Car buying in 2021 should be easier, but we may not return to normal right away. The coronavirus pandemic made it challenging to purchase safely and in the way we desire. Inventory of new cars was limited and many dealerships had to drastically alter the way they sold vehicles.
While purchasing a new vehicle may be necessary for some, waiting another year or two to purchase certainly has its benefits. This review discusses what you can expect from the car buying experience in 2021.
Before we talk car buying in 2021, a look back at the auto industry of 2020
No one could have predicted the pandemic. It had a profound impact on the car buying experience for the buyer and the dealer. In addition, many car manufacturers were forced to reduce or stop their production for a large portion of 2020. This led to fewer new models hitting the market.
Most manufacturers are now producing models again, but it may take some time to return to normal. What does not get discussed as much is the impact the pandemic has had on the innovation within the industry. The progress that was being made on models with additional features, better performance, etc. is certain to see a setback.
The coronavirus and its effect on car buying
Certain changes were made in the car industry due to COVID-19. Some changes may stay with us even after the vaccine is distributed on a large scale, whereas others, as we have discovered, are not an ideal long-term innovation with the car buying and selling process.
Digital sales increased significantly in 2020. In fact, many purchased a car without visiting the dealer. However, this is not a recommended strategy as you may purchase something that you do not love. While some aspects of the sales process may remain digital (i.e. paperwork), viewing the car(s) in person remains as important as ever before.
Production of new vehicles decreased in 2020. This means the supply is lower and may not be able to keep up with the demand in 2021. Certain innovative features may have been put on hold as well with the 2021 car models, which makes waiting another year to purchase worth considering.
The car industry should return to “normal” post-vaccine
The good news is we have a vaccination that is currently being distributed. This is a great sign for the car industry to resume normal operation. However, it takes time for the vaccination to be adequately distributed.
In the meantime, dealerships will remain cautious when interacting with prospective buyers and much will continue taking place online. In fact, the digital processes that have been implemented are likely to remain to a large degree even after a return to normalcy.
The pros and cons of car buying in 2021
New car sales in 2020 were down from previous years. We are likely to see a spike in car sales in 2021. The reasons you might consider purchasing in 2021 include:
- Certain dealers may offer increased incentives
- The ability to see new cars in person may increase
- Production has (and should continue to) increase
There are also reasons why it may not be best for you to purchase in 2021. The potential drawbacks to purchasing a car in 2021 include:
- The coronavirus pandemic is not yet behind us
- Newer models may not be as innovative
- The demand is likely to outweigh the supply
Most notably, the demand (the desire to purchase) is likely to outweigh the supply (the number of available new vehicles). This is because many put off purchasing in 2020 due to the pandemic, leading to a lot of people who are likely to buy at once this year. If the demand is greater than the supply, then it will likely lead to higher prices.
The pros and cons of upgrading your current vehicle
The alternative to purchasing a new vehicle in 2021 is, of course, to keep your current vehicle. Rather than spending money on a new vehicle, there are some notable advantages to giving your current vehicle a makeover, including:
- Save money by not purchasing a new vehicle
- Avoid the hassle and stress involved with buying
- Reduce the risk of contracting COVID-19
- Continue driving a car with sentimental value
If there is a high demand for new cars (which there is likely to be), we could see an increase in new car prices for 2021. In addition, the health concern is not yet behind us. You can also continue to enjoy driving the car that was there with you through the tough times of 2020, and the sentimental value is often enough to choose to upgrade your current vehicle rather than trading it in and purchasing a new one.
However, there are some potential drawbacks, including:
- The need to restore parts (i.e. headlights)
- The fear of breaking down while driving
- Missing the experience of buying a new car
Safety is of the utmost importance if you choose to keep your current vehicle. This means you should invest in any safety features of the car, such as the headlights (and other lights), tires and brakes. You should also order a tune-up to ensure your car is not at risk of breaking down.
Our recommendation: wait for your next new car purchase
As mentioned, the new cars on the market in 2021 are likely to lack the desirable innovation that we have seen from previous models. This is because the design and manufacturing process was greatly disrupted in 2020. Instead, you can likely purchase a far better new vehicle in 2022 or 2023 at a potentially more affordable price.
As we come out of the chaos that last year has delivered to all of us, it is also best to use the new year to save money by reducing spending on unnecessary costs. One way to reduce spending and save more money is by avoiding the new purchase and instead ensuring your current vehicle is in good driving condition.