Now—when life is so complicated—might not seem like the ideal to buy a car, but for some, the pandemic presents an unprecedented opportunity. With supply far outpacing demand and record low-interest rates likely to be the norm for years, according to Reserve Bank governor Philip Lowe, buying during the pandemic is one way of making the best of a bad situation.
A drive past any car lot confirms dealers have lots of inventory but few customers. As business owners, they know consumers need a compelling reason to venture out at a time when masks and social distancing are required.
Most people know they can shop for a car online, using manufacturers’ websites to spec a custom configuration for pickup. Still, even veteran web users may not be aware they can actually purchase online—or by phone.
Car dealers had to find creative ways to prosper despite restrictions. Some dealerships let consumers complete the purchase online, and once the order is complete, the car is shipped directly to the buyer’s door on a flatbed truck, in some cases, for free. Other dealers will deliver a vehicle to a buyer for a solo test-drive.
Getting financing in order before contacting the dealership can make any type of car buying easier. Most people do not have many thousands of dollars stashed away in savings right now, and if they do, they are prudent about large expenditures.
Though some dealers offer financing and insurance, buyers are not under any obligation to use their products. Shopping for competitive interest rates at a time like this makes sense. Turn to finance companies that specialize in personal, car, and peer-to-peer loans as they can often provide the lowest rates and best service, better even than a bank.
For new cars, promotions centered on financing are prevalent across all the car manufacturers. Hyundai has not only financing offers but also an assurance program that permits buyers to return the car without a negative mark on their credit if they are made redundant. There are also promotions surrounding payment deferrals, and this can be very attractive when financing through the dealership.
Consumers would be wise to spend as much time shopping for the right money to borrow as the car. After all, the loan will probably be with the buyer for the duration of ownership.
For car buyers that don’t need to act now, better opportunities may still be ahead if the country continues with restrictions. As time progresses and shoppers are still under restrictions, incentives are likely to increase to move whatever inventory they can.
Before signing loan documents, be sure the details match legal descriptions and records and that the car is in top shape. If accepting delivery off-site, complete a thorough inspection to be sure it is the vehicle ordered, there is no damage, and that the car includes all the features selected during the ordering process.
If purchasing from a private individual, be especially cautious. Some rules and regulations dictate what is legal and proper in the car-buying process. Buyers (and sellers) should understand these rules before agreeing.
It’s also essential to understand the car loan. It should be structured to meet the borrower’s needs. Consider how long the vehicle will be kept to avoid unnecessary fees. As an example, if the buyer borrows under the terms of a ten-year loan, then sells the car and pays off the loan in four years, the risk of expensive early payment charges exists.
Negotiating on the price and the extras is, for many, the most challenging part of the car-buying process, but with dealers in dire straits and lots full of cars, there is a new way of doing business, and car dealers are getting on board. More and more often, these business owners go to great lengths to ensure buyers feel welcomed and well-treated throughout the entire process. Shopping by phone or online, cars delivered for solo test-drives, and free delivery puts the car buyer firmly in the driver’s seat.
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