It’s no secret that the COVID-19 pandemic has upended car-buying as we know it — at least for the short term. Take advantage of current car-buying programs and deals after you understand how they affect your bank account for better or worse.
1. Buy a used car to take advantage of market trends
Many car makers saw drop-offs in 2020 new car sales, although the slump has leveled somewhat compared to the start of the pandemic in March and April. For instance, Nissan reported over 25% fewer sales globally from April to September 2020, and American Honda reported a 19% decrease overall for the year.
On the flip side, used vehicle dealers are seeing rising demand even outpacing the cars available for sale, according to Consumer Reports. As further confirmation, Cox Automotive reported a 4% rise in certified pre-owned vehicle sales from September to October 2020, and Carvana stock has skyrocketed from $30 to $200 as more shoppers value its online service and nationwide delivery.
- What it means for new car buyers: You could get the most car for your money if you go after financing deals and price cuts on a new car, but expect lower trade-in values as dealers compensate for their slow-moving new vehicles.
- What it means for used car buyers: Expect many older models to cost more than they might have last year. You might score a deal if you buy from a private seller looking to sell fast and upgrade their car.
2. Shop and buy online — and test-drive for up to a week
Sites like Carvana and Fair have become more popular during the pandemic because it’s easier than ever to shop for and buy a car online. Services like Carvana, Vroom and CarMax offer used cars and in-house financing to make the process as quick as possible. There are also a variety of apps you can use to buy a car to help make research simple.
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3. Visit a dealership — but take precautions
Manufacturers and dealers are also expanding delivery services. But if you have to go in person, consider dealers with less foot traffic like a rural lot — and be sure to ask about cleaning procedures.
Before you go, see if your dealership offers contactless test drives and has an online inventory you can browse. There may also be a way to sign your sale documents online and have the vehicle delivered to your home. Since many dealerships now have to seriously compete with online retailers, they may be more flexible when you’re ready to compare vehicles.
Inspections are still a must
You can buy your car online or visit a dealership. Either way, you need to have your car inspected before you finalize the purchase. Check with local mechanics to see what type of safety measures they have in place, including how they clean vehicle after inspection. This will ensure the vehicle is in good working order and can address any issues a sales person might not disclose.
4. Take advantage of manufacturer deals
Need another car but worried about your job during new coronavirus waves? A few manufacturers like Ford, Hyundai and Volkswagen are helping with job loss protection.
How it works
Each manufacturer has different requirements for its protection programs, and you’ll have to meet criteria to qualify. You’ll want to read the fine print before signing your name.
- Volkswagen’s Pledge program allows qualifying buyers financing through the VW credit center to waive up to six payments if they lose their job. You won’t pay any extra for the protection. However, you must be unemployed for over 30 days before you’re credited with a benefit up to $750, and job losses within 90 days of buying won’t count.
- Ford’s Buyback program lets you return your 2019–2021 model financed through Ford within one year if you lose your job. You’ll be credited the vehicle’s current value according to the National Automobile Dealers Association (NADA) after taking out any amount you owe. If you owe money beyond the car’s value, you can get up to $15,000 waived to help pay off your car loan.
Other manufacturers — and some lenders — may offer similar protections and options like deferment. If you’re not sold on a specific make or model, factor this into your choice to build yourself a solid safety net.
5. Apply for preapproval for the lowest rates
Car makers still are enticing buyers with 0% APR financing deals, deferred payments and cash back for buying certain models. Brands that are offering deals on new cars include:
But you aren’t stuck with manufacturer financing. Compare car loans from banks, credit unions and online lenders to see what interest rates you could qualify for and how much car you can afford. By doing this, you’ll be able to get the best deal on both your car and your loan.
To get the best deal during the coronavirus, research financing offers, job loss protection, delivery services and cleaning procedures. If you’re in the market for a used car, consider holding off until demand lowers or dig deep to find the best-priced option. But no matter what, compare car loans to make sure your financing fits your lifestyle for the next few years.
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