To buy or not to buy. That is the question. With an uncertain economy and a prediction that new car prices will continue to increase, it seems the logical answer would be “not to buy.” But, there are reasons that may make this actually a good time for you to buy. As automotive writer Jason Unrau states in CBT Automotive Network, there is a “notable unrest in the industry, like a storm brewing on the horizon.” This storm may work in favor of the consumer and make buying a new car in this economy actually affordable.
This “unrest” in the automotive industry, means that dealers are concerned that their sales will slip. This is unfortunate for sellers of new cars. On the other hand, this may be exactly the time for consumers to take advantage of this unrest and purchase that new car of their dreams.
Uncertainty in the Economy as it Relates to Buying New Cars May Result in a Slowdown of New Car Sales
Most people experienced in the field of car sales predict a slowdown in new car sales, largely due to the uncertainty of the economy. The fear of dealers and consumers is that new car prices will increase. Factors supporting that view include:
- Fuel prices are going up. This affects all car sales, but particularly SUVs, large cars, and pickup trucks. People are hesitant to buy a large vehicle with the uncertainty of how high gas prices will go.
- Steel and aluminum tariffs are expected to greatly increase the cost of building vehicles in the U.S. That cost will, of course, be passed on to the consumer.
- Foreign auto tariffs will increase the cost of buying foreign made vehicles.
- Overall uneasiness with the economy indicates that consumers will be reluctant to purchase a new car when they are uncertain about their future.
- Rising interest rates in general.
Although these factors may be bad news for new car dealers, they could be good news for the new car buyer.
Purchasing an Affordable New Car in This Time of Economic Uncertainty
Even if the cost of manufacturing the vehicle has increased, when new car sales are down, automakers discount their sticker price and dealers offer even more incentives. Cash rebates along with low-interest-rate financing have become almost routine. Dealers will jump through a lot of hoops to get you to buy a car. They want to meet their sales targets, and pass on to you manufacturers incentives which may allow them to sell you the new vehicle at close to the invoice price.
If you are okay with buying a new car that is not considered “popular,” you can save even more money. According to Kelley Blue Book as reported by Kiplinger, big sedans, like a Taurus, sit on the lot for an average of 124 days. Buicks recently sat for an average of 149 days. These new cars sat far longer than the average of 82 days. So, if you have always wanted to own a Taurus or a Buick, now is the time for you to present your proposal and drive one off the lot.
If you are looking for a more expensive automobile, like an Audi, Mercedes, Subaru, or a similar model, the new tax reform may make new car buying more appealing to you right now. There is the potential that you may save enough on your taxes that the high-end vehicle is actually affordable.
Sonny Johnstone is the managing member of Johnstone & Gabhart, LLP. When he isn’t practicing personal injury law, he enjoys spending time with his three children, playing sports, and travelling across West Virginia.