New Car Purchases Require Careful Consideration Amidst Wobbling Economy

Jul 21, 2020 04:09 PM EDT | Staff Reporter

New Car Purchases Require Careful Consideration Amidst Wobbling Economy

(Photo : New Car Purchases Require Careful Consideration Amidst Wobbling Economy)

Every year, approximately 17 million new vehicles are sold in the USA, according to a number of renowned automotive research and forecasting firm. 2020 has been somewhat of a chaotic year thus far for the automotive industry, however. The economy has become increasingly shaky and the release of many new models has been delayed. Regardless of this, many Americans are still looking to acquire new vehicles this year. Buying a new car is a big deal, and there are many things that need to be considered before signing on the dotted line.  Apart from conducting sufficient research, budgeting, and acquiring financing where needed remain among the most important considerations when purchasing a new car.

Don't shy away from research

Finding the right car entails assessing your personal needs and conducting research into the various market offerings.  This is typically the time of year that dealerships start offering the first batch of new models. This year, things will be slightly different, making it more important than ever before to conduct sufficient research before buying a new car.  Prospective car owners need to consider everything from the number of passengers they need to carry to what safety features are required. Although social media may be considered a great source of peer reviews, feedback is often biased. Thankfully, there are a host of websites and organizations that provide insight into a range of characteristics such as mileage, features, and pricing.

Budgeting remains a top priority

It is widely believed that the best time to buy a new car is when dealers clear out inventory before the release of a new batch of models. While such a drop in new car prices may have been expected, it did not materialize this year. In June this year, the average new car sold for $36,332 - up 3.2% from the same time last year. Although some dealers are offering better incentives, setting up a budget prior to purchasing a new car remains of vital importance. You can do your budget a favor by looking for incentives such as the 43.8% increased discount offered by Honda in June. Volkswagen, Audi, and Porsche also boosted their discounts by 27.8% according to automotive pricing and information website, TrueCar.

Consider financing options carefully

Unless you are in a position to pay cash for a car, it will be necessary to consider various financing options for your purchase.  While credit conditions have been severely compromised for some buyers due to a struggling economy, it is still possible to get approved for a loan. It is also good news that interest rates have decreased over the past few months, reaching a low of 4.2% in June after sitting at 6% earlier in the year. Take some time to determine exactly how much you can afford in repayments every month. The general rule is that a car repayment should not exceed more than 15% of your monthly salary. Apart from the repayment, also remember to factor in insurance coverage, maintenance costs, and fuel expenses. 

This year has challenged the automotive industry in many ways. Luckily, thanks to some proper research, consumers will still be able to find good deals on the car of their dreams. 

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