The upcoming Memorial Day weekend is traditionally a big weekend for auto dealership sales, but buyers in the market will discover dealer inventories this year are tight and prices are high.
The semiconductor chip shortage has severely curtailed auto manufacturer production this year — that, coupled with extremely high buyer demand, means the retail auto industry is in what Kelley Blue Book calls “uncharted territory.”
“Simply put, you can’t buy what’s not there. At this point, shoppers who can wait to buy a car probably should, but for those who can’t afford to wait, it’s more important than ever to shop smart,” said Matt DeLorenzo, senior managing editor for Kelley Blue Book.
He suggests doing plenty of research before going to the dealership.
The average price of a new vehicle is now $40,000, and some buyers who want a particularly popular vehicle are paying over sticker price to get it, according to Kelley Blue Book. Can dealerships even charge more than sticker?
“If it’s a desirable model, they are not shy. People are ordering hot vehicles like Broncos, and those sales tend to see over sticker prices,” DeLorenzo said.
“But I guess if you need a car and you want a car, and you’ve put off a purchase for a year, you’re going to get more for your used vehicle, buyers are willing to take the plunge,” he said.
Lean inventory and high prices aren’t deterring new vehicle buyers.
Kelley Blue Book says more than 60% of consumers in the market are not planning to delay their vehicle purchase, and most aren’t considering smaller or less expensive vehicles, with 81% staying in their intended segment.
Used car vehicle prices are also at record highs, and there is a shortage of them as well. That bodes well for trade-in value, but it also means you might have a moneymaking opportunity sitting in your driveway.
“If you have an extra vehicle that you don’t need, this might be the time to sell it outright. There are a lot of dealers looking for cars to put on their used car lots. If you have a car you’re not necessarily looking to replace, now is the time to look at selling it.”
There probably are some good deals on lots this Memorial Day weekend. Kelley Blue Book has posted a list of the 10 Best Memorial Day Car Deals for 2021 online.