car market is up about 23 percent, and new car sales are down 34 percent, according to CNW, a highly regarded marketing research firm. More new cars on dealer lots mean more deals for you.
That’s just sweet! But there’s a warning attached to this advice — you need to act fast since this is not a permanent trend. Just like anything else about the economy — this market can shift like the wind with the balance of supply and demand changing at anytime. The rule of thumb is that it’s better to buy used rather than new when it comes to motor vehicles. However, there can be reversals in the market like this on occasion, which consumers can take advantage of.
So if you’re set on buying a car, get your financing lined up (unless you’ve got enough money saved up), then visit sites like CarsDirect.com and Zag.com to receive price quotes on the car(s) that interest you. When you’re armed with these quotes, you’ll be able to comparison shop at brick and mortar car dealers more effectively (and the sales agents can’t waste your time as easily).
My family actually has a couple of cars that are both getting long in the tooth, but we’re following our financial rule here to try to “drive them into the ground” in order to save money by deferring new car costs. We’ll continue to drive our cars as long as they can still function. It’s sure tempting to start looking around for their replacements now, but I’m going to cross my fingers and hope that the car market will still have cheap new cars for sale (and waiting for us) come next year, when we’ll be ready to shop around.