If you truly want to buy or lease a car during the chip shortage, you better be armed with some important information.
With a shortage of chips the inventories are low, very few new vehicles are coming in soon and there are no real big deals. Many people are confused on whether to lease or buy and what to tell a salesperson or not to get the best deal in this crazy shortage of new cars. I’ll explain.
Let’s start off with being prepared, when you head to the dealer to look at car, truck or SUV; do your homework and know what type and model cars you want.
Don’t fall victim to the sales person tricky questions. Sales people are excellent at closing the deal, they know what questions to ask.
- Are you paying cash, financing or a both?
- Are you leasing or buying?
- What payments are you thinking?
- Are you trading in a car?
- What’s your credit look like?
- How much money are you putting down
- Your answer should be: I’m not sure yet. Tell them you are looking for the right choice first.
If you answer these questions upfront the salesperson will direct you to the highest payment you can afford and sell you the vehicles that gets them the most profit. So, never answer these question upfront, find the vehicle you want and then you can discuss that later. Stay in control of the deal.
With this crazy chip shortage, that may not end until the end of the year. What is the best deal? To lease or to buy?
Leasing gives you the option of immediately using the vehicles for a predetermined period of time with specific miles without putting in too much money out of your pocket. Buying, on the other hand, allows you to have ownership of the vehicle with no mileage restrictions.
Let’s cover 3 more tips to help you choose what’s best for you.
Should you buy or lease? Your decision will be based on:
1. Mileage you drive per year
2. Monthly payment you can afford
So what is the impact to you and your wallet?
If you lease, there are three must ask questions of the dealer so you don’t get “taken for a ride.”
1. Are there any lease specials?
2. What is the cars residual value? Residual value is the projected value at the end of the lease.
3. How many miles does the lease include and how much money down?
If you plan to buy, these are the three must-ask questions for buying in this market:
1. What is the price with my loyalty or conquest discount?
2. Term of the loan and interest rates?
3. Is this the best price?
In both cases, make sure to ask, how much are the documentation or doc fees? A documentation fee is charged by car dealerships to process a vehicle’s paperwork.
Many U.S. states don’t regulate the amount of money that a dealer can charge for a doc fee, though some states do. If you’re in a state that doesn’t regulate the fees, the dealer will hit you with a bill of several hundred dollars, even after you’ve negotiated the purchase price to a point you’ve mutually agreed on.
Some dealers don’t charge at all. It’s an important question.
Here’s the Bottom line:
Would I buy a new or used vehicle today? I would wait until later this year or 2022, if you can, if you truly need a vehicle now know that there is limited supply, few deals with most brands.
And remember don’t answer those questions up front, save them for when you are sitting down to discuss the deal and ready to put it on paper.
As for leasing versus buying, both good and bad merits. At the end of the day, the most important thing is that you do your research, ask questions and make an informed decision.
If you have additional questions, put them in the comments below and I’ll be happy to answer.
Don’t forget to check out our all-new website Car Coach Reports.
There are more features and design information that we cover in our video review. Check out the Car Coach Reports Ratings on this video before you buy any vehicle.
Lauren Fix, The Car Coach® is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host.
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