To Buy or Not to Buy

You’ve probably listened to and read lots of news stories of late that involve an interview with a large car dealership telling you to buy now or risk not getting the car you want due to inventory shortage. It’s clear from the comments on the online stories that many people are skeptical of the truth to these stories. So what is the deal, is there, or is there going to be, a vehicle shortage? Should you be running out to buy a car right now?


L James Johnson at the Car Connection writes an interesting article that you might want to check out. Essentially he says there is no easy answer that each sale is a case by case situation.

Certainly from our experience we have noticed the prices rising. It’s not that there aren’t some golden nuggets to be found but it has been shocking to see how high some of the vehicles are selling for at the auction in the last month of two. While customers may be skeptical about the rising prices, it would appear that dealers are not and are willing to/having to pay the price to bring inventory onto their lot.

To understand how a few less Prius’ may cause your used Ford Focus to go up in price, it would likely help to understand how dealerships (large and small) acquire their used inventory. There are lots of ways for an individual dealership to acquire a used vehicle: wholesale it from another dealer; dealers only auction; trade-in’s; lease returns; purchase direct from customer etc.. But the bottom line is that there is really only one way for the industry as a whole to acquire used vehicles and that is when consumers decide to trade-in or sell their used vehicle when purchasing or leasing a new one.

I think you might be starting to see the problem. If Jane the Car Buyer can’t get her hands on the Prius that she wants then she’s not going to be trading in or selling her Ford Focus.

I believe this problem is compounded with the fact that the auto manufacturers have been selling at close to or below cost for the last two years as they attempt to recover and simply can’t sustain those types of freebies and rebates. Johnson touches on this in his article as well, stating the days of the huge rebates etc., are quickly disappearing (at least for now).

Apparently prices have risen approximately $1000 on average on a used vehicle from this time last year. We’ve certainly noticed an increase, although I’m not sure it’s that high. So should you buy before they increase more or hold out?

I agree with Johnson’s advice that there is no one answer. As I’ve always maintained, relationships are so important when buying a car, if you need a car speak to your salesperson or find one you trust and together you will find a car of value. Yes, that deal may not be as great as it was a year ago – but value isn’t (or shouldn’t be) based on entirely on price. Is it the car you want, does it meet your needs, will you be taken care of after you drive off of the lot? These are the things that bring real value to your purchase. And, yes, there are still great deals to be found!

Until next time - Happy Driving!