Car shoppers might find that bargains are scarce this year. But better prices on trade-ins could help ease the pain.
Last year's pandemic-induced production delays, combined with a continued shortage of computer chips and other automotive components, have tightened the supply of new models — especially popular sport utility vehicles and pickup trucks.
The inventory of new vehicles at dealerships in March was down more than a third from a year earlier, according to an estimate from the automotive website Edmunds.
That means it could be challenging to find a new ride with the colors and features you want at a price you can afford. "It's harder to get exactly what you want," said Ivan Drury, senior manager of insights at Edmunds. "Don't expect heavy discounts."
Consumers have started buying cars again, as pent-up demand from the pandemic and the receipt of stimulus checks send shoppers to dealer lots. Car sales in the first three months of the year were "extremely strong," according to the National Automobile Dealers Association, an organization representing franchised dealers.
"Sales demand has been far stronger than anyone expected," said Michelle Krebs, senior director of automotive relations at Cox Automotive.
She attributed the high demand to well-heeled consumers who continued working during the shutdowns in 2020 but didn't take vacations or dine out and now have cash to spend on high-end vehicles. Plus, she noted, "people are taking more road trips, so they are investing in vehicles to do so."
Whether the demand continues as the economy gains steam remains to be seen, said Keith Barry, who writes about cars for Consumer Reports. Competing pressures are at play. Some people will probably return to commuting to work as offices reopen and may prefer to drive instead of taking public transportation, raising demand for cars. But others may continue working at home, which would tend to reduce the need for cars.
