Black Friday Car sales doomed…

Years past Black Friday car sales were notorious for super savings, extra rebates and low interest financing. Fast forward to 2021 pandemic malaise, supply chain bottle-necks and rising inflation.  Car Deals are Dark this Friday. Dealers will have sparse lots and over-MSRP pricing on the hottest new cars. Local Nevada dealerships are $1,500.00 over MSRP on Honda’s, Nissans and KIA’s.

Beware of  Car Dealer Market Adjustment stickers and Add ons.

“Market adjustment” is a fancy term for Supply vs. demand. Demand is out-pacing supply in everything, cars are no different. Starting with a global computer chip shortage multiplied by the pandemic shut-down and now parts stuck on shipping containers outside US ports. Dealers have enjoyed record profits on limited supplies by adding mark-up to their vehicles.  Add-on packages for Nitrogen-filled tires, window tint, door edge guards, sill appliques, paint sealants and fabric treatments range from $995.00 to $2995.00.  This effort isn’t new but it makes the Black Friday deal, no deal.

Trade-in values mask prices.

Dealers will offer higher trade-in values to mask the over-MSRP prices, but in the end you pay more. Tax is higher and banks may require higher down-payment to adjust the loan value. Nevada offers a trade-in sales tax credit which can level the tax repercussion of a higher priced purchase, but many states do not have tax credits on trades.

Rebates and Incentives on Black Friday car deals are few.

New car manufacturers are trying to stay relevant by offering 0% interest rates for approved buyers. However, loan qualifications have gotten harder in the wake of rising car repossessions. Rebates are limited to military, recent college graduate and some lease loyalists. Automakers know if there is no inventory, brand loyalty disappears in a hurry.

CAR LEASING OVER, for the minute.

Car lenders have turned to low interest rates rather than leasing to commit buyers to financing long term.

 

Read the fine print carefully on Black Friday lease deals. The payment and residual may not make sense when compared to a 60 or 72 month loan. STAY AWAY from 84 month loans- it’s a waste of money, IMHO.

As vehicles change and hybrid technology on the horizon, leasing residuals are subjective. Off-lease vehicles are bringing a premium in this market, however, learning of record resale profits have put a strangle-hold on where an off-lease vehicle can be purchased or resold.   The same lease companies are raising money factors and lowering residual values which costs consumers more in the monthly payment. The “cheaper to lease” mantra is gone. Car leasing banks are preparing for the whiplash which had started in 2018-2019 when changing technology reduced residual values faster than predicted.

If you have a question about your future car purchase, feel free to check-in with MyCarlady for updates and more news.