- New vehicle inventory is down by 77% in November 2021 compared to November 2019 due to ongoing supply constraints created by the global microchip shortage.
- Prices for new and used vehicles are at record highs: Edmunds data reveals the average transaction price for new vehicles climbed to $45,598 and for used vehicles to $28,607 in October 2021, a 14.3% and 27.4% increase year over year, respectively.
- Competition among shoppers for the limited number of cars on the lot is fierce: According to Edmunds data from the first half of November, one in 20 new vehicles sold the same day they hit the dealer lot. Nearly a third of all new vehicles sold within the first week, and almost half of all new vehicles sold within the first two weeks.
- “Black Friday and the end of the year are typically opportunities for consumers to find deals on new cars, when dealerships are eager to sell leftover inventory. That isn’t the case this year due to ongoing issues created by the global chip shortage,” said Jessica Caldwell, Edmunds’ executive director of insights. “Although inventory appears to finally be stabilizing, it’s still historically quite low. And since demand is stronger than normal, you can’t expect to see the same discounts you normally would. Realistic expectations need to be set if you’re planning to make a car purchase this holiday season, because it’s tough out there.”
For consumers who want to buy a car now, Edmunds experts advise that you:
- Consider alternative vehicle types (e.g., sedans instead of SUVs) and colors, and be willing to compromise on features.
- Expand your search geographically for more selection in a market with low inventory.
- Leverage your greatest asset: your current vehicle. If you own a vehicle, your car’s used value is one of your biggest negotiating tools in offsetting the purchase price of your next vehicle. Use it wisely — shop around for appraisals, including on edmunds.com/appraisal/.
But Edmunds analysts note the savvier move, for consumers who don’t need a new vehicle right away, is to factory order their vehicle.
“If you’re going to pay top dollar for a vehicle, which you certainly are in our current car shopping environment, get the vehicle with the options you want, in the color you want, by configuring a vehicle to your preferred specs through an auto manufacturer’s website and placing an order with your preferred dealership,” said Ivan Drury, Edmunds’ senior manager of insights. “Just keep in mind that you might need to wait a few months for your vehicle to arrive, so this is really only the ideal option for those who can wait that long.”
Edmunds experts put together the following insider tips for consumers considering ordering a new car through their local dealership this holiday season:
- Do your research and plan ahead. Each manufacturer has slightly different waiting periods for factory orders. If you have a lease expiring or know you need a new vehicle by a certain date, make sure you factor that into your purchase.
- Don’t get too carried away with options. Think twice before checking off every item on the options list. Doing so will cost you more, and when you sell the car you might not recover the extra cost.
- Find the right dealer. When you order a vehicle your relationship with the dealer becomes critical. This is the organization you’ll be talking to throughout the process, from taking your initial order to setting up delivery. Choose your dealership at least as carefully as you would if you were buying a car off a lot. Read dealer reviews on sites like Edmunds and talk to friends who have purchased there to ensure you’ll have a smooth experience. Make sure you have a salesperson who is knowledgeable about the process.
- Make sure the deposit is refundable. Most dealers will require a deposit when you’re ordering. Make sure this deposit is refundable in case you change your mind or find the right vehicle somewhere else.
- Get it in writing. Once you’ve talked numbers and decided on the options you want, be sure to get the details in writing. Make sure this document has the correct information and the “out the door” price you agreed upon to avoid any surprise fees or markups once the vehicle arrives.
“Most vehicles we’re seeing on dealer lots today are loaded with extra options, an average of $5,000 more than the trim’s starting price,” said Drury. “When you special order a vehicle, you decide the content level, so either save by sticking to standard features or pick the specific creature comforts that are most important to you. Just know that if you fully load the vehicle or go outside of the most common color combinations, your specific tastes might not be shared by other car shoppers a few years from now, making a future sale more challenging.”