Inflation is driving up car prices. 6 tips for buying in 2022. – CBS News
2021 was an unusual year for the automotive industry. While customer demand for new cars rebounded from the economic uncertainty of 2020, automakers found themselves unable to meet that demand because of semiconductor chip shortages and supply chain problems, and prices for both new and used cars skyrocketed.
So what should car shoppers expect for 2022? Much of the same, unfortunately.
“Competition for new vehicles will be fierce as inventory shortages persist in 2022,” said Ivan Drury, senior manager of insights for the auto website Edmunds.
Along with shortages and supply chain issues, drivers also have inflation to thank for continued price hikes for cars in 2022. Overall consumer inflation soared 7% in 2021, the biggest increase in nearly 40 years, the Labor Department said on Wednesday. Used car and truck prices, a main driver of the surge, shot up 37% last year, with the average used vehicle now costing $29,000, according to Edmunds.
Shoppers today must contend with a limited selection, dealership markups, little to no discounts, and a greater sense of urgency to move quickly on a deal. With this in mind, here are six ways that car buying has changed, along with a few tips on how to manage it.
1. Vehicle shortages mean higher prices
Vehicles that make their way onto the lot are more likely to be in more expensive trims and either marked-up in price or with numerous dealer-installed accessories that achieve the same effect. And if that wasn’t enough to contend with, you’ll find that dealerships are much less likely to come down on price since they know there aren’t many other options available. It’s a textbook case of supply and demand.
These days, paying MSRP (or Manufacturer’s Suggested Retail Price) might actually be a “good deal,” relatively speaking, Edmunds reported.
Tip: Casting your net out farther to increase your options. Not every dealership is marking up vehicles. If you see one you like, be prepared to move quickly because it may not be there the next time.
2. You’re more likely to order your next car
One way to avoid the markups and dealer add-ons is to order the vehicle from the manufacturer. This ensures that you get exactly the color and options you want, provided you’re willing to wait roughly six to eight weeks.
The basic idea is that ordering a vehicle saves the dealership on lot fees and insurance for vehicles parked on- or off-site, and it can then pass the savings on to the consumer. The “savings” these days is paying MSRP and not being charged for dealer add-ons or the convenience of having a vehicle right away.
Tip: The easiest way to order a vehicle is to use an automaker’s website to build the vehicle configuration you want and then send that information to your preferred dealership.
3. Leasing will be less enticing
Edmunds analysts …….