This article is reprinted by permission from NerdWallet. Imagine buying your first car during the worst car market in recent memory.
Inventory shortages and rising prices began with the pandemic-driven computer chip shortage in 2021. In May of this year, the supply of new vehicles available to buy was about 1.1 million — or about 1.7 million fewer than in 2020 — according to automotive marketplace and data company Cox Automotive. The average transaction price jumped to $47,148, up more than $5,000 from a year ago, as most buyers paid more than the sticker price. The average used car price remained near record levels at $28,312, with some models fetching higher prices than new. First-time car buyers have long been guided by internet lore and the experiences of their friends and relatives. What’s it like to shop when those rules no longer apply? For Kevin Nguyen, it meant buying his first car when traditional car-buying advice had gone out the window. Nguyen — whose data analyst job moved him from using public transportation in Toronto, Canada, to needing a car in Austin, Texas — said in an email, “Everything I knew about cars, especially the depreciating asset part, was no longer true today.” He added, “Cars were more expensive than their original purchase price, even if they were used with thousands of miles over several years.” Nguyen said this was a rather expensive option and that purchasing new wasn’t much better. “Dealers had no idea when they would get inventory. I got quoted late summer 2022 when I inquired in November 2021,” he said. But Nguyen did find the vehicle he needed, as did first-time car buyers Ben Johnson, of Evansville, Indiana, and Ellie Morris, of Nashville, Tennessee. All s …