WANT TO BUY A VEHICLE? NOW MIGHT BE BEST TIME

It’s a soft market, but analysts expect it to end by fall, says Lorraine Sommerfeld.

When is the best time to pull the trigger on that car purchase you’ve been mulling?

Now.

Dennis Desrosiers of Desrosiers Automotive Consultants notes that in these unprecedented times, “a market decline of only 44 per cent can seem like a positive sign.”

“However, following the estimated 74.6 per cent decline in April … May’s year-over-year decline can evoke a touch of cautious optimism in a badly damaged marketplace,” he says.

In other words, as sales start to recover, it’s time to take advantage of all the goodies that manufacturers are throwing at you if you’re in the market for a new ride. However, by most estimates, the soft market will be firming up come fall.

Right now, you’ll be seeing incentives for free financing (or close) and months of payments extended. For motivated shoppers, those are great ways to save money or kick the cost down the road a little.

Automobile Protection Association (APA) president George Iny “expects that the lost production in 2020 will require automakers to trim their incentives or raise prices in the autumn.”

Another part of the equation to consider is used vehicles. According to a recent Desrosiers-ucda survey, the pandemic caused an oversupply of used vehicles and prices fell. More factors to consider are all the lease returns that were delayed but are now returning to stock, and the implosion of the rental market.

With Hertz (parent to Dollar and Thrifty) declaring bankruptcy, both sides of the border are looking at an influx of cars from huge fleets.

Used cars are at reduced prices because of supply, and new cars have a lot of incentives attached to compete with the used cars.

It’s a buyer’s market — but not forever.

Brian Murphy, vice-president of research and analytics at Canadian Black Book (CBB), cites another source of stock on the used car market.

“We also expect vehicle repossessions and sales at auction to spike, unfortunately as a result of the tough state of the economy,” he says.

How can you tell a good deal on a used car from a pig in a poke? Securing a Carfax report is a good first step.

“Smart consumers will always demand to see the vehicle history report. In Ontario (and some other Canadian jurisdictions) these reports are mandatory and must be supplied by the dealer upon request. The vehicle history report will indicate if the car was in fact a rental unit,” CBB’S Murphy says.

Buying a former rental car is not necessarily a bad thing, as long as you know what you’re getting. The problem Iny has is that rental cars don’t report collision damage to Carfax.

Shawn Vording, vice-president of automotive sales for Carfax, confirms this, but with a caveat: “Carfax Canada does not receive damage records directly from rental companies but does receive damage on rental cars through alternative sources such as police, subrogated insurance claims, estimates, and damage declarations from automotive auctions.”

The point everyone agrees on when it comes to buying used is the importance of an independent assessment of the vehicle. Without a complete collision history, it can be difficult for a body panel examination to reveal hidden disasters. The APA suggests “having the seller write what they told you about the vehicle into the sales agreement. For example: ‘All body panels except the bumpers, original condition.’ ”

Do your homework and due diligence, but now is a great time to take the plunge, especially if it was already in the cards.