Even those who have never taken an economics course knows that any business is ultimately based off of the law of supply and demand. With the recent Japanese earthquake wreaking havoc on Japanese automakers and car parts manufacturers, it seems like the "supply" aspect of the equation could be in great jeopardy over the next few months – leading to a demand that could send prices soaring.
Nearly every dealer seems to use the phrase "now is a great time to buy." In fact, the slogan is so often repeated that it's essentially lost all meaning to most buyers. However, now really is a good time to buy for those seeking a vehicle, before the effects from the earthquake really start to take their toll. Most dealers have a supply of cars that will last them through April and May. But with production slowing down or ceasing completely at several major automakers, many analysts are predicting shortages over the summer. The situation is not restricted to Japanese vehicles either – many domestic models source their parts from Japan, so they're expecting slowdowns as well.
"If you need a vehicle, buy right now," Edmunds president Jeremy Anwyl told USA Today. "Look for the vehicles that are available and have incentives to get a good deal… If you can wait until fall, the pricing will be better."
So with prices likely to rise over the summer, it's a good time to buy a car, but it's also looking like it will be an excellent time to trade in a vehicle. Dealers are fully aware that they may be seeing reduced inventories over the next few months, so they'll be looking to secure cars that they can resell over that time period. That could potentially lead to a higher price for your trade-in.
Of course, the normal rules of trading in your car still apply. Be sure to utilize pricing guides like Kelley Blue Book to determine what your car is worth, and don't be afraid to negotiate. In addition, keep the discussion about the trade and your potential vehicle purchase completely separate. Many dealers will raise the price of the car that they're selling you while seemingly offering a great deal on your trade. Keep the two figures separate. In fact, Edmunds recommends not even revealing that you have a trade until after you've locked down a price for the car.
With some savvy shopping and a little elbow grease, you can get a great price on a new or used car as well as an excellent deal on your trade-in. When you're ready to buy, head down to New Jersey State Auto Auction for a great selection of vehicles and fair trade-in prices.