Why car prices are so high, tips to keep in mind when buying – WHIO TV 7 and WHIO Radio

DAYTON — If you were hoping to get a deal on a car this President’s Day weekend, you might want to keep dreaming according to AAA.

“Anyone looking for a car today, new or used, faces an unprecedented challenge,” Keith McIntyre, spokesman for the AAA Auto Buying Program, said in a statement.

There is currently not only a shortage of used cars, but also new cars, according to AAA.

A shortage of chips in January slowed auto manufacturing and in some cases halted production, the statement said.

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Car rental companies looking to buy more cars for their business as the pandemic winds down are having to turn to used cars, which is causing a shortage.

AAA Automotive said supply chain issues leading to skyrocketing costs are expected to continue through 2022.

According to AAA, at the beginning of last year, more than 90% of new cars were sold below the manufacturer’s suggested retail price.

Now the majority of new car sales are above MSRP.

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AAA has provided seven tips to keep in mind when buying a car:

  • If you can wait, wait. it is less expensive to maintain/repair the current vehicle you own than to negotiate the purchase of a new or used vehicle. AAA says basic vehicle maintenance might be the best investment you can make.
  • Negotiate if possible. There are, typically, three negotiations that occur when purchasing a vehicle – the cost of the car; the financing rate; and the trade-in value.
  • Understand your financing options. Buyers must obtain pre-approval from their financial institution before discussing financing rates with the car dealership.
  • Stick to your budget.
  • Save on insurance. Once you’ve narrowed down your vehicle choices to two or three, call your insurance agent and get a quote for each vehicle.
  • Do your homework. There are websites that can tell you the actual price you’ll pay for a new or used vehicle, help you save on your car loan, and provide you with an insurance quote so you can budget accordingly.
  • Redeem your lease. If your lease is due to expire within the next six months, chances are the residual value you will pay for the property will be significantly lower than the replacement value you will pay for the property will be significantly lower than the replacement value.

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