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Car Buying Tips for 2022: How to Navigate the Storm

2021 was an unusual year for the automotive industry, to say the least. While customer demand for new cars rebounded from the economic uncertainty of 2020, automakers found themselves unable to meet that demand because of semiconductor chip shortages and supply chain problems. So what should car shoppers expect for 2022? Much of the same, unfortunately.

"Competition for new vehicles will be fierce as inventory shortages persist in 2022," said Ivan Drury, senior manager of insights for Edmunds.

Shoppers today must contend with a limited selection, dealership markups, little to no discounts, and a greater sense of urgency to move quickly on a deal. With this in mind, here are five ways that car buying has changed, along with tips on how to manage it.

Ongoing vehicle shortage means higher prices

Vehicles that make their way onto the lot are more likely to be in more expensive trims and either marked up in price or stuffed with numerous dealer-installed accessories that achieve the same effect. You'll also find that dealerships are much less likely to come down on price since they know there aren't many other options available. It's a textbook case of supply and demand.

These days, paying MSRP might actually be a "good deal," relatively speaking. Experts are predicting the chip shortage will last well into 2022 and possibly into 2023.

Tip: If you're in need of a car, we recommend casting your net out farther, as this will increase your options and not every dealership is marking up their vehicles. If you see one you like, be prepared to move quickly — it may not be there the next time.

You're more likely to order your next car

One way to avoid the markups and dealer add-ons is to order the vehicle. According to a recent Edmunds survey, more than half of consumers said they would be willing to place an order for their next vehicle. This ensures that you get exactly the color and options that you want, provided you're willing to wait roughly six to eight weeks.

The basic idea is that ordering a vehicle saves the dealership money on lot fees and insurance. Those savings can then be passed on to the consumer. The "savings" these days, unfortunately, might mean simply paying MSRP and not being charged for dealer add-ons.

Tip: The easiest way to order a vehicle is to use an automaker's website to build the vehicle configuration you want and then send that information to your preferred dealership.

Leasing will be less enticing

Edmunds analysts say that leasing has become less popular as of late and may continue in the coming months. As inventories remain low and the cars that are in stock tend to be more loaded with options, they're less likely to be targeted by automakers' leasing programs since these vehicles typically suffer higher depreciation than their midtier and lower trim counterparts.

Tip: If your current lease is ending soon, be prepared for reduced leasing options. "Serial lessees might need to do some extra planning and research before their lease agreement ends to find affordable options," said Drury. You can also consider buying out your lease — it will likely be a relatively good deal since the selling price was calculated years before the market took a turn.

Used vehicles may not offer relief

Used cars have also taken an indirect hit from the chip shortages. Many new-vehicle shoppers turned to the used market for a better selection or respite from the higher new car prices. But this caused its own shortage and record-high used car prices. Edmunds analysts predict that in the coming year, the average used vehicle price will surpass the $30,000 mark for the first time. Prices for 1- to 3-year-old vehicles will also often approach or exceed brand-new pricing.

Tip: Used-car shoppers on a tight budget need to either shop for an older vehicle, while being mindful of the added wear and tear, or consider a new car, which might provide a better value from its warranty and have a lower interest rate when compared to used. The good news is that trade-in values are very strong, which can help offset some of the higher pricing out there. You can get a cash offer on your car on Edmunds, and the offer is good for seven days at participating dealerships.

Dealerships will be more open to home deliveries

Having a vehicle delivered to your home was something of a "secret menu" item in past years, reserved for VIP clients or those who were in the know and requested it. But after the COVID-19 pandemic forced the shutdown of countless dealership showrooms, home deliveries became almost a necessity. This will vary by location and brand, but your chances of wrapping up a car deal at home are significantly better than before.

Tip: Make sure to ask for a home delivery when making a deal on the car. Filling out any finance paperwork beforehand will greatly speed up the process. When browsing new inventory on Edmunds, you also can sort the search tool to filter vehicles eligible for home delivery.

Edmunds says

It will be slim pickings for both new- and used-car shoppers this year, but if you cast a wider net and are prepared to act quickly on a car deal, you may be able to buy a great car at a price you like.

Related Stories:

Car Shopping Tips During the Global Microchip Shortage
Vehicle Trade-In Values Hit All-Time High

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