Why the Worst Time to Buy a Car Might Not Be Optional For Everyone

The automotive market is in chaos. Microchip shortages have strangled production, and the ripple effects are reshaping how people shop for vehicles. “In my 28 years in the business, I’ve never seen anything like this,” says Oren Weintraub, president of Authority Auto, a car-buying concierge service in Los Angeles. The shortage has created a perfect storm: pent-up demand, skyrocketing used car prices, and dealers with barely stocked lots.

Here’s what’s happening on the ground. Used vehicle values are approximately 25% higher than they were a year ago, according to the Manheim Used Vehicle Value Index. The Federal Reserve predicts six to nine months before chip production ramps up and inventory returns to normal. But for many people, waiting isn’t an option—a lease is ending, a car needs replacing, or a new model is calling. If you’re forced into the market now, here’s how to navigate it.

The New-Car Hunt: Expect Sticker Prices

Forget about the discount. Dealers aren’t budging on pricing when inventory is this thin. Ron Montoya, senior consumer advice editor for Edmunds.com, advises: “Recalibrate your expectations.” Shop around anyway—one dealer might charge full sticker while another sells at invoice (sometimes a $1,000+ difference).

Instead, hunt for savings dealers can’t control: factory rebates, low-interest financing, loyalty programs, or family plans. Since inventory moves fast, ask salespeople about inbound vehicles and get any deal in writing with the VIN before the car even arrives. Be prepared to compromise on specifics—that metallic red with leather interior might not be available, but another color could be on its way.

Watch out for dealer add-ons too. Paint protection, wheel locks, and antitheft packages get tacked onto an addendum sticker. Confirm what’s included in your quoted price upfront.

Leasing Options: Three Paths Forward

Option One: Extend the lease. If your contract is ending soon, manufacturers typically allow lease extensions at the same monthly payment for several months. This keeps you driving without entering the overheated market. Catch: you might lose bumper-to-bumper warranty coverage and face expensive registration fees.

Option Two: Buy out your lease. If you know and like your car, the buyout price might actually be cheaper than a comparable used vehicle on a dealer lot right now. The downside is arranging financing and handling paperwork.

Option Three: Trade it in. You’ll get top dollar in this hot market—but you’ll also pay more for the replacement. As one industry expert put it, “It will be a push.”

The Equity Play: Turning a Lease Into Profit

This is where things get interesting. Lessees can sell their leased vehicles and pocket any equity above the residual value. Weintraub recently secured $17,000 for a client’s returned Chevrolet Tahoe because its actual value far exceeded what the lender predicted. Some vehicles have appreciated 25% or more.

Dealers and online retailers will buy out your lease directly, simplifying the process. But manufacturers are tightening restrictions on third-party transactions. You can still buy your car and resell it independently, though you’ll handle financing and sales tax yourself—cutting into profits. Consider alternatives like picking up someone else’s lease ending on Swapalease or LeaseTrader if you need wheels while waiting for the market to cool.

When Your Car Is Totaled

Your collision insurance owes you the fair market value immediately before the damage. That number is negotiable. Get offers from online car retailers or used-car buyers at local dealerships to prove your car’s current worth. A settlement that accounts for today’s inflated market means you start your next purchase with a larger down payment to work with.

The Bottom Line

The worst time to buy a car doesn’t make the decision optional for everyone. But whether you’re replacing a totaled vehicle, ending a lease, or desperate for new wheels, informed choices beat panic buying. Know the market, stay flexible, and remember: this bubble will eventually deflate.