Shoppers of all sorts look forward to Black Friday each year, anticipating great deals, but for anyone looking to head to their nearby car dealer hoping for a bargain, you’re likely to be disappointed.
The oft-chronicled dearth of vehicles courtesy of the semiconductor shortage borne out of the pandemic is pretty severe. According to Edmunds, new vehicle inventory is down 77% in November compared to 2019’s totals.
“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.”
Low inventory means fewer deals
Normally, there should be about 3 million new vehicles either on dealer lots or in transit, according to historical industry norms. Right now, however, there are barely 1 million. Fewer vehicles means quicker sales, or in some instances, no opportunity buy at all.
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.
On top of that, what you will buy is definitely going to cost more, which has been the case for much of the past two years. 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.
There is a bit of a silver lining in all this, actual monthly payments have risen by a more modest 12% because trade-in values also have surged to record levels, Tyson Jominy, J.D. Power’s head of analysis for dealer sales data, told TheDetroitBureau.com.
How to get a deal anyway
Dealers will tell you they have inventory, it just may not be the vehicle you want. But if you want a good deal on something new, flexibility is your friend.
- 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.
The other way to get a deal is to special order a vehicle. Some automakers, like Ford, are offering special incentives to buyers who go online and order a 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.”