The COVID-19 pandemic has affected the way we work, live, and shop. Several automakers, including Ford and General Motors, have already rolled out long-term zero percent financing offers. Many automakers are offering payment deferral programs, so you won’t have to start paying for your car for several months. So, should you take advantage of the offers or reserve your emergency fund? Here, Market Watch reviews what you should consider before making a decision
Were you originally planning on buying a new car?
With the COVID-19 pandemic impacting the global economy, the first and foremost question one should ask oneself is “Do I need a new car?” While so many people feel the need to buy something as soon as it’s on sale, you should make sure it is financially feasible for your given situation. If the answer is yes and you were already in the market to buy a car, then this may be a good time given the extra incentives and lower interest rates.
Do you work in an industry that may have downstream impacts from the COVID-19 pandemic?
Do you work in an industry that is considered non-essential, or may see reduced hours or job cuts down the road as a result of the COVID-19 virus shutdown? If the answer is yes, you may want to hold off on your car purchase to avoid any potential issues down the road if suddenly you are unable to make your car payment. While your financial situation may be stable right now, there is no definitive answer on how long this shut down may continue or at what point it may put stress on other industries.
Will there be a shortage of cars available?
With auto manufacturing shut down in most of North America and even international plants, we don’t know yet what impact this may have on the supply chain of new cars. Most car manufacturers have announced closures at least through the end of April. While many dealers have a good stock of inventory on their lots currently, there is no production to replace those once they have been sold. Even if assembly resumes in the U.S. in May, there may be a downstream impact of receiving parts to make the cars from China and other partners overseas.
Will there be more deals to take advantage of?
Some suggest there will be more deals later this year. While many manufacturers like Ford, Chevy, Ram, and Hyundai have lowered their interest rates to 0% or are deferring initial payments for several months, more deals may come when manufacturing resumes. Dealers may release new incentives to help clear their inventory to help get factories back up and running. Other manufacturers like Ford are holding out to see if the government provides any stimulus to the industry similar to programs the Obama administration rolled out in 2009.
If dealerships are closed, how does the buying process work?
You will have to do most of your research online; sites like TrueCar will reflect a badge for dealerships that are offering remote services. A lot of manufacturers have shifted to home delivery of their cars. Chevrolet, Buick, GMC, and Cadillac offer their vehicles through their “Shop. Click. Drive.” program. Luxury makers like Audi are offering to drop off a car for a private test drive and will coordinate no-contact delivery of paperwork to your doorstep. Tesla is engaging its customers in “touchless delivery” through its mobile app. The entire process, from negotiating pricing to signing documents, can now be done online.
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