Should you buy a new car, especially in this economy?

Car dealers are charging thousands over the MSRP. So hold off on that new car purchase?

The pandemic has driven economies to the edge. Manufacturers in all segments face acute shortage of raw materials. The project timelines have stretched beyond the normal. And the prices have skyrocketed for everything from groceries to houses. Cars have not been an exception.

The recent chip shortage has taken its toll on all manufacturers who lacked the foresight of the few. Car dealerships look like empty parking lots more than a car showroom. Amidst this grave sight, car dealerships are robbing consumers in bright daylight. Many charging thousands over the MSRP set by the car company. MSRP is albeit a suggestion, given its loose definitions.

In this market, new cars make less sense making used cars more desirable. But before you buy off one on one of the online sites or off a car vending machine, read some more. The pandemic has not spared the used car market either. Since the supply of new cars is dwindling, used car markets drove turned it into a sellers market. If you had a used car, this market guaranteed top dollar for it. The reseller in turn sells these products with an additional market driving the cost of a used car very close to and in some instances more than a new car.

The conundrum buyers are imposed with is to bite the bullet and pay over the MSRP and then possibly wait a few months to get their hands on a new car or pay the price of a new car and drive home or get a few years old car delivered to their door. Either way, it’s not a desirable situation to be in as a car buyer.