Angus Mordant | Bloomberg | Getty Images
If you want to take advantage of special Labor Day auto sales, a trade-in can make the purchase a little less costly than usual.
With dealerships still running out of stock, used cars fetch a premium. The average list price for a model for 2017 rose to $ 24,287 in August, $ 721 from July, and nearly $ 1,500 from June, according to data from Edmunds.com.
"Car buyers are experiencing exciting momentum now as local dealerships may pay more for a popular vehicle this year than they have in years past," said Matt Smith, associate editor of CarGurus.com.
Car-buying activity has picked up again after the decline at the beginning of the pandemic, despite new car sales in August, according to a forecast by J.D. Power and LCM Automotive were estimated to be 10% lower than last year.
And while production has rebounded after pandemic-related factories were closed, availability of around 2021 models may be limited.
In August, around 4.6% of sales – about 1 in 20 cars sold – were from 2021 models, up from 1.8% (1 in 50 cars) in July, Edmund's research shows.
Currently, 2021 versions make up 12% of the new car inventory on Cars.com, said Kelsey Mays, senior consumer affairs editor of the site. The rest are mostly 2020 models – this is where the best incentives could be found.
For example, with a starting price of around $ 17,500, the 2020 Kia Soul offers $ 2,000 off and an additional $ 1,000 on certain versions, according to Cars.com. Qualified buyers can get 0% financing for 66 months.
The 2020 Nissan Murano, which starts at around $ 31,500, offers $ 4,000 off plus $ 1,000 for the SL or Platinum fairings. Or you qualify for 0% financing with 72 months plus bonus money.
Used car values jump
Used cars (2017 model) August 2020 value March 2020 value Increase Ford F-150 $ 32,265 $ 28,541 $ 3,724 (13%) Toyota RAV 4 $ 21,204 $ 20,124 $ 1,080 (5.4%) Chevy Silverado 1500 $ 31,291 $ 27,299 $ 3,992 (14.6%) Jeep Grand Cherokee $ 27,489 $ 26,683 806 (3%) Toyota Tacoma $ 32,386 $ 28,736
Of course, the incentives for 2020 models could increase over the course of the year, Mays said. "The downside, however, is that these vehicles will be harder to find," he said.
Buyers should also be prepared for a different shopping experience.
At a company known for its face-to-face interaction, the pandemic forced many merchants to put much of the process online in March and April as downtime and orders stay at home.
And while the dealers have reopened their showrooms, as local regulations allow, it is worth calling ahead if you want to go as you may need to make an appointment.
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For example, more than 70% of the inventory on Cars.com comes with non-traditional sales like home delivery or a virtual appointment, Mays said. You may even be able to sign documents online, although it depends on the location.
"Dealers really go one step further to make sure customers feel safe," said Mays.
Also, be sure to compare traders, which is usually possible online. While they generally all offer the manufacturer's discount, they may offer a better deal on your trade-in, a lower interest rate on your loan, or some other benefit.
Experts also recommend obtaining pre-approved funding before contacting the dealer. If the dealer offers you better terms, that's great. If not, you have the best deal you can find. The average interest rate is around 4% but it depends on your creditworthiness and the terms of the loan.
As always, consider the financial implications beyond the vehicle price or monthly payment, such as: B. How the purchase affects your insurance costs and gas consumption.
"Labor Day is still a good time to buy a car," said Smith. "It's just a little different this year."
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