Tax refund or stimulus check? Here’s how to buy a car wisely
Few phrases provide as much immediate joy as “tax refund,” and some Americans will be able to combine their excitement about tax refund with another phrase by 2021: “stimulus check.” For many, this godsend could be the last piece needed to move forward in the purchase of a new or used car.
Connected: Cars.com data, survey shows pandemic drives car purchases
You won’t be alone: A Cars.com survey of 633 in-market buyers in March 2021 found that 27% plan to use their income tax refund to buy a car this year. This is a significant year-on-year increase in the first few weeks of the COVID-19 pandemic, when only 21% of In-market buyers reported plans to use their tax returns to purchase their car.
A lot has changed in this marathon year of pandemic life, including buying a car. New and used cars are selling faster than in pre-pandemic times and at higher average prices. However, thanks to new digital tools, shopping from home has become easier.
When you’re ready to buy, don’t delay
When looking for cars, you may find it harder to find the exact model you have been dreaming of. Automaker supply chains, including those for critical microchipswere hit hard by the pandemic. That keeps manufacturers from building as many cars as they normally would.
When you see the car you want, you need to move quickly. Cars.com data found that average prices for new vehicles during the pandemic increased 4.8% year over year compared to pre-pandemic times. And these cars listed on Cars.com sold a whopping 22 days faster than in the past.
Do you think you can only buy a used car? Not so fast. Cars.com data found that average used car prices were up 9.7% year over year. Used vehicles were selling five days faster than before the pandemic.
This isn’t a great market for car buyers, and if you can wait to buy, think about it. For those who can’t wait, you need a game plan.
When looking at Cars.com deals on a specific car, be sure to check how many are available in your area. When there is a lot to sell, there is no reason to believe that you need to act quickly. If the opposite is the case – there aren’t many vehicles available, or you see inventory dropping noticeably in a short period of time – expand your search scope to see if the number is increasing significantly. If it doesn’t, it’s time to reach out to a dealer and start a test drive and negotiation. And one more thing: with cars in short supply, don’t wait for automaker incentives to sweeten the deal. Less inventory usually means automakers aren’t making offers to move the metal.
You are Still Looking for a deal
By now, you should come to terms with the idea that car prices have gone up and incentives down, but that doesn’t mean buyers can’t find good value.
One vehicle that stands for value is the 2021 Hyundai Venue, winner of the Cars.com Best Value of 2021 forgive. The basic equipment of the venue, called SE, has an automatic transmission, keyless entry and an 8-inch touchscreen with ple CarPlay and Android Auto. This small, SUV-like hatchback doesn’t skimp on safety features either: the Venue SE also has automatic emergency braking with pedestrian detection and lane departure warning at a starting price of $ 19,935, including a destination fee.
Even with the inventory squeeze, you might be able to find a deal for a since. SUVs and pickups remain the strongest sellers, causing some sedans to stall on dealer lots. Sedans are more cheerful than their SUV counterparts of the same size. Cars.com data from late 2020 shows that the median list price for a new SUV on Cars.com was around $ 7,500 higher than that of a new car. They also tend to be more economical than SUVs, so your total cost of ownership is also lower.
Now we have your attention. If you’re ready to get serious about sedans, consider the compact class. Our Analysis of which compact sedan got the most for the money will give you some great cars to consider.
Car shopping in a pandemic and beyond
Shopping in the car has changed for the better. Many traders have put important parts of the process online. Cars.com has a badge that identifies dealers who offer virtual pointments and home delivery. And you can negotiate via online chat, email or text message – all from home.
So file this tax return before you go May 17th deadlineGet your sweet tax refund and spend wisely.
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The Cars.com editorial team is your source for automotive news and reviews. In accordance with Cars.com’s longstanding ethical policy, editors and reviewers do not accept gifts or free rides from automakers. The editorial team is independent of Cars.com’s advertising, sales and sponsored content departments.