With the Omicron variant, it looks like Covid is here to stay, but life, as they say, must go on. If you are thinking about buying a new car during the pandemic or need one ASAP, our tips are going to help you save money without having to make too many sacrifices in the process.
COVID-19 has made lenders extra-cautious, so your credit and financial information will need to be spot on when buying a car during the pandemic.
Very limited inventory of new and used cars to choose from
The pandemic has created substantial bottlenecks in the global supply chain. Carmakers are not able to get the microchips they need to build new cars.
While work is being done to address these shortages, it will take the better part of a year, if not longer, before production levels are at pre-pandemic levels.
Since there is a limited number of new cars in the market, buyers are purchasing used cars because they don’t want to wait for new cars to be delivered.
At first, this was no problem, but over time the total number of used cars available has plummeted, and with no new cars, the market is overheating.
Limited inventory is fuelling high prices
With a limited inventory of cars and demand at unprecedented highs, car prices have never been higher.
The reason we are bringing this up is due to the high prices you will need to dig deeper into your pocket or modify your expectations.
Car loans are harder to get
Since car prices are high, unless you have vast sums of cash sitting in your bank account, you will need financing.
Lenders are more cautious when underwriting loans because no one wants to have bad debts on their books with so much economic uncertainty.
To qualify for a prime interest rate car loan, you need a score in the 720 range to be safe. There are lenders that will approve loans, provided your score is over 600, but the interest rate coupled with the high prices may not make economic sense.
You should get into the habit of checking your credit report on a regular basis. Your score changes monthly, and it would be advantageous to always know what your credit score is before applying for any type of financial service.
Where to find a good deal when buying a new car during the pandemic
There are numerous websites that are offering car loans, the interest rates being quoted might seem like a good deal. While you could go with the websites offering car loans, your best option is securing a loan through a car dealership.
The dealership will be able to help you secure the best terms based on your financial situation, and if you have credit issues, the dealership is able to help get you approved when other lenders have said “no.”
Since the number of cars is limited, now would be a great time to move forward and start exploring your car buying options before the market gets even tighter.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!