With limited inventory and above-average wait times for new vehicles, buyers who plan ahead may encounter fewer speed bumps in their car buying journey
The hours of online research have paid off and you’ve finally figured out what car you want to buy. You head to the dealer with a budget in mind and your “wish list,” only to find there’s not one car like the one you want at the dealership. There’s no test drive and no opportunity to see (or smell) the inside of a new car. Wait times are anywhere from a few months to a year. What now? Do you buy used? Wait for the new car? And, with interest rates on the rise, how will that impact your auto loan?
“Navigating the current car market can be incredibly challenging and unexpected for some,” Marcus Wertz, Chief Lending Officer at Greater Nevada Credit Union, said. “Buyers ready to purchase a vehicle are navigating new obstacles. Our goal at GNCU is to ensure people don’t ‘under navigate’ the market and that they are provided access to affordable auto loans so they can avoid unintended financial speed bumps in their car buying journey.”
So how does someone looking to purchase a vehicle navigate the current market? Consumer Loan Consultants at GNCU, along with some of their dealership partners in northern Nevada, have weighed in with some key considerations for buyers right now.
If you require a car loan, research all available loan options:
Before heading to the dealer, buyers are encouraged to explore all available lending options. By doing so, they could end up saving hundreds of dollars each month. As one example, the GNCU Payment Saver Auto Loan program can save buyers an average of $188 a month.
“This is a popular loan option for people who don’t have a big down payment or for those who are looking for the flexibility of a lease with the option to own their vehicle after the loan is paid,” Wertz said. “The loan amount is based on the guaranteed future value (GFV) of the vehicle, which makes offering monthly payments up to 40 percent lower than conventional financing.”
The Payment Saver Auto Loan is available for most current and up to five-year old used cars, vans and light trucks. Future year, current year, and up to five year used vehicles can be financed for 24-72 months. No security deposit or first or last payment is required and buyers have the option to sell, trade, finance or return the vehicle at the program’s end. Additionally, there is no early payoff penalty and up to 100% financing is offered with no money down.
Understand lending rates:
It’s important for buyers to research current lending rates before they buy so there are no surprises with the overall cost of their monthly payment. With inflation at a 40-year high and steadily increasing rates, understanding of the rates available will arm buyers with the information needed as they negotiate the overall cost of a vehicle.
“Increased rates could have a significant impact on a monthly payment depending on the dollar price of the vehicle,” Melissa Martinez, Vice President of Lending at Greater Nevada Credit Union, said. “With the increased wait time for some vehicles, it is important for people to remember that the interest rate isn’t locked in at the time of purchase but, rather, when they pick the vehicle up.”
Explore inventory for the vehicle(s) you’re interested in:
Supply chain, chip shortages and overall demand all play an important factor when buying a car in today’s market. Vehicles that are more in demand, new or used, will likely cost top dollar. Five local dealerships in northern Nevada each shared what buyers can anticipate when they want one of their most in-demand vehicles, like new electric vehicles, crossover SUVs, full-size SUVs, and new trucks.
“Buyers are becoming accustomed to finding a new reality exists in the car buying process,” said one dealer who was interviewed. “Quite a bit of the showroom-display inventory is already sold. Buyers quickly find that pricing changes and they now routinely pay a significant premium over the MSRP window sticker price.”
Two of the local dealers said it’s not uncommon for them to sell vehicles at $15,000 over full sticker price.
Decide between used and new cars or trucks:
Given the limited inventory of popular and in-demand new vehicles, many buyers are exploring used cars or trucks as a purchasing possibility. What they are finding is that these, too, may be priced higher than they once were and sellers are hoping to get top dollar.
According to the dealerships interviewed, they are selling used cars for 30-40% more than then they used to.
According to Kelly Blue Book, “Americans are holding on to their cars longer than ever. The average age of a car is 12.2 years old.” Economic analysts and car-buying experts don’t expect the current vehicle purchasing challenges to go away anytime soon. With a bleak outlook, lenders like those at GNCU are working with their customers to ensure they get the best rate and loan options for their vehicle’s price point.
“Members can reach out to us directly or find our payment calculator online,” Martinez said. “The benefit of speaking with someone at GNCU directly is that we can advise members on the fine print and potential hidden fees they need to consider when purchasing a vehicle. If they end up at the dealer and are offered a better rate, we will be honest with them, tell them if we think it’s a great deal and if they should take it. But, there’s no harm in speaking to multiple lenders ahead of that car-buying journey as it could save you thousands of dollars.”
Greater Nevada offers a variety of auto loans, plus resources to help you shop for and protect your new vehicle. Visit gncu.org/Personal/Borrow/Auto-Loans to learn more.
This post is paid content and does not represent the views of This Is Reno. Looking to promote your event or news? Consider a sponsored post.
