If you’ve changed the channel lately, chances are you’ve come across memorial day sales ads at car dealerships. And while Memorial Day weekend is known for deep vehicle discounts, this year’s sale will have an added consideration.
The average used car costs about $28,000, and the average new car is even higher, about $47,000, according to the Kelley Blue Book. But this high cost of the vehicle, due in part to ongoing supply chain issues, doesn’t mean a deal is out of reach — just be prepared to do some preparation ahead of time.
this year’s memorial day sales will be limited
Historically, Memorial Day has been one of the best times to find a great car deal. but this year will probably leave drivers with less luck when it comes to making a purchase.
limited supply of vehicles
The industry still can’t catch up with consumer demand. dealerships are selling vehicles at lightning speeds due to the small number of vehicles available. Cox Automotive reports a 1.5 million decrease in vehicle supply for March compared to 2021.
When factories halted production, shortages of semiconductor chips led directly to fewer vehicles at the dealership. this scarcity created a time of greater need and scarcity. And when you shop this Memorial Day weekend, chances are you’ll find even less vehicle availability.
With fewer vehicles available, dealers may not feel as much pressure to sell vehicles as in years past. With so many drivers desperate for cars, they aren’t as motivated to offer incentives like cash back or rewards.
in years past, this holiday weekend was filled with different incentive options, but dealers won’t really need them to sell vehicles in 2022. j.d. Power notes in its 2022 forecast that incentive spend per unit is expected to reach $1,044, down from $3,334 just a year ago.
Less supply of vehicles also means more drivers competing for the same vehicle. This increased competition is likely to make getting your dream vehicle more of a challenge. many buyers are willing to spend more than the asking price to get the vehicle they want before another driver does.
This changes the playing field enormously and gives distributors the edge when it comes to pricing. The median price of a used vehicle sells for about 28 percent more than last year. And with a 2021 Cox Automotive Survey finding that 42 percent of buyers are willing to pay more than MSRP, you’re almost guaranteed to face some serious competition.
how to get the best deal despite the constraints
If you’re set on driving with a new set of wheels after next Memorial Day weekend, here are some tips you can follow to get the best deal, even with fewer vehicles available on the lot.
test drive before the weekend
One way to save time and make sure you’re in and out of the dealership before the competition is to test drive it early. This way, you can walk in ready to buy instead of feeling pressured to sign a deal on a car that isn’t fully sold. To schedule a test drive, search for cars online, then contact your dealer to schedule an appointment in advance.
buy outside your zip code
While the pandemic has caused vehicle supply challenges, it has also accelerated the shift to online shopping. take advantage of this new opportunity to see if there are vehicles available outside your area.
Buying a car online is a process similar to buying in person and you can save some extra money in the process. And with some areas offering better prices, it might be worth traveling to a more affordable city to find your next vehicle.
be flexible with your choice of vehicle
With fewer vehicles lining up on dealer lots, now might be a good time to expand your horizon when it comes to vehicle make, size and style. Most drivers tend to focus narrowly on a particular make or model, so flexibility could mean getting a vehicle while others don’t. Consider checking out Bankrate’s 2022 Winners for the most reliable vehicles when you shop.
Buying a vehicle is a big financial decision. After considering the changes to this year’s holiday weekend, decide if it’s really worth the price and effort. If you’re not actually saving money shopping this Memorial Day weekend and can afford to wait, being patient may be a better option. consider setting aside the surge in holiday shopping and instead wait for more vehicle inventory to become available. you may find yourself with shorter lines, more options, and potentially better prices.