New car prices have been falling for many of 2023, with the typical new car promoting for $47,936 in October, Kelley Blue Book reported. General, new car prices are down 1.4% since October 2022 and three.5% since their peak in December 2022.
Will this downward pattern continue into 2024? GOBankingRates spoke with David Meniane, CEO of CarParts.com, to get his predictions.
Automotive costs will probably proceed to lower
If automotive costs comply with current developments, they’ll probably proceed to lower into 2024. Nonetheless, nothing is assured.
“It’s tough to foretell whether or not the cost of owning or buying a automotive will lower within the coming yr,” Meniane mentioned. “Final month, the typical value for a new vehicle was [$47,936] — a [1.4%] dip from final yr, based on the newest KBB information. This implies that new automotive costs may drop in 2024.”
One issue that might result in value drops is an oversupply of latest vehicles.
“One current report estimates that international automotive manufacturing will exceed gross sales by 6% this yr, making a surplus of 5 million automobiles that can obtain value cuts to facilitate their sale,” Meniane mentioned.
Meniane mentioned that when you purchase in 2024 will even impact the value you get.
“It depends upon the time of yr,” he mentioned. “For instance, October to January is usually one of the best time to purchase a car, particularly through the month of December. Should you’re a potential purchaser intimidated by the costs you’re seeing within the first half of 2024, you may need to wait till the tip of the yr when producers announce giant reductions and offers.”
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Which varieties of vehicles will see the largest value drops?
Meniane believes that SUVs and used sedans may see vital value decreases within the coming yr.
“Oil costs are projected to rise in 2024, which suggests SUVs and different much less fuel-efficient automobiles will likely be cheaper to buy,” he mentioned. “Producers will use aggressive pricing to persuade customers to buy bigger vehicles, as individuals gained’t need to drive vehicles that run up a big gasoline invoice. This will make used sedans, particularly hybrid fashions, extra reasonably priced in comparison with different cars in the marketplace.”
Then again, new EVs and hybrid cars will probably swing within the different course.
“Vehicles with superior electrical and hybrid expertise are prone to preserve and even improve their value factors,” Meniane mentioned. “Key elements like rising shopper curiosity, an rising societal emphasis on sustainability and authorities incentives for EV homeowners will contribute to steadily rising demand, which is able to preserve EV costs secure and rising.”
As well as, any vehicles which are reliant on semiconductor chips might even see costs remaining regular or rise, as provide shortages proceed to be a difficulty.
“Provide chain disruptions and shortages of semiconductor chips have affected the automotive trade lately, driving up the value of manufacturing and thus the fee to a potential purchaser,” Meniane mentioned. “If these challenges persist into the following yr, sure fashions, particularly these closely reliant on digital elements, may expertise value will increase attributable to constrained provide and elevated value of manufacturing.”
Suggestions for automotive shopping for in 2024
Should you’re planning on buying a car within the coming yr, search for methods to chop down on prices. For instance, you may take into account buying a used car as an alternative of a brand new one.
“Potential consumers ought to look to see if they’ll buy a used car with a reliable car report and components historical past,” Meniane mentioned. “With current developments in sturdiness and expertise, many preowned automobiles supply glorious efficiency at a fraction of the fee.”
It’s additionally essential to be an knowledgeable purchaser when heading to the dealership.
“Be sure that to do your analysis,” Meniane mentioned. “There’s a lot to contemplate when buying a car, and consumers ought to leverage on-line sources like automotive comparability instruments, buyer critiques and knowledgeable opinions to take advantage of knowledgeable determination.”
Lastly, be reasonable about how a lot automotive you may truly afford and the entire elements that play into that value.
“Be conscious of the total cost of ownership, together with upkeep, fuel efficiency and insurance charges,” Meniane mentioned. “Some vehicles could have a decrease sticker value however greater long-term prices as a result of they use extra gasoline, require extra frequent upkeep or are identified to have worse safety/anti-theft protections.”
