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Every week, join Whitney Quick as she helps you navigate life as a smart consumer. You'll cover everything in avoiding the latest scams, including phishing emails, medical equipment fraud, understanding layaway, hiring a reputable tax preparer, and even digital spring cleaning. Add to your toolbox and flip through your Consumer Handbook Thursdays during NPR’s Morning Edition at 6:42 a.m. and 8:42 a.m., only on KRCU.

Consumer Handbook: Buying a Car in a Seller's Market

Car dealer is giving key for a new car to a woman
praetorianphoto/Getty Images
Car dealer is giving key for a new car to a woman

Inflation, high-interest rates, and a microchip shortage that brought auto manufacturing to a grinding halt are just a few factors creating an incredibly tough market for anyone looking to buy a car. Experts say it’s unlikely the market will swing in favor of the buyer again anytime soon.

If you’re in the market for a new (or used) car, you may need to approach the process differently than in the past. Here are tips to find the car you want at a decent price.

Think about financing before you start shopping. If you have savings, buying a car outright is always the cheapest option. However, most consumers choose to finance their purchase, paying less upfront but more in the long run since you’ll need to borrow money and pay interest on your car loan. Whichever route you take, start by figuring out your budget.

Don’t get underwater. Many cars are still selling at prices over their sticker value. Consumers may be tempted to take out a bigger loan when it seems all vehicles sell for a premium. The problem is that cars are depreciating assets, and their value drops significantly as soon as you drive them off the lot. Without a decent down payment, you could quickly end up upside-down (a.k.a. underwater) on a loan, owing more than your car is worth. If your car gets totaled in a wreck or stolen, you could be left owing money on a vehicle you no longer have. If you can’t afford a larger down payment, consider purchasing gap insurance, which would cover the difference in the event of a severe accident.

Don’t count on discounts or even haggling. In the past, year-end deals and bartering to get a lower price on a car were part of the sales process. With limited inventory, getting a deep discount from a dealer trying to clear off excess inventory isn’t likely. On the bright side, your used car trade-in is likely worth a little more than it would have been pre-pandemic. Consider using that for a little extra leverage to strike a deal.

Cape Girardeau native Whitney Quick is the Regional Director of Better Business Bureau in Cape Girardeau, MO, and is responsible for outreach efforts in Southeast Missouri and Southern Illinois. Quick is a graduate of Cape Girardeau Central High School and Southeast Missouri University where she majored in public relations. Quick enjoys helping educate consumers in the southeast Missouri region by sharing consumer tips with groups and educating them about BBB’s resources.