How to Purchase a Car During the Pandemic
Updated: Mar 30, 2021
The coronavirus pandemic has changed the way that many businesses typically operate. Car dealerships are an excellent example of this. They are businesses that usually sell to people who visit their dealerships in-person.
Unfortunately, many states do not allow car dealerships to open their showrooms to customers during the pandemic. This rule has forced many car dealerships to change the way they sell their cars.
Dealerships no longer require people to come down to their car lots and test drive their vehicles in-person. Instead, the dealership is delivering its vehicles to the homes of potential buyers. That way, it allows people to test drive the cars within their neighborhoods and without breaking any social distancing rules. On top of that, the dealerships are offering special deals on their cars as well.
However, it is not a good idea to purchase a new car just because of the low-interest rates on car loans and the convenience of test-driving vehicles in your neighborhood. Make sure you always read the fine print of any deal before committing to it.
Most importantly, you must consider your financial situation. Since the economy is so volatile right now, you never know whether you’ll end up unemployed a week, month, or year from now.
Special Deals on Cars
Many states have allowed car dealerships to continue running their businesses during the pandemic crisis. Some states still allow customers to visit showrooms too. For states that do not allow showrooms to be open, dealerships have no choice but to conduct remote communication and online sales with potential customers.
Car dealerships are trying to attract customers with their low-interest financing offers. For instance, you might see a car loan deal that includes 0% APR for 84 months. The only stipulation is that you must be a qualified buyer with a good credit score. You might even see offers that allow buyers to defer payments for a certain number of months.
If you’re really lucky, you’ll find dealerships that provide payment protections to any buyer that loses their job due to the coronavirus. The point is that car dealerships want to overcome the physical restrictions that have made car buying so difficult for people.
That is why dealers are going out of their way to deliver vehicles to people’s homes so they can test them out. It is also why car financing applications can be filled out online. In fact, some dealers even let you conduct a trade-in assessment of your existing car online as well.
Considerations to Make First
Some of the car deals on the market appear to be extremely generous. Just the convenience of having a new car delivered to your home for a test drive is something unheard of before. However, don’t let this convenience cause you to purchase a car without considering the financial consequences first. Make sure you do all your homework so that you know what your financial responsibilities would be if you purchased the car.
Here are some essential questions to answer before purchasing a car during the pandemic.
Do I need a new car?
If you already have a functional vehicle to drive, then there may be no point in purchasing a replacement vehicle. You may not even need a vehicle to drive if your job requires you to work from home because of the social distancing restrictions at your workplace. And if you’re unemployed because of the pandemic, then you definitely don’t need to drive as much. The only reason you should purchase a car is if you need to drive a lot for your job, such as delivery driving jobs.
Were you going to purchase a car before the pandemic?
You may have already had plans to purchase a car before the pandemic struck. Now you can see car dealers putting discounts on their vehicles, so it creates the perfect incentive for you to follow through on your original plans. If you had plans to purchase a car before, then go ahead and purchase now before the deals go away. But don’t buy it if you didn’t have prior plans or have no need for a new car.
Can you afford monthly car payments in your current financial situation?
Your current car might already be paid off. If you purchase a new car by taking out an auto loan, then you’ll have to make monthly payments. Can you really afford to make those payments? You need to look at your job situation and make sure your finances are likely going to be okay. Don’t let a 0% APR auto loan be the deciding factor of whether you purchase a new car or not.
There were already a lot of auto loan defaults before the pandemic struck. Now with the unemployment rate being so high, you need to be very careful that your job is not in jeopardy. If you take out an 84-month loan, do you feel financially secure enough to afford it?
Do you understand what is written in the fine print?
Don’t accept a car offer until you’ve read all the terms and conditions outlined in the fine print. That is where the real terms are specified. Don’t just take the advertised offer at face value. There is usually a small asterisk next to the offer, which means the actual terms are buried in the small fine print on the bottom. Please read it all carefully before making a decision.
There are car dealerships that have generous financing deals and discounted sales prices on their vehicles because they’re desperate for business. If you’ve wanted to purchase a new car for a long time, then you won’t find a better opportunity than right now.
Just make sure your current financial situation is stable enough to afford the monthly car payments on your next car loan. Read all the fine print of the offer and weigh the pros and cons of accepting the deal. Since you can test drive a vehicle after it’s been delivered to your house, you don’t have to commit to anything over the phone. Only commit when you’re confident it is a good deal for you.