Memorial Day car sales: what to know in 2022

If you’ve been browsing the channels lately, you’ve probably come across ads for Memorial Day sales at car dealerships. And while Memorial Day weekend is known for its steep vehicle discounts, this year’s sale will take extra consideration.

The average used vehicle is around $28,000, and the average new car is even higher at nearly $47,000. according to Kelley Blue Book. But this high cost of the vehicle, due in part to persistent supply chain issuesdoesn’t mean a deal is out of reach – just be prepared to make some preparations in advance.

This year’s Memorial Day sales will be limited

Historically, Memorial Day has been one of the best times to find a good car deal. But this year will likely leave drivers with less luck when it comes to making a purchase.

Limited vehicle stock

The industry is still unable to meet consumer demand. Dealerships are selling vehicles at lightning speed due to the small number of vehicles available. Cox Automotive Reports a 1.5 million drop in vehicle supply for March compared to 2021.

As factories halted production, the shortage of semiconductor chips directly led to fewer vehicles at the dealership. This shortage has created a period of increased need and low supply. And when shopping this Memorial Day weekend, you’ll likely encounter even less vehicle availability.

Fewer incentives

With fewer vehicles available, dealers probably don’t feel as much pressure to sell vehicles as they would have in the past. With so many drivers desperate for cars, they aren’t as motivated to offer incentives like cash back or rewards.

In previous years, this holiday weekend was full of different incentive options, but dealers won’t really need them to sell vehicles in 2022. JD Power notes in its 2022 forecasts that per-unit incentive spend is expected to reach $1,044, up from $3,334 just a year ago.

More competition

Less vehicle supply also means more drivers vying for the same vehicle. This increased competition will likely make it harder to get your dream vehicle. Many buyers are willing to spend more than the asking price to get the vehicle they want before another driver does.

This significantly changes the rules of the game and gives dealers the price advantage. The average price of a used vehicle is selling for about 28% more than the same time last year. And with a Cox Automotive Survey 2021 seeing that 42% of buyers are willing to pay more than MSRP, it’s almost guaranteed you’ll face some good competition.

How to Get the Best Deal Despite Limitations

If you’re ready to go with a new set of wheels after the upcoming Memorial Day weekend, there are a few tips you can follow to get the best deal, even with fewer vehicles available in the lot.

Road test before the weekend

One way to save time and ensure you get in and out of the dealership before the competition is to do a test drive beforehand. That way, you can walk in ready to buy rather than feeling pressured to sign a deal on a car you’re not completely sold on. To arrange a test drive, search for cars online, then contact your dealership to arrange an appointment in advance.

Buy outside your postal code

Although the pandemic has caused vehicle supply problems, it has also accelerated change to online purchase. Take advantage of this new opportunity to see if there are vehicles available outside your region.

Buying a car online is a similar process to buying in person and you could save some extra money along the way. And with some areas offering better prices, it might be worth heading to a city ​​with more affordable prices to find your next vehicle.

Be flexible in choosing your vehicle

With fewer vehicles lining up on dealer lots, now might be the time to broaden your horizons when it comes to vehicle model, size, and style. Most drivers tend to narrowly focus on a particular make or model, so flexibility may mean getting a vehicle when others don’t. Remember to check Bankrate 2022 winners for the most reliable vehicles when shopping.

Next steps

Buying a vehicle is an important financial decision. After looking at the changes to this year’s holiday weekend, decide if it’s really worth it. If you’re not actually saving money by shopping this Memorial Day weekend and can afford to wait, it may be best to be patient. Consider staying away from the holiday shopping spree and instead wait until more vehicles become available. You may encounter shorter lines, more options, and potentially better prices.