How Will The Coronavirus Impact Car Prices?

Illustration for article titled How Will The Coronavirus Impact Car Prices?
Photo: David Zalubowski (AP)

As Jalopnik’s resident car buying expert and professional car shopper, I get emails. Lots of emails. I’ve decided to pick a few questions and try to help out. This week we are discussing the impact of the Coronavirus on car prices, getting loan approval with bad credit, and is it worth buying an extended warranty on a well cared for Audi

First up, how is COVID-19 affecting car sales?

Do you think the overall financial slowdown caused by the COVID-19 virus will lead to better deals on new and/or used cars soon?

The Mrs. and I would like to replace my 2003 Honda Accord with something reliable that can haul our two dogs and camping gear on road trips. Since we live near Portland, OR a 2018-’20 Subaru Outback seems like an obvious choice with plenty of stock available. However, I’m in no hurry as my old Honda is still trouble-free and we weren’t planning to drive East until June or July. I see Subaru recently extended 0.9% financing through the end of March, but do you think that fear and market conditions will continue to escalate to the point dealers will be more eager to make a deal if I wait another month or two? Are there any indicators I can track at my local dealerships that would show me if they might be getting desperate?


By all current indicators, the COVID-19 situation is not currently having a dramatic impact on car sales in the U.S. However, in China, where COVID-19 is hitting the hardest, the slow down in the auto market is very real.

Even without the virus, most analysts are predicting that 2020 will not be as strong as previous years and the overall situation may result in better deals. What you want to keep in mind is that for certain cars, especially ones that are relatively popular like Subarus, there is a floor at which you aren’t going to get it any cheaper regardless of when you buy it.

For example, I just helped a client with a new Ascent and the discount was somewhere in the ballpark of $6,500 off the MSRP. That is an incredibly aggressive offer and waiting a few months is not likely to get that much lower. There are only so many discounts dealers can put on the hood until the math no longer makes sense.

My suggestion is that if you are in the market now shop your deals, if not wait it out until you are ready. As for your question on tracking deals, I don’t see an easy or reliable way to do that. You can look at advertised prices, but they don’t tell the whole story.


Next, is a dealer more likely to approve me for a loan on a new car versus a used one?

Why would a dealership be more willing to get you into a brand new vehicle versus an older cheaper vehicle, outside of pure profit at the end of the deal, on the basis of your credit being so bad?


There are a lot of factors that determine whether or not you are approved for a loan. First, I want to clarify that it’s not the “dealer’s decision” regarding your approval or denial. There are a lot of reasons to be mad at dealers, but if you get denied a loan approval, that’s not the fault of the salesperson.

If your credit is not great, sometimes a lender may be more likely to approve you on a new car because something brand new with a warranty is less risky from the bank’s perspective. However, the approval (or not) really comes down to your credit score, the loan amount and your income. If you are shopping for a $15,000 used car, a lender isn’t more likely to approve you for a $20,000 new car. The bank’s primary concern is how much you are borrowing versus how much you are making and if you are more likely to keep up with the payments on something cheaper over a more expensive car.


As always, it’s imperative that you shop around on your own for loans before you go to the dealership. This is especially true for folks that don’t have great credit.

Is it worth buying an extended warranty on a German car that is well-cared for?

I just purchased my manual, 2017 Audi A4 at the end of the lease, there are 25k miles on the car. I have been leasing for over a decade and have, fortunately, never had to deal with any mechanical problems in any car I’ve ever had. The list of things I don’t know is long:

Should I go to the dealership and buy a warranty? Can I call Audi and avoid the dealership altogether?

Are those 3rd party warranties my dad saw on TV a rip off? They have to be trash if “the ghostbuster” is hawking them, right?

Do I even need to worry about a warranty? It’s still pretty new, has low miles and I didn’t beat on it.

Should I just go lease something new so I can stop thinking about this?

Are Audi’s as expensive to fix as every boomer has told me they are?

Am I overthinking this because I’m freaking out about committing to owning a car for the first time in years?


I’m going to answer these questions out of order. If you like what you have, keep it. No need to get another car because you are scared of the warranty running out. Generally, warranties that are advertised on TV are probably not the ones you want to buy.

If you did want an extended warranty you would likely need to do so through a dealer but it always pays to shop around. A4s are generally reliable and, while they aren’t a Toyota Camry, a well cared for car shouldn’t break your bank.


My suggestion would be to set aside that money you would have spent on the warranty int a “ rainy day” or “fix the car” fund. Unlike a warranty, that savings doesn’t expire.

Got a car buying conundrum that you need some assistance with? Email me at!

Tom is a contributing writer for Jalopnik and runs He saves people money and takes the hassle out of buying or leasing a car. (

Share This Story

Get our `newsletter`


I though as Jalopnik readers we were forbidden from buying new cars?