Part of the American Dream is to own a car and I have noticed lately that this rite of passage has gotten more expensive recently. The generous American stimulus package placed thousands of dollars in American pockets allowing them to freely spend on anything and everything. Due to the pandemic, computer chip producers shifted production to simpler chips to satisfy the demand for “living at home” tech, like web cams. This reduced the global inventory of more complex and expensive auto chips causing a shortage with automobile manufacturers. So increased demand coupled with decreasing supply causes prices to rise rapidly. Car prices have risen over 16% since the beginning of January 2020 year and some say 10% in April alone. The average price of a used car now exceeds $25,000! I found a 2 year old vehicle listed on CARVANA that was priced $2,000 more than its original sticker price.
The Get WalletWise philosophy is to purchase a car at the right price. This is not the time. I visited several car dealerships and I have not received one follow up call! They don’t need to. They have the all the business they need.
I would advise waiting to the end of the year to see if the frenzy abates. By then, hopefully, the chip shortage will correct itself and the Americans with loads of cash have spent their gain. I would not buy a car now unless it is an emergency.
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