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How to find a deal in a tough car shopping market

Rising prices and a looming vehicle shortage make this summer one of the worst times in years to go car shopping. But if your vehicle is on its last leg or your lease is about to end, here are some tips on how to navigate through a difficult market. Los Angeles Times

Consider cars with incentives: Manufacturers still offer some incentives, especially for cars that are near the end of their model cycle or are slow sellers. Most of the big auto information companies, including Edmunds.com, TrueCar.Com and kbb.com (Kelley Blue Book), offer incentive data on their websites.

Check supply: While inventories are tightening across the board, some manufacturers will have ample inventory for some vehicles, and these will have the better deals. TrueCar's TrueTrends report offers a monthly listing of new vehicles with the shortest and longest days' inventory.

Be a contrarian: For now, that means bigger. Consider buying something that drinks a bit more gas. Yes, it will cost you more each time you go to the pump, but with small-car prices going up rapidly you might find that the price gap between a compact vehicle and a larger car has narrowed considerably.

Don't be wedded to a brand: The domestic makes, as well as Hyundai and Kia and the German manufacturers, have not suffered the supply disruptions incurred by the Japanese brands. Ford, GM and the South Korean makers all have models that drive well and are as fuel-efficient as the popular Japanese nameplates.

Consider leasing: When interest rates are low and projected resale values are high, as we are seeing in the current market, manufacturers can offer attractive lease deals. Many people don't like leases because they amount to long-term rentals and you don't have a car to drive at the end of the contract. But with the market so confused, it might make sense to lease a car and figure you can purchase a vehicle 36 months from now, when things will be more settled.

Get an extension: If your lease is running out, ask for a six-month extension. Some of the Japanese automakers are beginning to offer extensions just to keep you out of the market until they have a better supply. They want to keep you from defecting to a rival automaker.

Don't assume used cars are a better deal: The market is seeing prices jump for used cars. There's a shortage dating back to industry events of two and three years ago. Dealers are bidding up the price of used cars as they try to build their inventories to have vehicles to sell as the supply of new cars shrinks. This could turn into a bubble. It's possible that later this summer dealers will find they have bought too many used cars and have to lower prices. But for now it's tough.

Shop for cars owned by seniors: Check around the neighborhood for a used car that an elderly driver might be selling. These cars can be older but are often good deals and can last you for several years until you want to dip back into the new-car market.

Hold on to what you are driving: People usually can drive their cars for many more miles than they expect. There might be some extra expenses, but those often amount to just a month or two of new-car payments and would be worth it if that keeps you out of the new-car market until next year.

How to find a deal in a tough car shopping market 06/14/11 [Last modified: Tuesday, June 14, 2011 4:30am]
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