More than 40% of car shoppers are looking to walk away with a new set of keys this Memorial Day weekend after capitalizing on upcoming deals, according to a new report.
However, experts say it's an even better time to sell.
Dealerships will likely scoop up unwanted cars due to the fact that inventory levels are falling while the demand for used cars has increased, according to Cars.com.
Even though Memorial Day deals are floating around, it is "prime time for consumers with a little-used extra vehicle sitting in their garage to cash in as most dealers are relying on trade-ins to maintain their stock," Cars.com's assistant managing editor, Kelsey Mays, said.
In fact, consumers will have a better chance at selling their car for a higher profit given the fact that used-car list prices increased 14% since the beginning of January, according to Cars.com.
"Memorial Day weekend is traditionally a very active car-shopping holiday with significant discounts offered across the industry, but the global chip shortage and huge consumer demand continues to impact both new and used dealer inventory," Mays said.
The vehicle scarcity and the soaring prices can be traced to the outbreak of the coronavirus more than a year ago. As the virus spread, auto factories shut down for a couple of months. With millions more people working from home, demand for laptops and monitors led semiconductor makers to shift from autos to personal electronics.
Soon, though, a faster-than-expected economic rebound boosted demand for vehicles, and auto plants tried to restore full-scale production. Yet chip makers couldn’t respond swiftly enough.
If buyers trade in their car, they will benefit from "its inflated residual value, which can help take the sting out of a higher-priced replacement vehicle," Mays said.
This is especially true if a consumer's car is less than four years old, she added. This is helpful given the fact that both used and new car prices have risen.
Like used cars, new-car list prices have also increased by more than 5% since the beginning of the year.
Despite rising rates for both new and used cars, though, more than half of shoppers – about 51% – are willing to pay more on Memorial Day weekend to get the car they want, according to Cars.com's recent national survey.
The Associated Press contributed to this report.