Why car prices are so high, tips to keep in mind when buying – WHIO TV 7 and WHIO Radio
DAYTON — If you were hoping to get a deal on a car this President’s Day weekend, you may want to keep dreaming according to AAA.
“Anyone looking for a car right now, new or used, is facing an unprecedented challenge,” Keith McIntyre, spokesperson for the AAA Auto Buying Program said in a release.
There is currently not only a shortage of used cars but new cars as well, according to AAA.
A chip shortage in January has slowed down auto manufacturing and in some cases halted production, according to the release.
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Rental car companies looking to buy more cars for their business as the pandemic winds down are having to turn to used cars, causing a shortage.
AAA Automotive said the supply chain issues causing costs to skyrocket is likely to continue into 2022.
According to AAA, at the beginning of last year more than 90 percent of new cars were sold below the manufacturer’s suggested retail price.
Now, the majority of new car sales are above the MSRP.
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AAA provided seven tips to keep in mind when buying a car :
- If you can wait, wait. it is less expensive to maintain/repair the current vehicle you own rather than negotiating the purchase of a new or used vehicle. AAA said basic vehicle maintenance may be the best investment you can make.
- Negotiate when possible. There are, typically, three negotiations that occur when purchasing a vehicle – the cost of the car; the finance rate; and the trade-in value.
- Understand your financing options. Buyers should obtain pre-approval from their financial institution before discussing finance rates with the car dealer.
- Stick to your budget.
- Save on Insurance. Once you narrow your vehicle choices down to two or three, call your insurance agent and obtain a quote for each vehicle.
- Do your homework. There are websites that can tell you the actual price you will pay for a new or used vehicle, help you to save on your Auto Loan and provide you with an Insurance quote so you can budget accordingly.
- Buy out your lease. If your lease is set to expire in the next six months, chances are the residual value you will pay for ownership is significantly less than the replacement value you will pay for ownership is significantly less than the replacement value.
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