Here’s the latest reader question, along with my reply!
Fran asks: I read your column about car buying the other day and am in general agreement but wanted to ask whether you think it makes more sense to hold off to see how things develop? Isn’t it possible that prices could go down even more?
My reply: Prices absolutely could go down and probably will. But inflation could also go up, making your dollars worth less. This is a tricky thing – deciding when to pull the trigger. Not too soon.
But not too late, either.
What would I do? I’m pretty conservative with money. Though I’ll happily ride without a helmet and drive without a seatbelt (at 140 MPH) I am leery of taking risks with money. So, I’d probably be shopping now rather than later – if I were in the market for a car. My sense of things – and I base this in part on knowing a lot of people in the business – is that anyone with cash or a loan in place is in the catbird seat. People who want to sell need to sell. In many cases, badly. This includes dealers as well as private sellers. So long as your offer isn’t ridiculous my bet is they’ll snap at it.
And the best part is – what have you got to lose? If they don’t snap at your offer, you lose nothing. Wait. And then try later – when the seller’s inclination to snap at your offer may be greater.
. . .
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It won’t be much longer that everything will be inflated like food already has been. I know the average daily price of almost everything I buy. Beer, booze and soft drinks are steady at the moment. I have no reason to believe they’ll remain that way.
My opinion (And that’s all it is- but I do work for some clients who sell used vehicles)) is that prices are staying high because people are flush with money, between the “stimulus” and pimped unemployment benefits and everything- sellers aren’t desperate yet. Wholesale prices are down 10%, but retail prices are only down about 1%, according to the big dealer auctions.
My personal feeling is that we will not see any serious dealing/price drops until the economic devastation of the “lockdown” and stimulus BS really kicks in(Which could well be 6 monthjs to a year from now, or more, depending on what happens in the near future). I’m not seeing any real deals yet, so I would think that if the purchase is discretionary, it would likely be better to just wait.