Labor Day sales are something of a tradition in the auto industry. However, this year consumers are likely to find fewer deals as the inventory levels on dealer lots have dropped to a record low.
Estimates are dealers have only a 20-day supply on hand because of the production shortfalls created by semiconductor shortages.
“The current inventory shortages make Labor Day a difficult time to find a great deal, particularly if you’re shopping for a popular truck or family-friendly SUV,” said Jim Sharifi, managing editor of U.S. News Best Cars.
“The flip side is that there are attractive lease and finance offers on a number of top-ranked cars and small SUVs, so the three-day weekend is an excellent shopping opportunity for some buyers.”
Data collected by Cars.com underscores the point but also suggest car buyers are willing to overlook the shortages. According to Cars.com, 42% of Americans are having trouble finding the car they want due to ongoing inventory shortages, and nearly 50% are willing to pay more to get it.
Few vehicles available cost more money
Meanwhile, the Bureau of Labor Standards reports used car and truck prices are up 41.7% year-over-year and continuing a long, steep climb since the beginning of 2021.
However, Cars.com suggests the shrinking inventories are raising prices for used vehicles offer consumers some leverage in negotiating their purchase.
“Car shoppers can leverage high trade-in values right now by visiting multiple dealerships to get the best possible price for their trade,” said Kelsey Mays Cars.com’s assistant managing editor and consumer advocate.
“A competitive offer on the trade can help offset what’s likely to be an elevated price for its replacement. While new and used vehicle inventory levels remain low, shoppers should also expand their search radius to include larger, more urban markets when shopping on Cars.com. In our dealer surveys, urban dealerships indicated a little less supply constraint than suburban and rural dealerships.”
Other ways to find a deal
Cars.com also suggest consumers widen their search area.
“If you find the car you want, don’t wait,” Mays added. “Automakers with limited resources are using them to build higher trim levels and prioritizing more popular models like SUVs and pickup trucks while cutting production of less popular body styles and specific models.
“Keep an eye on inventory levels in your area over the course of a few days. If there’s a lot of volatility — let’s say you see 40 or 50 cars one day and a few days later, it’s down to 25 cars — then you need to act soon. If volatility on the particular model you’re searching is less, by comparison, then you can play the long game and be a bit choosier.”
U.S. News & World Report also cites deals on models such as the Honda Civic and Honda HR-V, Hyundai Sonata, Hyundai Venue, Kia Forte, Lexus LC500, Lexus UX, Nissan Murano and Toyota Avalon as vehicles might want to target as they look for a deal.