Car prices hit a record high. Why, and what that means for you.

The average new car price hit a record $38,255 in May, according to JD Power. That’s up 12% from the same period a year ago.

If you’re out car shopping right now, be prepared to pay big bucks for that vehicle. About two-thirds of car buyers paid within 5% of the sticker price in May, with some even paying above sticker. That means there are fewer deals to be had and fewer negotiations taking place. Why?

Due to a computer chip shortage at auto plants around the world, car dealers are left with a fraction of the vehicles (both new and used) than what they typically have on hand.

Since more people are buying used cars, they are becoming as difficult to find as new cars.

Here are a few things to keep in mind if you’re in the market for a new OR used car right now:

– Don’t expect a great deal: Don’t be surprised if the dealership only discounts the vehicle you’re looking at by a few hundred dollars, if anything at all.

– Search outside of your community: Not finding what you want in your area? Look at dealerships in the next town or city over. This can make a big difference in getting the car you want or getting a better deal.

– Ask for top dollar for your trade-in: One bright spot is if you have a vehicle to trade-in, because the shortage, trade-in values are at an all-time high. This can help cushion the pain from higher sales prices.

– Hit pause: According to Edmunds, the vehicle shortages might last for another six months or so. If you’re not in a hurry to buy a car their best advice is to wait.

Are you still considering buying a new or used vehicle right now? CLICK HERE to get pre-approved to assure you get the lowest payment and best deal possible.

Waiting it out? You could save big by refinancing your current car or truck. CLICK HERE to get started.

 

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