Your Complete Guide to Buying a Car (and Saving Money) in 2022
If you’re looking to buy a car in 2022, don’t expect the lessons from years past to apply. 2021 was a year like no other for the auto industry — and not in a good way. Dealers have reported that customers driving past thought they had gone out of business because their inventory was so low. In some cases, gently used cars cost as much or more than brand new versions of the same models. For buyers, 2021 was defined by high prices and limited availability. Will 2022 be the same? Yes and no. Here’s what you need to know.
Be Ready To Make Your Move
A global semiconductor shortage is responsible for most of the slowed production and sparse inventory that made it nearly impossible for automakers to satisfy buyer demand all year long. But a lack of chips isn’t the only roadblock standing between you and a great deal on a new car in 2022. Inventory is at record lows industry-wide, incentives are weaker and rarer than normal, and dealers are charging above MSRP.
It’s tough out there, but carmakers still want to sell cars — the best thing you can do is be ready when a good opportunity presents itself.
That means doing your homework and knowing exactly which makes and models you want, and exactly which ones you’ll accept if the deal is sweet enough — if you dawdle, there are buyers lined up and ready to eat your lunch. That also means getting preapproved for a loan — keep in mind that interest rates are expected to rise through 2022, which you’ll have to factor into your budget. If you plan to trade in an existing car, get it cleaned up and inspected so you can ask for top dollar.
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Wait as Long as You Can and Don’t Expect Early Year Deals
There’s no reason to believe that the current situation will change in time for the sales that traditionally pop up at the start of normal years — but things might loosen up in the months that follow. A local ABC affiliate in Johnson City, Tennessee, reports that area dealers are hearing that manufacturers will step up production in the fourth quarter as critical semiconductors become more readily available.
Some big automakers will boost production by 100,000 cars compared to the third quarter. If that’s true, the timetable jives with what Cars.com predicted back in June — that it appeared new car inventory would rebound to healthy levels by the second or third quarter of 2022.
That means that if you can hold off until spring or preferably summer, you’ll probably do much better than you will early in the year. Give your car plenty of TLC to help it hold out until then.
Buying New? Go With the 2022 Model
Winter has always been car-buying season because dealers make room for next year’s inventory by slashing prices on current-year models.
Not this year.
Although now through early 2022 should be just the right time to cash in on deep discounts on the remaining 2021 models, the deals just aren’t there. In most cases, you’ll do as well or close to it by going with the 2022 model instead. Consumer Reports recently profiled 10 2021 models that are currently selling below their sticker prices, but virtually all of them are expensive luxury vehicles.
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In many cases, next year’s model is simply the better deal.
For example, CarsDirect reported that Kia is selling many of its most popular 2021 models for just $10 less than the incoming 2022 version of the same vehicle. Hyundai canceled all lease and APR deals on its hugely popular 2021 Palisade, and both the lease incentives and APR deals are as good or better on the 2022 Nissan Pathfinder and Honda Civic than on the 2021 versions of the same.
The Used Market Is a Mess and It’s Going To Stay That Way — Be Flexible or Be Disappointed
As bad as things are in the new car market, used cars are in even higher demand and shorter supply — and it’s been that way for months. According to Forbes, there are two main culprits. First, new car buyers are not trading in what they have to the used market because they can’t find the new replacement vehicles they want at the right price. The other problem is that shortages forced many buyers who wanted new cars to buy used placeholder vehicles instead, creating even more demand.
Forbes reported that experts who think things will get better in 2022 are as hard to find as good deals on used cars. In fact, many credible experts are on record as saying that things probably won’t return to normal for years — maybe 2025. Fortune cited a similar expert consensus and reported that used car prices soared by nearly 40% between March 2020 and November 2021, and that prices are currently rising at an estimated rate of $100 to $200 per week.
If you’re planning to buy used in 2022, temper your expectations and stay flexible on the make, model, trim, features and color that you want. According to Fortune, many buyers have been forced to settle for their second choice, third choice or beyond. Then — and only then — are they finding good used cars at a fair price.
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