Auto Experts: year 2023 presented challenges for both new and used car buyers, marked by soaring prices due to limited inventory and high borrowing costs. According to Ivan Drury, Director of Insights at Edmunds, “Interest rates have taken such a toll on purchasing power.” However, there’s a glimmer of hope on the horizon for consumers eyeing a new set of wheels in 2024.
Anticipated Price Drop and Supply Chain Improvements
Auto experts suggest that 2024 might usher in a more favorable environment for car buyers. The anticipated drop in prices can be attributed to improvements in the supply chain, which is expected to bolster inventory. Additionally, whispers of impending interest rate cuts add a layer of optimism for prospective buyers.
Paul Waatti, an industry analyst at market research firm AutoPacific, expresses confidence, stating, “It’s going to be a much better time for a consumer to buy a car in 2024 versus this year.”
November Trends and Average Transaction Prices
Analyzing recent trends, November marked the third consecutive month where the average transaction price for new cars was lower than the previous year. Data from Kelley Blue Book revealed that the average new car sold for $48,247 in November, showing a 1.5% decline from the previous year. Edmunds reported a slightly lower average at $47,939 for the same period.
Supply and Incentives: What to Expect in 2024
One of the critical factors influencing the car market in 2023 was low inventory in a high-demand market, leaving little room for discounts. However, experts predict a shift in 2024, with dealers motivated to move more cars off the lot. As supply increases, consumers can anticipate more incentives, such as rebates and discounts, making car purchases more attractive.
“As supply goes up, we tend to see more incentives being thrown on the hoods,” notes Waatti, emphasizing the potential for more affordable deals for car shoppers.
Electric Vehicles (EVs) and Changing Dynamics
The landscape for electric vehicles (EVs) is evolving, with a shift in consumer demographics. Early adopters, who embraced EVs for the latest technology, are transitioning to a broader market. This shift, coupled with recalibrations in production by major automakers, could lead to more deals on electric vehicles.
Drury highlights the changing dynamics, stating, “After two to three years of ‘full steam ahead,’ electric cars are now ‘sitting on dealer’s lots collecting dust.’ We don’t have the enthusiasm we used to.” However, this could mean more incentives and cost-effective new models for buyers in 2024.
Key Considerations for Car Shoppers in 2024
1. Incentives Making a Comeback
Incentives such as rebates, subsidized leases, and low-interest loans declined slightly in October but rebounded to the highest point in November, according to Cox Automotive. As inventories grow in 2024, consumers can expect increased incentives. Waatti advises buyers to “look for those incentives, they do exist.”
2. Maximizing Your Trade-In
Limited supply and high demand in previous years elevated used car prices, influencing buyers to enter the used car market. However, the scenario is changing, and used car values are coming down. Drury suggests getting an estimate of the trade-in value from a dealer and considering selling the car independently to maximize its value.
Conclusion from Auto Experts: A Promising Year for Car Buyers
As we approach 2024, the automotive landscape seems poised for positive changes. With the potential for lower prices, increased incentives, and a more dynamic electric vehicle market, consumers may find 2024 to be an opportune time to make their next car purchase.
FAQs:
- Why are experts optimistic about lower car prices in 2024? Improvements in the supply chain are expected to bolster inventory, and potential interest rate cuts may contribute to lower car prices in 2024.
- What trends were observed in November regarding car prices? November saw the third consecutive month of lower average transaction prices for new cars compared to the previous year
providing a positive outlook for buyers. - How will the electric vehicle market change in 2024? The electric vehicle market is evolving as early adopters transition to a broader market. Automakers recalibrating production may lead to more deals and incentives for electric vehicles in 2024.
- What should buyers consider when shopping for a car in 2024? Buyers should anticipate increased incentives
such as rebates and low-interest loans, and consider maximizing their trade-in value as the market dynamics shift in 2024. - Is it advisable to wait until 2024 to buy a car? Considering the potential for lower prices, increased incentives
and a changing market landscape, waiting until 2024 may be advantageous for buyers looking for a more favorable car-buying environment.