In a post pandemic world, many industries are still trying to get back to pre covid levels of operation. The car industry, which relies heavily on global supply chains, has been particularly hard hit. With an inventory shortage of new cars and high customer demand, the market result has been an overall longer wait time for buyers. Another result of new cars being in such low supply, has been an increased dependence on used cars. Most people do not have the luxury of the six to twelve month wait period it may take to obtain their ideal new car and have opted for second hand cars. Unfortunately for the consumer, the consequences have been a record high increase in used car prices. Moreover, with the low supply of both new and used cars, dealerships have narrowed the degree to which they were willing to negotiate pre-pandemic. Autos Consultants has put together a list of three salient points to help the customer negotiate for their next car.
1. Fair Interest Rates: In an attempt to slow inflation the central banks have been raising interest rates. Financial institutions have in turn raised their rates to compensate. A few years ago you may have seen dealerships advertise rates as low as .9% In 2022/2023 we have seen rates increase to as much as a staggering 9.99%. An important point to keep in mind is that dealerships may be marking up their rate. You have the right and should always make a point of seeing if the rate they are offering is the best they can do. You may be entitled to a better rate based on credit history or loyalty to a particular manufacturer.
Another option is to secure your own loan. You may be able to get a better interest rate and loan term from your bank, through a personal line of credit or home equity loan. This could lead to a 2% to 4% savings off your next vehicles monthly payments.
2. With inventories being as low as they are, dealerships are not selling as many cars as they did pre-covid. This has resulted in some attempting to tack on unnecessary accessories to squeeze as much money as possible out of each unit. These accessories may be items such as wheel locks, anti-theft devices, paint protections and warranties. None of these are mandatory and are even illegal to upsell in some provinces (Ontario and Alberta) if they have not been advertised as included in the price of the car. Keep in mind that these items are purposely made difficult to spot in sales. This is why at Autos Consultants we use our expertise to help our clients recognize some points they may have easily overlooked or extras they may have been pressured into buying unnecessarily.
3. Your current vehicle, whether it is leased, financed or owned outright is your best asset when purchasing another vehilce. With new and used car inventories being at an all time low, you can leverage your current vehicle when acquiring a new one. Many of our clients have positive equity on their expiring lease deals so never accept the first offer the dealership makes on a trade in. If you own your car or are financing it, you are eligible for some tax savings once it is traded in. There might be a rival dealership that is willing to pay more for your car even if you are not purchasing your next car from them.
At Autos Consultants, we have set up a great network of wholesalers which often pay more for used cars than typical dealerships.The results speak for themselves as we have been able to to get some amazing returns for our clients.
Contact us today to see how we can help you secure your next vehicle!
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