Having in mind that the Covid pandemic of 2020 shaped the global economy in ways we could never imagine prior to it, the supply and customer demand had taken a completely new direction and every sphere of commerce was affected by it. Now, things started to look better in 2021, and some analytics predicted a better outcome for the next year, as restrictions were lifted and people were getting back to their usual lives.
The automotive industry, like every other, had its obstacles and challenges in the last two years, and therefore we will answer the question regarding what can we expect for 2022, and is it smart to buy a car this year with everything going around.
The price
If you keep in mind buying a car in 2022, you can expect higher prices. Generally, the bigger the demand, the lower the price, industries are trying to cut more profit at a lower price as the quantity is high, yet with the pandemic, this has completely changed. A shortage of car manufactured has been a natural response to the lower sales in the year of Covid, and manufacturers have found themselves startled by the ongoing situations.
Many industries have even stopped producing new items, and the automotive industry did not fall short of this model, as a lot of long announcement models and their releases have been postponed. Others made a compromise by keeping up the production in accordance with the demand, and therefore what we are left with are cars, new models, of course, a higher price with practically similar features to the predecessors, the only difference being- it just came out. Therefore, the price does not necessarily equal better, meaning better quality, more options, better innovation, etc.
So, yes, you should expect to pay a higher price because manufacturing has decreased since the entire 2020 debacle, and yes, it’s likely to continue that way for a while until things improve.
Pre-ordering
One interesting solution to save a lot of time and money is pre-ordering your vehicle, and you can still get the model you were looking for at an affordable price. The catch is, like with all the online shopping, the dealers are saving a lot of money if you simply order it and wait for about 2 months, they can cut their losses by saving on insurance and a lot of fees. Yes, you can choose the color and other features.
For example, we’ve spoken to several dealers for a piece of advice, and here are some of the impressions. Holman Infiniti is still keeping track of the customer demands and making it work despite the odds; this dealer recommends their new models which can come at a discount, getting the best deal for your money and you can still enjoy new models at an affordable price. The options of pre-ordering offer many possibilities and yes, there is one little downside and that is the lack of feeling the wheel, glazing with your hands over the dashboard, driving it instantly home once you stepped foot in it.
Those might be the only things missing and honestly, they should not be a factor influencing your decision. It has become pretty ordinary to choose, thus we expect you are not in such a rush and still have some means of transportation to get you going around.
Used ones are not cheaper options
Ironically, the high prices of new cars due to manufacturing shortages lead to a higher demand for used cars, and therefore their prices skyrocketed as the demand made them more valuable. Usually, buying a used car has always been the cheaper and safer option if you were not willing to raise any credit for a new one, yet nowadays you might not be getting what you paid for as the old cars have fewer features but an almost similar price. Imagine the tear, the hidden costs of repairing it, it might be a jackpot or it also can be your worst nightmare.
So, maybe think twice before going for this alternative as the math behind it is simple. You’ll either have to go for an older model to hit that price range and deal with all the underlying issues it brings along or you can go for a newer model hoping for a good deal, lower costs, warranty, and reasonable rates, the choice is yours.
What about leasing?
Well, leasing has been an option for a long time and is by far the best solution for those in doubt. Yet, with the ongoing market changes, chances are more and more dealerships will not offer leasing programs for their new vehicles. The main reason is depreciation, which in accounting is a method usually used to determine the overall cost of an asset over its expected and useful life span.
Meaning, with the cars right now in storage having more and more features, while the catalogs stay modest, chances are leasing might not be an option for the desired model you were looking after.
With all this to consider, the best piece of advice we can give you is to rethink your final decision. New cars have all the perks of being new, warranty, inventory, and a better guarantee at staying as they are.
The prices are higher than expected, leasing might not be an option (though not necessary – it is more of an assumption) and used cars are expected to have a higher price tag than ever before. Maybe buying a car right now, if it is not a necessity, can wait for another half a year. Buying a much older model comes with the risks that we previously mentioned, and is a rather wobbly business. We are not saying you should not buy it, rather be on the safe side and wait to see how things might develop over the course of time.
Of course, if you have already made up your mind on the issue, and are certain that the best option for you right now is the one you’ve so thoroughly thought through, we can only wish you the best of luck and a happy drive back home.
