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Car shopping for this year’s Black Friday deals is very different

David Paul Morris | Bloomberg | beautiful pictures

When it comes to shopping for a new car, this isn’t your typical Black Friday.

Deals and discounts that used to be plentiful this time of year are harder to come by. The ongoing global shortage of microchips – vital components needed for cars to function today – continues to hamper the production of new vehicles by manufacturers, leading to demand outstripping supply.

“In any other year, you should be able to find deals,” said Jennifer Newman, editor-in-chief of Cars.com. “This year, it will be limited.”

The supply imbalance has pushed the average price paid for a new vehicle to about $44,000, according to the most recent estimates from JD Power and LMC Automotive. 19.3% higher than October 2020, when the average transaction price was $36,887.

Consumer demand has also spilled over into the used car market, driving its value up. For vehicles 1 to 3 years old, the average price was $38,974, up 46 percent from $26,627 two years ago, according to car shopping app CoPilot.

Part of the reason for the record transaction prices is that car manufacturers have cut incentives because they generally don’t need to offer big discounts to sell cars right now.

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The average manufacturer discount was $1,628, a record low, according to JD Power/LMC estimates. That’s $1,871 down from $3,499 a year ago, and was first recorded as it’s 4% below the average sticker price.

Although the deals are few and far between, there are some notable deals, according to Cars.com. That includes factory discounts of $1,250 to $4,000 for the 2021 Jeep Renegade (depending on location and vehicle specs), which starts at just under $25,000. The 2021 Buick Enclave, which starts around $40,000, comes with a $3,750 discount. Both trades will expire on November 30.

According to a survey conducted by Cars.com, 63% of market shoppers said they plan to buy a new car later this year.

Your current car is your biggest bargaining chip. Dealers want your deals.

Ivan Drury

Senior Insights Manager at Edmunds.com

If you’re one of them, brace yourself for a price difference, says Ivan Drury, senior manager of insights at Edmunds.com. Buyers often pay more than the sticker price.

However, you may be able to negotiate an assigned value for a car you are dealing with.

“The current car is your biggest bargaining chip,” says Drury. “The dealer wants your deal.”

Alternatively, you might be able to strike a suitable financing deal, he says. Some manufacturers are still offering 0% (or close to) financing on certain products or models to the most trusted consumers. Otherwise, the average interest rate on a car loan is about 4%, according to Experian.

And if you find something you like, it might be wise to act quickly. According to Edmunds, in the first half of November, one in every 20 new cars was sold at the dealership. Almost a third sold in the first week and almost half in the first two weeks.

On the other hand, if you don’t find what you really want and you have some flexibility in your buying time, you can order the car instead of buying a lot.

“You can get exactly the kind of car you want,” says Newman, of Cars.com. “You just might have to wait a while.”

https://www.cnbc.com/2021/11/26/car-shopping-for-black-friday-deals-is-very-different-this-year.html Car shopping for this year’s Black Friday deals is very different

Sarah Ridley

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