By Lauren Fix, The Car Coach
If you want to buy or lease a car during the chip shortage, you better be armed with some critical information.
With a shortage of chips, the inventories are low, very few new vehicles are coming in soon, and there are no real big deals.
Many people are confused on whether to lease or buy and what to tell a salesperson or not to get the best deal in this crazy shortage of new cars.
Let’s start with being prepared. When you head to the dealer to look at a car, truck, or SUV, do your homework and know what type and model of vehicle you want.
Don’t fall victim to the salesperson’s tricky questions.
Salespeople are excellent at closing the deal, and they know what questions to ask.
- Are you paying cash, financing, or both?
- Are you leasing or buying?
- What is the amount of monthly payment you want to make?
- Are you trading in a car?
- How’s your credit?
- How much money are you putting down?
Your answer should be, “I’m not sure yet.”
Tell them you are looking for the right choice first.
If you answer these questions up front, the salesperson will direct you to the highest payment you can afford and sell you the vehicle that gets them the most profit.
So, never answer these questions upfront, find the vehicle you want, and discuss that later. Stay in control of the deal.
This Crazy Chip Shortage May Not End until the End of the Year
What is the best deal? To lease or to buy?
Leasing gives you the option of immediately using the vehicles for a predetermined period with specific miles without putting in too much money out of your pocket.
On the other hand, buying allows you to have ownership of the vehicle with no mileage restrictions.
Should you buy or lease? Your decision will be based on:
- Mileage you drive per year
- The monthly payment you can afford
So What Is The Impact To You And Your Wallet?
If you lease, here are some must-ask questions to the dealer, so you don’t get “taken for a ride.”
- Are there any lease specials?
- What is the car’s residual value? (Residual value is the projected value at the end of the lease.)
- How many miles does the lease include, and how much money down?
If you plan to buy, here are three must-ask questions for buying in this market?
- What is the price with my loyalty or conquest discount?
- Term of the loan and interest rates?
- Is this the best price?
In both cases, ask for the total on documentation or document fees? (Car dealerships charge a documentation fee to process a vehicle’s paperwork.) Many U.S. states don’t regulate the amount of money that a dealer can charge for a doc fee, though some states do. If you’re in a state that doesn’t regulate the fees, the dealer will hit you with a bill of several hundred dollars, even after you’ve negotiated a mutually agreed on the purchase price. Some dealers don’t charge at all. It’s an important question.
The Bottom Line
Would I buy a new or used vehicle today?
I would wait until later this year or in 2022 if you can.
If you need a vehicle now, know that there is a limited supply, and there are few deals with most brands.
Remember, don’t answer those questions upfront. Save them for when you sit down to discuss the deal and are ready to put it on paper.
As for leasing vs. buying, there are both good and bad merits.
At the end of the day, the most important thing is that you do your research, ask questions and make an informed decision.
If you have additional questions, put them in the comments below, and I’ll be happy to answer.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum, and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.