Consumer Group Offers Tips on Car Buying in Shortage Market

Andy Spears
3 min readMay 19, 2021

The Consumer Federation of America (CFA)has outlined some tips for car buyers as consumers face an increasingly tight purchasing market.

“The problem,” says Jack Gillis, CFA’s Executive Director and author of The Car Book, “is that vehicle inventories are way down which means it’s a sellers’ market. Limited supply is a price-conscious car buyer’s biggest enemy.”

Vehicle inventory is down by about 30 percent which means car dealers have little incentive to negotiate. “The rule of thumb that nobody pays ‘sticker price’ for a new car has fallen by the wayside as dealers stick to the manufacturers suggest retail price (MSRP) on the vehicle label,” said Gillis. In fact, for some particularly popular vehicles in short supply, dealers are charging prices above sticker price.

Here are ten tips for car buyers from CFA:

1. Shop carefully. You can find some deals and incentives, especially on the less popular vehicles. Everybody is looking for SUVs, but if a sedan meets your needs, you can find some good prices.

2. Shop around online. As car buyers become more comfortable with online vehicle purchases, more and more dealers are offering internet specials. Shop carefully and read the fine print, but these offers can be good negotiating tools when you’re in the showroom.

3. Widen your search process. If buying from a dealer 70–100 miles away will save you money, consider it. You can still take your car to your local dealer for service and warranty work.

4. Avoid the upgrades. Unfortunately, most manufacturers don’t let you pick and choose your options, you must buy them in packages. Skipping the fancy packages on a particular model can save you 10–20 percent.

5. Skip the extras. Dealer add-ons are budget busters. Floor mats, cargo containers, luggage racks and fabric treatments, if needed, can always be purchased later and at far less cost.

6. Decline the extended warranty. Today’s new car warranties are very good and extended service contracts (they’re not really warranties) are not only expensive, but if they actually paid off for most people, they wouldn’t be such big profit centers. Instead, plunk those service contract dollars in a special savings account to draw on if you need post-warranty repairs. Most likely, you can use this account to build up your down payment for your next vehicle.

Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .