Kyla Moles has bought many cars in her life, but her latest search for a vehicle felt more like a competition than a shopping expedition.
“It was a bitter experience,” says the 53-year-old office manager and mother of three. Her seven-month quest to buy a 2022 Hyundai Palisade finally came to an end in March, when she drove off the lot of a dealer that’s more than two hours from her Dallas home.
Anxiety came in many forms. Among them: Although she’s known for her bargaining skills, Moles found she had little leverage. Another brand’s dealers pressured her to buy a used vehicle for more than the price of a new one. She spent hours searching the online inventories of sellers in two states.
Mole’s disappointing ride can be traced to a nationwide problem: Demand for automobiles is outstripping supply, which is strained by a global shortage of semiconductor chips. New vehicle sales during the first quarter of 2022 were the lowest in a decade, according to research firm Cox Automotive.
As Moles and many other buyers have learned, buying a new vehicle today requires skill, patience and flexibility. Healthy doses of luck and digital savvy go a long way. If you haven’t purchased a vehicle recently, there are a few things you should know to prepare for the bumpy road ahead.
Fewer cars to choose from
You may be able to go to a dealership and find the exact car you want. If so, consider yourself extremely lucky. “Customers looking for a new vehicle shouldn’t expect to see rows of vehicles and every trim line on the lot like in years past,” says Marc Cannon, executive vice president at AutoNation.
Cars that arrive on dealer lots usually move quickly. JD Power and LMC Automotive predicted that 56% of vehicles would be sold within 10 days of arriving at a dealership in April.
Making a quick purchase decision is important, as is being ready to move. “I tell people the more flexibility you have in terms of things like colors and bells and whistles, the better your chances of getting something this year,” says LeeAnn Shattuck, who helps clients choose and buy. vehicles and bears the name “The Little Car.”
Thin inventories also mean few opportunities for testing. Since buying a car without driving it isn’t something Shattuck recommends, she had to get creative. She might suggest that customers test drive a car in a trim level or even a used one to test ride quality, for example, and how the seats feel. Renting from a source like car-sharing marketplace Turo can also be a solution, she says.
A third option is to borrow a friend’s or relative’s car – which is how Moles was able to test drive a Palisade.
Learn about “factory order” and “in transit”
Many people who can wait months for a new car are shopping through alternative means. Some manufacturers allow customers to order from the factory. Dealers usually handle factory orders, and many are handling a lot. “The new vehicle inventory that comes through AutoNation is, for the most part, pre-ordered,” says Cannon.
Another strategy is to put a deposit on a specific vehicle that is “in transit” from the factory to a dealership. You can find this status attached to cars being advertised on manufacturer and dealer websites.
If you see a car in transit that you like, contact the dealer it’s going to and ask if it’s still available for purchase and if you can put a deposit on it. Many will require non-refundable deposits that must be paid in person.
There is a third alternative that Shattuck does not recommend. You can pay a refundable deposit to reserve a car that dealers hope they will be separated – as opposed to a specific one with a Vehicle Identification Number (VIN).
“They’re taking your money without a car to tie your money to,” Shattuck says. “You should never put a deposit on a car that they don’t have a VIN for.”
Stuck at sticker price, or more
It is now common to pay more than the sticker price, which is also called the manufacturer’s suggested retail price (MSRP). Buyers paid above MSRP on 82.2% of all new vehicle purchases in January 2022, compared to 0.3% in January 2020, according to Edmunds.
“These days I feel like, if you hit the sticker price, it’s a good deal,” says Ronald Montoya, senior editor of consumer advice at Edmunds.
One way you can pay more than MSRP is if you charge for “dealer extras,” such as window tinting, paint protection, and filling your tires with nitrogen. “In the past I’ve refused to pay for them,” Shattuck says. “Now it’s more of an effort to minimize them or at least make them things that are useful [my client]like, ‘Can we have this instead of that?'”
Some traders are also dealing with a “market fix” that can increase the price by thousands of dollars. “You don’t get anything for it — they’re just charging you an extra fee because they can,” Montoya says.
Knowing that there is likely to be another buyer nearby, dealers may be unwilling to negotiate these additional costs. However, you may find a better deal if you widen your search.
“There are dealers who aren’t marking up their vehicles and will just charge you MSRP,” says Montoya. “I’d like to shop those, even if it means driving an hour or two.” The crowdsourced website Markups.org can help you see which merchants are paying the extra costs.
“The good news is that trade-in values are at record levels, so you can get much more than you ever thought possible for your car,” says Montoya.
Indeed, Moles was thrilled that the dealer gave her a trade-in offer that was close to what she originally paid for her 2017 Honda Pilot.
Moles had sought trade offers from more than one source, a strategy Shattuck recommends. “There is absolutely room for negotiation on your trade-in value,” Shattuck says.
The market is not going to change anytime soon
Rising gasoline prices and interest rates may reduce demand for new cars in the short term.
But the supply side of the equation will remain messy. “Improving inventory conditions likely won’t happen in 2022 as many customers are now waiting for their already backlogged vehicles to be built,” according to Cox Automotive senior economist Charlie Chesbrough.
Moles, meanwhile, is now a happy driver. “I think my waiting game was perfect,” she says. “[My car] It turned out to be everything I wanted.”
This article originally appeared on NextAvenue.org.