Is It the Right Time to Buy a Car?
The last couple of years have seen inflation rates at record highs across the globe and in specific industries, such as the housing and auto industries. This has led many consumers to wonder when the right time is to make large purchases.
Car prices have soared sky-high for 2023, making many Americans reconsider if this is the year that they should get a new vehicle. Take a closer look to learn the answer to “When is the best time to buy cars?”
The Car Market’s Current State
The auto market is struggling with obstacles like microchip shortages, supply chain issues, and inflation. The projections for 2023 are dicey, at best, according to auto experts. The industry has a lot of challenges to recover from. Some things point to the prices easing up, but it will take a while.
December 2022 saw a record high for car prices, with $49,507 being the average new car ticket price. Prices did start to fall over the following months but are still over 5% higher than they were in February of 2021. Used cars reflect the high inflation rates as well.
New Prices Fall, Used Prices Creep Up
If you look at the trends in the automotive industry, you’ll notice something odd. The prices for new cars are falling while used car prices are creeping up. That being said, new car prices are still at record highs, but they are just slightly lower than they were months ago.
Overall, the consensus is that you can likely start using your favorite car-buying negotiation techniques and get an okay price. If you want a new car, you can go ahead and start looking. Keep in mind that experts predict new car prices will keep dropping, so waiting to see what happens is also an option. For reference, the average new car cost $48,008 in March.
But the opposite is true for used cars. For reference, the average used car cost $26,213 in March. Importantly, wholesale prices have started to rise again. This is a direct result of the low supply of used cars at dealerships. This trend of low used car inventories goes back to 2019 but it worsened during the pandemic.
2023 and Car Insurance
This year is looking a bit bleak for car insurance rates as well. The costs are rising, leaving many people to wonder, “Is car insurance getting worse or is it my imagination?”
Between the premiums driving up and repair processes slowing down, many drivers are extremely frustrated with the current insurance climate. Many insurance companies have been accused of pressuring their repair facilities into using cheaper parts and generally cutting corners.
Timing Is Everything
Generally, the end of the year is the best time to purchase your vehicle. If you can’t wait until then, you can still get other rebates, incentives, and car deals at other times of the year. The best time is between October and January, with the last week of December being the best time to purchase. New Year’s Eve and Mondays are other great days to buy.
At the end of the year, many salespeople are actively pushing to clear the lot and meet their end-of-the-year quotas. This means they generally have more promotions during this as well.
The Good News If You Have Sticker Shock
Auto prices have risen significantly in the last few years, but it comes with some good news. New cars now last longer and have fewer issues in their early years. They also come with more features, including safety and connectivity, than you got just a few years ago.
On top of that, if you are trading in a used car, the shortage of used cars is an advantage. Your auto will be worth more, helping to offset some of the sticker shock.
Conclusion
If you want a new car, now is a great time to shop around since the market is seeing a decrease in new car prices. If you prefer a used car, you may want to hold off if you can. The general rules of thumb for buying a car still apply, so you can expect the best deals at the end of the year, right before new models arrive, and on Mondays or Tuesdays.