These days sticker shock may be associated with car shopping.

Due to strong demand, prices for new and used cars continue rising. A slight improvement in manufacturing has been noted, but there will not be an immediate return to normal for car buyers.

“The typical dealership experience that consumers are familiar with — walking dealer lots with rows and rows of cars, negotiating over price and getting many incentives — is not likely to return this year because there are 4.5 [million]”To 5,000,000 consumers waiting on the sidelines, cars are not available,” Tyson Jominy (head of data analytics at J.D. Power.

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Jominy explained that this pent up demand would keep inventories down and price rises high through most of 2022.

An ongoing global shortage of microchips — key components needed for today’s autos to operate — that began in 2020 continues to slow down manufacturers’ production of new vehicles, which has translated into demand outpacing supply.

“It’s slightly better in the sense that there is no more drop-off of inventory — it’s not getting any worse,” said Ivan Drury, senior manager of insights for Edmunds.com. But it’s still many months away before things start to look more normal.

According to Edmunds, the average new vehicle transaction price is $45,872 higher than its manufacturer’s suggested retail prices (MSRP): $45,209 versus $45,209.

Jominy stated that 89% of consumers pay more than the sticker price, or less than 5%.

Record transaction prices can be attributed to the fact that automakers are reducing their discounts, as they do not need to give big incentives right now to get cars sold. 

These new cars don’t stay on the lot for long after arriving at a dealer lot. J.D. estimates that 57% sold their cars within 10 days. Power. Overall, the average time it takes for a car to be sold from the lot is 17 Days, which is a record and down from 49 Days a year earlier.

Edmunds data indicates that demand has increased in the used car market. Buyers are now paying on average $29,011, an increase of 27.9% over a year. This ranges between an average of $14,124 for 9 year-old vehicles to $30,334 in a 3 year-old vehicle.

Drury stated that one bright spot is the fact that trade-in prices for used cars have risen to a level far beyond normal.

He said, “Shop for that trade-in.” Don’t make assumptions about depreciation or mileage. All that junk is gone.

While you need to be aware that the vehicle’s price will be fixed, it is possible to negotiate the trade-in value.

Aside from that, the interest rates currently are very low.

Drury added, “You can still obtain money cheap,” adding that depending on your make and model, there may still be 0% or 0.9% financing offers. Aside from that, the average interest rates are for a new-car loan is under 4%According to Bankrate, it is a staggering. 

Ordering your car may make sense if your schedule is flexible and you don’t see what you want at the dealer lot.

Jominy stated that while it might take up to eight weeks to receive the vehicle, it will be made to your specifications such as trims and colors. Some automakers now offer pre-order incentives that consumers who buy stock vehicles won’t be able to get.