Buying or leasing a car in 2022? Here's what experts say to expect

Retail Sales
Posted at 6:59 AM, Jan 07, 2022
and last updated 2022-01-14 13:13:58-05

(WXYZ) — If you have to get a new car in 2022, it could be a tough time. With inflation and low inventory because of the chip shortage, deals are hard to find.

Many are wondering what's the best way to go. Should you buy a new car, lease one, or go with a used car?
We went to the experts for some answers.

John McElroy, the host of Autoline.TV, said dealers aren't offering many discounts or incentives. So, if you can put the brakes on buying a car for another year or so, he says to wait.

"We have never seen car prices go up as fast as they have in the last year. Never. I mean it's astonishing," he said.

But, if waiting is not an option, McElroy's sources tell him there may be one way to come out on top.

“If you order a car rather than buying off the dealer’s lot, and you’re willing to wait a couple of months to get exactly what you want, you’ll get exactly what you want, and you might even get a slightly better price that way," he said.

If you're considering going electric, McElroy recommends you lease instead of buy because technology is advancing so quickly that he thinks the EV selection will be much better in 3-to-4 years.

Ronald Montoya, the Senior Consumer Advice Editor at Edumunds, said the average new and used monthly vehicle payments are expected to shatter records in Q4 of 2021.

“It’s getting harder for the average person to afford a car, and what ends up happening is they end up stretching out these loans into 72, and possibly 84 months," Montoya said.

The average monthly payment for a new car in the fourth quarter for 2021 was $636, according to Edmunds. That's a record high.
In Q3 it was $614, and in Q4 of 2020 it was $581.

For used cars, the average payment in Q4 of 2021 was a staggering $520. It was $500 in Q3 of 2021 and $437 in Q4 of 2020.

Some good news? There are now low APRs – about 4.1% for new cars and 7.4% for used cars, according to Edmunds data from the fourth quarter of 2021.

What advice does Montoya have for car buyers?

"I would say cast the net that much wider. Don’t be afraid to shop out of your county and possibly out of your state," Montoya said.

If you do shop out of state, make sure the dealership is able to handle Michigan sales tax and registration.

If you're contemplating buying a much older used car, Montoya recommends you really double-check its condition so you don't get socked with expensive repairs.

You can get a vehicle history report from Carfax and Autocheck, which will show if the vehicle has been in an accident, how many owners it has had, and if there are any issues with the mileage.