Buying a new car post-Covid: Supply chain issue is a real pain in the a**!
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| Car buying is tough these days… |
My wife and I had been driving our 2020 Chevy Equinox since December 2019. It was hard to fathom, but our 39 month lease on our car would already be up in several months (March 2023). Thanks to our busy travel schedule, we had been putting on the miles since our early retirement in August 2020.
During the first 9 months of our lease, we barely put miles on our car thanks to work remote culture. Like most people, I worked from home with no commute, which equals miles not driven. By August, full 9 months after we got our Chevy, we barely had 2500 miles on the car.
All that changed since August that year. We drove everywhere on the east coast of the United States. On August 24th, the day we kicked off our early retirement, we left for North Carolina from Pennsylvania. The same year, we would travel to New York City, then to Maryland, back to NYC, followed by North Carolina again. We really racked up the miles the following two years, driving to Pennsylvania, New York, Vermont, Maine, West Virginia, South Carolina, and to Canada.
By the time October 2022 rolled around, we found ourselves with a leased vehicle with an over the mileage limit. We had gotten the Chevy on a 39 month lease with 39000 miles, but we had already reached 38200 miles by late October.
Of course we knew we would be over the mileage limit few months prior to that. We knew we had to think about replacing our Chevy with something else, although this time, we would be financing the car, and not leasing it.
I had been diligently researching for a suitable replacement car for at least 6 months or so. We already had 3 Chevys the last 6 years, so we knew we wanted something different. We started narrowing down our choices from a pool of so many cars.
In the end, we knew we wanted something from a Japanese manufacturer, think Honda, Toyota, Subaru, or Mazda. We also wanted something in the $30,000 range or below, that was reliable for the long haul.
Looking at the automotive market since early this year, I realized the prices, thanks to lack of inventory, were very high. Dealerships were charging MSRP (manufacturer suggested retail price) or higher, in some cases. I also knew manufacturers like Subaru, had the worst supply chain issues even compared to other Japanese manufacturers.
In general, manufacturers were building specific models that were selling well, and they were not building their cheapest models in their lineup. I started to notice that popular models like Subaru Forester, Toyota RAV4, Honda CR-V, were all in very high demand, usually entailing a need to be put on a waiting list.
By September, I got an inkling of good news, as some manufacturers were reporting inventory on certain models. Domestic manufacturers, in particular, were starting to report availability of several models. In a word, the situation looked totally complex when we set out to find a car…
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| Our Mustang convertible rental, Las Vegas |
I personally love cars. I always loved driving just for the sake of driving. Taking a vacation always entailed renting a car to fully enjoy our vacation. A Ford Mustang convertible was my go-to vehicle of choice whenever the opportunity presented itself.
For any driving enthusiasts, any car that drives nicely is usually a must when researching cars. I’ve always been enamored with Hondas all my life. I loved how their vehicles seem to hug the road, and seem to handle well. One of the best cars we ever owned was a 2006 Honda Accord. It absolutely drove like a dream…
With those thoughts of Hondas in our minds, we decided we wanted another Honda, as our first choice, specifically a Honda HR-V. We also left our options open in case inventory was an issue. Going in, we knew we had a fight on our hands finding a car…
Late October, we were in North Carolina in search of a car. One day prior to us going car shopping, I had requested offers using Truecar, a car buying service website. I had gotten several replies, but unfortunately the prices were all too high. For example, a Mazda CX30 base model, retails for around $25000. None of the dealerships had a base model. Instead, they had higher trim models retailing near $30000.
Instead of going back and forth over text/email, we decided we should just show up at several dealerships to see what they actually had in stock. We heard from other recent buyers online and from our family that cars that are listed as in-stock, may not be when you show up at the dealership.
We feared a ‘bat & switch’ tactic which is something that is absolutely loathed by everyone, including myself who used to sell cars for a living. This turned out to be true unfortunately…
The first dealership we stopped by was a Honda dealership to look at a HR-V. I had researched the very same model via Honda’s website which showed at least two cars were in stock at that dealership. When we arrived, we were told the only cars in stock were two: a Honda Passport and a Honda Pilot.
The salesperson told us we can order a car, or buy something that was coming in within the next month. We needed a car asap, so we declined. I did give our salesperson my phone # in case something came available, then we headed to the second Honda dealership about 30 minutes away.
While waiting for a salesperson, we got to look at the Monroney sticker (the label that shows car info including price, equipment, mileage, safety score, etc.) on a Honda Civic that was on the showroom floor. We were aghast when we saw the dealership was marking up $5000 for frivolous stuff, like window tint, paint protection, fabric protection, LoJack, wheel lock, etc.
Honestly, I didn’t need any of those things! Those are things I would never buy. It’s worse when someone forces it down my throat. I had a bad vibe just from that, and it was a deal breaker.
Our salesperson was nice enough, but again he didn’t have any HR-Vs in stock, despite Honda website showing two cars in-stock. We politely refused a test drive, and walked out soon thereafter. We really didn’t want to pay extra for stuff we didn’t want, even if they had one in stock. Had we bought one from that dealership, our $25000 price on a base model HR-V, would have been $29000!
Walking out of that dealership, we got the sense that buying an import was really difficult these days. We continued to the next dealership, a Subaru dealership. We met a nice salesperson, but he too, didn’t have anything in stock we wanted. All he had was a Subaru Impreza sedan, which is a bit too small for us. We prefer a hatchback or a SUV, so we can carry our belongings during our many travels.
We walked out of that dealership, wondering where we should head to. I thought about visiting a Chevy dealership to see if they have anything that might work for us. While leaving the Subaru dealership, we instead made up our minds to visit a nearby Mazda dealership.
This turned out to be the best move of the day, as the dealership had, in stock, a Mazda CX-5! We test drove the car, then went inside the dealership to consummate the deal. We realized while talking to our salesperson that the dealership does charge a $900 fee for exterior/interior protection/vehicle theft plan on all their vehicles for sale.
We weren’t thrilled with it, but we also were realistic. We understood, by then, that all dealerships were adding on frivolous items to charge the customer for extra profit. We knew we couldn’t say no. We instead asked our salesperson (nicely), to see if his manager would approve a discount on the price of the car.
We, in fact, asked for several things at the dealership, and they helped us out:
- We asked for a discount, and we got a $500 discount.
- We asked if we can charge the entire down payment on our credit card. We got partial amount of $2500 agreed upon. It’s better than nothing.
- We asked about turning in or selling our car to them, and luckily, they agreed to buy out our leased car. This meant we didn’t have to make our remaining 4 payments or a disposition fee to turn in our leased car. This effectively saved us roughly $1800.
- Be realistic when shopping for a new car, especially if it’s an import
If you can wait, then it may be worthwhile to factory order a car to your specifications, or buy a car that is allocated to the dealership which is expected to arrive within a month or two.
- Be prepared to make an offer on an in-stock car; don’t hesitate
- Be realistic with discounts on a new vehicle
- If you have a leased vehicle due to return in several months, do some research
- Just because it’s difficult to buy a new car, doesn’t mean you should just cave in to the dealership
