Shopping for used cars in the last few years has been a gamble with record-high prices, low inventory, and rising interest rates.
Both new and used cars were expensive last year thanks to scarce inventory and high loan costs. However, 2024 may see another cooling period in prices due to a better supply chain and reduced interest rates.
Borrowing Costs Add To Car Buying Woes
Supply chain problems and high prices marred the car-buying experience for much of the last few years, but high-interest rates added to the woes in 2023. The good news is that the supply chain is still getting better and interest rate cuts should be happening in the near future. Industry experts are saying that 2024 should be a much better time to buy a car versus last year.
November 2023 became the third consecutive month of lower-than-average transaction prices for new cars. The average new car sold for $48,247 in November, which was a 1.5% decline from 2022. The average price for used cars in November 2023 was around $28,000, which is also a decline from previous months.
Increased Supply Means More Incentives
The market for new and used cars in 2023 was one of high demand but low supply. This led to a severe lack of incentives and discounts from many dealerships. However, with supply going up in 2024, dealers are likely to be more motivated to move cars off the lot. That should lead to more incentives and discounts to motivate buyers.
If you’re shopping for a new or used car in 2024, you should start to see lower sticker prices even before the discounts. As the supply chains get stronger, automakers will also put focus back on building affordable, lower-end models. In previous years, automakers have poured their limited supplies into luxury models and higher trims to make the most of what they had.
EV Shoppers Might See More Deals
Most EV shoppers from the last few years are considered early adopters, which are buyers who like to get the latest technology before it becomes mainstream. However, the EV industry has likely run through most of these shoppers, so sales are down as the demand for EV models declines.
Some automakers are responding to that by cutting production of EV models. For example, Ford plans to cut production on the F-150 Lightning in half, which is a huge number. Similarly, GM is pushing the launch of the EV Chevy Silverado out to another year.
What To Expect
If you’re shopping for used cars or new cars in 2024, there are a few things to expect. First, incentives are back on the menu for dealerships. More incentives will likely appear as inventory becomes more robust. Secondly, it’s important to make the most of your trade-in. In previous years, there was a limited supply of used cars. Now, values are more likely to go down than up.
Get the most out of your trade-in by getting a quote from the dealer and researching market values. You may want to consider selling the car yourself to get the best price.
This post may contain affiliate links. Meaning a commission is given should you decide to make a purchase through these links, at no cost to you. All products shown are researched and tested to give an accurate review for you.