If You’re in the Market, Now Might Be the Best Time to Buy a CarJun 09th, 2020
As we have all been forced to deal with the fallout from shutdown policies, we have also had time to digest the economic information that has resulted. One defining example has been automobile sales, which have felt the effect as acutely as any other other industry. But manufacturers’ pain is consumers’ gain as the OEMs have collectively reached into their goodie bags with a collection of attractive incentives. For those consumers who have wanted a new vehicle the last three months, but have been wary of visiting a dealership, as the pandemic subsides, the stars are aligned for the ideal time to purchase a new car.
OEM Incentives for New Cars
If you have been following the news from an automotive perspective, you will have seen the headlines of a 74.6% decline in sales in April (versus April 2019) followed by a 44% drop in sales in May (versus May 2019). The manufacturers encounter numbers like these and have a couple options: stop production or offer steep incentives to move existing inventory. The society-wide circumstances have lingered so long that indefinite production stoppages are unfeasible. Therefore, the shift towards focusing on moving existing inventory has gained prominence, with the method being to entice buyers with incentives to save big on 2020 vehicles.
Summer Buyer’s Market
And those best deals can be had now as experts believe the soft market that exists as we come out of the pandemic will harden come fall and later towards the end of the year. Right now there are incentives such as close to free financing and Honda has adopted 180 days with no payments (half a year!), so consumers have the peace of mind that their purchase will not be affected by the temporary circumstances of the first half of 2020.
The Used Car Buyer’s Market
One perhaps underreported aspect of the auto market during and after the pandemic is used cars. For a variety of factors, there is a large inventory of used cars, including leasebacks and demos. Furthermore, the implosion of the rental car market has initiated the return of many only slightly used vehicles from rental agencies. For customers slightly uncomfortable with the financial cost of a new vehicle, but still need a new-to-you car, traditional used, leasebacks, demos and rental returns will provide the consumer with terrific value. In fact, the Canadian Black Book projected on June 3, a “dramatically higher than expected used vehicle supply in the wholesale marketplace”, implying available deals for the savvy consumer.
Never Before Seen Circumstances
What this all adds up to is a singularity event for Calgary car buyers. With increased used supply and backlogged new inventory that needs to compete on price with the increased used supply (especially demos, leasebacks and rental returns), the consumer is in a unique position. Never before have the circumstances aligned to such a degree into such a buyer’s market. But those circumstances will not last forever, and as the market works itself out in the next few months and inventory returns to normal levels, price metrics will return to normal.
What that means is that the optimal time any consumer will perhaps ever see to buy a new, used or nearly-new vehicle is NOW.
Browse the inventory at Honda West to discover the deals and incentives we have available for the savvy Calgary car buyer!