Spring is usually a great time to buy a new car, and with today's high gas prices, many people are looking to trade in their vehicle for one that's more fuel-efficient.
But the market for new vehicles has been upended this spring because of disruptions caused by the March 11 earthquake in Japan. Parts shortages have forced many automakers to temporarily stop production, causing a ripple effect that means lower dealer inventories on many popular models and, in many cases, higher prices. The average price of a new car is up $350 since the earthquake, according to Edmunds.com.
What's a car buyer to do?
You could put off your purchase until later in the year, when production should be back to normal and car dealers are likely to have better deals. If your lease is set to expire this summer, ask whether you can extend it for a few months. Or maybe you can take over the last few payments on someone else's lease until car showrooms are better stocked.
LeaseTrader.com can match you up with someone looking for what it calls a "bridge-the-gap" lease, and you don't need a down payment. "Taking over an eight-month lease with low monthly payments would allow a person to delay their car shopping until the beginning of 2012, when inventories are expected back at normal levels," said Sergio Stiberman, the web site's founder and CEO.
A used car isn't really a good alternative right now, either — their prices are at near record highs.
The combination of higher demand for new cars and lower inventories means carmakers and dealers don't have to spend as heavily on discounts. Edmunds.com reported that the average "true cost of incentives" — a sales-weighted average of everything from cash rebates to subvented interest rates and lease programs — was $2,118 per vehicle in April, down $250 or 10.6 percent from March, and down $515, or 19.6 percent, from April of last year. It's the lowest incentive spending since October 2005.
"This is the clearest indication yet that automakers are gearing up for inventory shortages," said Jessica Caldwell, director of industry analysis for Edmunds.com. "Demand for new cars has been growing as the economic recovery has strengthened, but now the industry may experience a hiccup if consumers decide to wait for the next deal to come around, which may not be until the autumn."
If you need to buy a car right now, there are still some good deals out there, if you know where to look. Websites like Edmunds.com, Truecar.com and Kelley Blue Book typically have a "deals of the week" feature on their home page, but you can dig a little deeper into those sites and find out the discounts and incentives on virtually any car. Incentives usually last for a month or more, but it's always best to check to see whether published deals are good in your area.
A lot of carmakers offer cash rebates for military veterans, college students or recent graduates, and will give you an extra discount if you're trading in a car of the same brand. Great financing rates are also available if you get your loan through the carmaker's captive finance company.
Hobbies can also get you a good deal: Ford Motor, for instance, is offering a $500 discount on the Escape compact SUV if you're a member of the American Quarter Horse Association.