Should I Hold Off On Buying A Car Because A Recession May Be Coming?

Illustration for article titled Should I Hold Off On Buying A Car Because A Recession May Be Coming?
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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 car purchases based on global economic factors, why new some cars have massive discounts, and can junkyard cars be diamonds in the rough?

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First should people pause on buying cars until the economy settles?

The news of the rapid spread of the Coronavirus has stoked the fears of another global economic recession. I am ready to purchase a new vehicle. However, I am hesitating because of this news. Should I postpone my plans to finance and purchase a new car until the outbreak is under control or just simply pull the trigger and hope the economy doesn’t crash again? I have not yet decided which specific car I am planning to buy.

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How the global economic situation impacts your wallet really depends on the type of industry you are in. If your car is treating you fine, there is nothing wrong with sticking with what you have until you feel comfortable enough to spend the money. Of course, if you really feel it is time to upgrade, and are a bit unsure about your future income prospects, the objective is to never “overbuy” your car by getting something reasonable, with good resale value and ideally using a healthy downpayment. That way if the worst-case scenario did happen and you either had to downgrade or sell your car you are not in an under-water situation. But that is just good advice no matter what the larger economic situation is.

How come some new cars get massive discounts?

Question: when dealers sell cars for 10s of thousands below MSRP like the Jaguar XF Sportbrake — is it because the car is a lemon?

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Just because a car has big discounts doesn’t necessarily mean it’s a poor quality car. Usually, it means that the automaker overestimated the demand for the car and now has to throw a lot of factory rebates on the hood to get them off the lot. As you are probably aware Americans really don’t buy wagons, especially pricey ones like the XF Sportbrake. It seems Jaguar thought the US market for that ride was a bit more robust than it really is. Now they have to throw a lot of discounts on that car to move it off the lot. There is a reason why Volvo only does factory orders for the V60 and V90 wagon, and most Mercedes dealers won’t stock E-class wagons but rather just wait for orders.

Lastly, can you find some gems even in a junkyard?

So I recently went to the junkyard to fix the frond-end on my Camry. And I noticed they have cars for sale. Not junkers, actual cars you could (probably) drive home.

The junkyard I was at called them builders, but other places might call them something different.

So my question is, would I be smart to buy them, or are they money pits waiting to happen? Theyre at a junkyard, so already I know They’re a little rough.

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This is probably a better question for our Jeep hoarder enthusiast who spends a lot more time at junkyards than I do, but the key thing here is that cars end up in junkyards for a reason and some are in better condition than others. If you know how to fix things yourself and are familiar with that car these could be good opportunities, but if you are inexperienced, you could get in over your head

Got a car buying conundrum that you need some assistance with? Email me at tom.mcparland@jalopnik.com!

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

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