The Independence Day holiday is just about as famous for new car deals as it is for fireworks and parades. Auto dealers usually pull out all of the stops to bring in crowds, offering cashback options and special financing.
But not this year. The ongoing new car shortage, caused by supply chain bottlenecks and a lack of computer chips, means that dealers don't need to offer much in the way of incentives. Some dealers may advertise sales but will ask customers to submit orders for future delivery. There just aren’t that many cars on the lot, according to analysts at Kelley Blue Book (KBB).
In fact, KBB reports that the sale price of a new car is at a record high. In May, the average new car sold for $47,148 – the second-highest total on record. Nearly every buyer paid more than the sticker price last month, with most buyers paying more than $1,000 over the manufacturer's suggested retail price (MSRP).
Being flexible could pay off
Even during a traditional sales period like the Fourth of July, car dealers simply don’t see the need to offer discounts. They have said for months that they need to make more per sale because they are selling fewer vehicles.
That means automakers and their dealers see little need to discount cars this summer. Brian Moody, KBB’s executive editor, says consumers who are shopping for a new car or truck should remain flexible when it comes to colors and trim levels.
The best deals, he says, will be for the most plentiful types of vehicles in the dealer’s inventory. That flexibility should also extend to types of vehicles.
“If you’re looking at a popular mid-size SUV, you won’t get a deal at all,” Moody said. “Those types of vehicles are transacting well over retail price in almost every case. Consider a midsize sedan instead if you can make that work.”
Shoppers might also consider looking at less popular brands. KBB reports that customers who purchased Fiat, Buick, Ram, and Lincoln vehicles were most likely to get a deal below the sticker price.
While consumers might save money buying a late-model used car instead of a new one, they probably won’t save that much. Because of the new car shortage, some three-year-old models are selling for more than they did when they were new.
As we reported earlier this week, the average price of used cars surged 16.9% in May, with the price of electric vehicles and hybrids rising the most.