Buying a Car During the Coronavirus Pandemic
Businesses of all kinds have had to reassess the way they do business during the coronavirus pandemic, whether it’s offering alternative ways to deliver goods and services or temporarily closing their doors. Car dealerships are no exception.
In this article we are going to cover some of the main topics for our new normal of car buying: how to know if this is a good time to purchase a car for you, navigating current car dealership incentives, and how to shop safely during social distancing.
Buying a car during a time of economic uncertainty may not be the best financial decision for everyone, but if you were already on the hunt for a vehicle prior to the stay-at-home orders or currently find yourself without reliable transportation, it’s important to find safe, secure ways to purchase a car that protect you and your wallet.
But first, we want to make sure your financial wellness is top priority. In order to make sure you’re in a good place, there are a few items to consider before car shopping:
-Employment situation: Are you currently employed and feel secure about your income?
-Preapproval: Being preapproved from your financial institution can give you confidence in how much car you can afford and what interest rate you qualify for.
Estimate your monthly payments with our How Much Car Can I Afford calculator.
-Budget: Is a car payment (and all the first-time expenses that come with it, like taxes) already allocated in your budget?
If it’s been a while since you’ve had an auto loan, read our How to Create Budget for a New Auto Loan.
-Make/model: Do you have an idea of the make/model car you’d like? With the current social distancing and precautions being taken at most dealerships, you may need to minimize test drives. It may be a good idea to do enough research on the vehicles you’re considering beforehand to really focus your decision.
Navigating Car Dealer Incentives: Financing and Other Offers
There are many dealerships offering deals during this time to draw more buyers to their lots. Some you may find have offers you can choose between, such as 0% financing or cash back.
Are these deals too good to be true? It depends on your financial situation. If you’re in a good place—financially speaking—this may be a great time to take advantage of these more aggressive sales you might normally see at the end of the year when dealers are trying to clear out their inventory.
It’s important to read the fine print on these offers, because there might be qualifications to receive 0% financing such as high credit score or a requirement to purchase a 2019 or newer vehicle which may be a higher price point than what you budgeted. Another consideration could be the length of the loan. For example, you may only be able to qualify for the cash back offer if your loan term is for 48 months.
Ultimately, car dealerships are willing to negotiate on their offers. If you have time to speak with your car sales representative to ask questions, and discuss their financing options, you’ll be able to secure the best option possible for your budget.
Preapproval Gives You Purchasing Power
If you don’t think you will qualify for the 0% financing and would rather take the cash back offer (if it’s offered as an incentive), you may be able to get the best rate through your financial institution.
You can always get preapproved and look at rates for your next auto loan with your credit union.
Social Distancing: How to Shop for a Car Online
If you feel it’s a good time to buy a car right now, there are a few benefits to doing it online. Here are some things you can do to buy a car and maintain social distancing.
*Editor’s note: The writer and credit union do not endorse or receive payment for any vendor or business listed.
1. Look at online inventory at your local car dealerships.
Most dealerships provide photos (and some videos) of the vehicles on their lots. This gives you a chance to compare multiple cars on the same dealer lot, or many local options at once.
2. Chat with the sales managers online.
If you have questions about availability of a vehicle or the current purchase process, you may be able to avoid sitting on hold. Check to see if the dealership has a chat feature on their website, or go to their social media pages to see if you can speak with a representative.
3. Ask if you can schedule a test drive.
Many people feel more comfortable taking a test drive of the car they’re interested in. In order to do that in a safe, secure way, you may be able to schedule a test drive. This will give the dealership a chance to sanitize the vehicle. Some dealers will even bring the car to you.
4. Ask if you can finalize the paperwork securely online and get the car delivered.
Some dealerships may ask you to come into the dealership to sign final paperwork or documentation, but you can always ask if they provide a way to do it electronically. They may even offer the option to deliver your vehicle.
5. Consider buying your car online completely.
Online vendors (like Carvana or Vroom), take out the car dealership process and allow you to purchase a car from start to finish on their website. The benefit? They’re set up for this social distancing process already and have a test drive warranty, which means you can return the car if you’re not satisfied (just make sure to read all the fine print). The potential downside? You can’t test drive the car before buying it and you won’t see it up close until you’ve signed the paperwork. We recommend doing the research to fully understand the process for returning a vehicle if you aren’t happy.
Remember: It’s All About Your Comfort Level
This is a unique time to be shopping for a car, and one of the most important things is to consider what makes you feel comfortable. Whether that means calling a few dealerships to ask what their sanitation process is or sticking to completely shopping online, it’s about feeling safe.
We’re here for you.
Together Credit Union is committed to making sure you feel confident when you’re shopping for a car. Visit our Auto Loan page to see the ways you can finance, shop, and protect your vehicle purchase.
