Many people will be enjoying the weekend holiday and some may end up shopping. But for all it might not mean a trip to the mall, but rather the new car lot.
Nationwide, sales are up by 5 percent from this same time last year and in 2015, new car sales are expected to top 17.5 million. That’s up from about ten million during the recession. “That’s a huge increase, and that’s impacting all of the dealerships and manufacturers,” says Mark Medinger of Savannah Hyundai.
Medinger says “it is a big weekend with people having extra time off and our inventory’s huge right now.”
From the popular Elantra which Medinger makes a point to say comes with many standards like “power locks and windows and a nice stereo with four doors and plenty of room for a family” to Hyundai’s higher priced models, a lot of people are definitely looking.
The economy is certainly the reason for most shoppers to be out car buying. “Well, they’re more comfortable with their jobs and their budgets and feel like they can rely on them a lot more,” Medinger says. Plus, he says during the recession, many people kept their cars longer. Those cars are now older and people just need a newer vehicle.
Whatever the reason for someone to stop by his car lot, Medinger agrees that with new sales come more informed buyers.””They can shop other dealers in a matter of five minutes online so they’re very knowledgeable when they come in about what they want to pay and what they think the price of the car should be,” he told me. “And you don’t need a computer to do it, just pick up your phone. So, if we aren’t ready to embrace that kind of customer and the knowledge that’s out there, we wouldn’t still be here.”
While most dealers offer a variety of financing options, one reason that sales are up is that financing in general, is freeing up from the darker days of the recession.
Richard Reeve from Consumer Credit Counseling says there are things a a consumer can to do prepare to buy a car. He suggests pulling your own credit score (it may cost you up to $15) as opposed to having a number of dealerships do it. That way, he says you will be informed on what your score actually is and what kind of financing terms you should be able to receive, including interest rates. “For most people a car is the second biggest purchase they will make. A home being the first. And if they’re not home owners, then a car might be the biggest purchase,” he says.
As in most purchases, Reeve advises doing your research, knowing what you need (maybe verus what you want) and what you can afford. He says the price of the car is important, but so are the terms of your loan and any trade in you may have. He says consider going to a credit union ahead of time to see what kind of loan you might be able to receive and having that knowledge when you shop for a car.
What about manufacturer or dealership deals that offer zero percent interest for example? That can be a great deal, but just make sure you are confident you will qualify. And in most cases, a more expensive vehicle may mean longer loan terms. Is that a good or a bad idea? It might be fine for you if you get the vehicle you want to buy. But Reeve says understand if you decide on a 72 month loan for example that you are paying for that car for six years. So make sure the vehicle is reliable and something you want to drive for that length of time.
He also advises to check out the true ownership costs of a car, which on a newer vehicle he says may average about $35 per month. (Some dealerships do offer free oil changes and other perks for a certain period of time if you buy a new vehicle, so keep that in mind.)
Medinger says now a lot of manufacturers are actually listing some of those ownership costs on the sticker, including expected maintenance and gas costs.
He also says with lower gas prices, some consumers may opt for bigger SUV’s. “but when gas spikes up, they often come looking for a more fuel efficient vehicle,” he said.