Why the Best Time to Buy a New Car is RIGHT NOW

When it comes to big purchases, a new car is certainly right up there. But thanks to new tariffs imposed on Chinese imports, many auto analysts are warning that it’s going to become an even bigger purchase in the future.

Here’s a look at the details behind the tariffs and what it means for prospective new car buyers.

How Tariffs on Chinese Goods Impact Car Buying
Starting September 24, the U.S. government enacted a 10 percent tariff tax on thousands of Chinese imports. These include about 100 vehicle parts, and include everything from brake pads to materials to engines to batteries. An additional 10 percent tax is certainly nothing to scoff at, but for the most part, it’s a cost that can be absorbed by the suppliers and/or by the automakers in order to keep the industry fluid.

However, while the 10 percent tax went into effect recently, a much more significant tariff of 25 percent will be imposed starting in the New Year. This tax will be much more difficult to be absorbed by suppliers and automakers, so the additional cost is just likely to get passed down to the consumer in the end. You might be wondering why automakers and suppliers don’t just switch to domestic providers for said parts to keep costs manageable. It’s because the cost to purchase domestically would be about the same as importing from China.

The tariffs are all a part of the escalating trade war that is ramping up between China and the United States – and there are certainly a bevy of different perspectives on the issue. For starters, fair trade with China is something that President Donald Trump campaigned on, so he’s holding true to his word and hoping that the moves he’s making on Chinese imports lead to better future trade deals between the two economic powerhouse nations. Others don’t mind the tariffs in the sense that the supply chain will possibly become more domestic based. And then there’s the group of would-be car buyers that are going to have to ask themselves if it’s worth it to spend potentially several thousand dollars more on a new car, buy used or fix up their current vehicle.

New Cars Aren’t Cheap
The average new car price is more than $36,000 – a price point that’s certainly quite a bit more than just chump change. This average price point has increased over the years, and the auto industry is healthy once again after “rightsizing” during the economic recession from about a decade ago.

But in order to stay solvent and reach their profit margins, there’s no way they can’t pass on the higher part costs to their consumers. This could potentially increase new car prices by several thousand dollars, and while this may not seem like a lot of money to some consumers, to others it’s a sum that becomes hard to justify. This has automakers fearing that new car purchases will slump, which could lead to job loss and place a greater strain on the overall economy.

Obviously, the hope is that the shots fired by both China and the U.S. reach a point where the two sides come together at the negotiating table to create a new trade agreement. Until that happens, however, here’s a look at what consumers can do to keep the price of a new car manageable:

Buy before January 1, 2019: The 25 percent tax on Chinese imports goes into effect on New Year’s Day, so buying before then can help avoid this excess cost. Seeing that many car dealerships are running good year-end deals, December is never a bad time to buy new.

Buy used: The average used car costs under $16,000, and it’s a price point that’s unlikely to fluctuate with the new tariffs. Why? Because used cars have already been built. The tariffs don’t apply to parts that have been already supplied.

Refurbish: A higher new car price point could come down to a critical decision: Refurbish your existing car to make it like new or buy new? With a little bit of tender, love and care, it’s possible to have an old car looking like new at a reasonable price.

Regards,

Ethan Warrick
Editor
Wealth Authority


Most Popular

These content links are provided by Content.ad. Both Content.ad and the web site upon which the links are displayed may receive compensation when readers click on these links. Some of the content you are redirected to may be sponsored content. View our privacy policy here.

To learn how you can use Content.ad to drive visitors to your content or add this service to your site, please contact us at [email protected].

Family-Friendly Content

Website owners select the type of content that appears in our units. However, if you would like to ensure that Content.ad always displays family-friendly content on this device, regardless of what site you are on, check the option below. Learn More



Most Popular
Sponsored Content

These content links are provided by Content.ad. Both Content.ad and the web site upon which the links are displayed may receive compensation when readers click on these links. Some of the content you are redirected to may be sponsored content. View our privacy policy here.

To learn how you can use Content.ad to drive visitors to your content or add this service to your site, please contact us at [email protected].

Family-Friendly Content

Website owners select the type of content that appears in our units. However, if you would like to ensure that Content.ad always displays family-friendly content on this device, regardless of what site you are on, check the option below. Learn More