Buying a Car Now Is Brutal—New or Used. Read This First.

Angela Hill, a 36-year-old recruiter in the Orlando, Fla., area, has her heart set on a 2021 Honda Civic Hatchback EX—in white. She looked at used 2020 Civic models, and said they not only were similar in price to the new models but also had thousands of miles on them. Despite calling around to multiple dealers, Ms. Hill said she has not yet been able to get anyone to negotiate on price. “They’re just not going to because it’s their market,” she says, for more details Go to website

Ms. Hill has been watching YouTube videos for tips, and has also enlisted the help of an auto consultant to assist as she looks at her options.

Analysts say there are still ways to score a deal, although it requires a considerable amount of research and planning. Here’s what to do if you are in the market for a vehicle.

Look closely at new vs. used—in some cases, the deal calculus has changed

Prices for both new and used cars are high. The surge is driven in part by the global chip shortage, which is straining new-car inventories. This has led more consumers to shop the preowned market, increasing demand for used cars and eroding dealer inventories. Many consumers will find that they have to compromise and be flexible when purchasing.

Consumers will need to be diligent about doing their research to find deals. Websites such as Edmunds, CarGurus and Kelley Blue Book allow you to research makes and models, as well as reviews and prices. Whether you can get a better deal on a new or used car will depend on the type of car you are interested in, the model and the trim, says Mr. Drury.

On average, new cars are still more expensive than used cars. In June, the average transaction price for a new vehicle was $39,942, an increase of 14% from June 2020, according to the research firm J.D. Power. The average transaction price for a used vehicle was $27,984, up 24% from June 2020.

Consider a new sedan—or an older used car

Certain types of vehicles, such as pickup trucks and sport-utility vehicles, are sometimes selling for more than the sticker price, says Mr. Drury. If you don’t need a large vehicle, you can likely find a better deal by purchasing a sedan, he says.

Some consumers who can’t find new models are considering used models with low mileage, says Matt Dundas, director of finance for Carvana, an online used-car seller. If you are willing to buy an older used car, you might be able to get a better deal because you won’t be competing with buyers who will pay more for newer, low-mileage cars, he says.

You might also consider widening your search, says Michelle Krebs, executive analyst at Cox Automotive. Florida and Texas currently have limited inventories, but, if you can swing it, New York and Washington, D.C., for example, have more availability, she says.

If you can’t find what you are looking for, consider leasing

Consumers who find themselves disheartened after realizing that they might have to concede on the color, or even the brand, of car might instead consider leasing for a short period to see if the market improves. “If you can’t get what you really want, you might as well just borrow what you kind of want,” says Mr. Drury.

However, 10,000-mile-per-year leases are now the most common and might not be sufficient for some people, says Tyson Jominy, vice president of data and analytics at J.D. Power. “Check to make sure that the mileage will work for your lifestyle as a consumer,” he says.

One tip for buyers is to try checking with various dealerships to determine whether they can be flexible on price.

Scour for discounts, but be realistic

Incentives for purchasing are at their lowest in years, says Ms. Krebs. But there are some discounts that are often available, such as money off for recent college graduates or members of the military. Some employers offer friends-and-family discounts for certain manufacturers. You might also try a club membership that offers auto discounts, such as at Costco, says Jeff Schuster, president of global forecasting at the industry research firm LMC Automotive.

You should also try calling around to various dealerships to determine whether they can be flexible on price, and whether they might have information about vehicles that aren’t yet listed. “Working with a dealer right now may be the best way to find what you’re looking for,” says Mr. Jominy.

Stuart Fischer of Huntsville, Ala., spent a few weeks in May searching for a new truck. He had never purchased a new vehicle, preferring to buy used, and found limited options during his search. Mr. Fischer, 34 years old, called around seven Ford dealers in his region and eventually ordered a new F-250 from a rural Ford dealer about 100 miles away. “Why pay $80,000 for a used truck when I could buy a new one for less than $50,000?” he said.

You can also look into becoming preapproved for an auto loan, and shop around for the best interest rate to finance your purchase.

Don’t assume your trade-in car isn’t worth anything

Trading in an old car is the main form of leverage consumers have in this market, says Mr. Schuster. Even if you have an old car, you shouldn’t assume it isn’t worth anything, and you can use your earnings to offset the cost of your new purchase.

The average transaction price for all vehicles sold at dealerships with mileage between 100,000 and 109,999 was $16,489 in June 2021, a 31% year-over-year increase, according to Edmunds.

You can check the value of your trade-in car with an online reseller, such as Carvana or Vroom, and then take those offers to a local dealer and pursue the best deal, says Mr. Jominy.

Write to Allison Pohle at [email protected]