New car priceshas fallen for most of 2023, as has the averagethe billsold for $47,936 in October,This is reported by Kelley Blue Book. In short, newcar priceshas fallen 1.4% since October 2022 and 3.5% since the peak in December 2022.
Will this downward trendcontinue in 2024? GOBankingRates spoke with David Meniane, CEO ofCarParts.com, to get his predictions.
Car prices will likely continue to fall
If car prices follow recent trends, they are likely to continue falling into 2024. However, nothing is guaranteed.
'It is difficult to predict whether that is the caseownership costsor buying a car will decline in the coming year,” Meniane said. “Last month the average price was onenew vehiclewas [US$47,936] – down [1.4%] from last year according to the latest KBB data. This suggests that new car prices could fall in 2024.”
One factor that can lead to price drops is an oversupply of new cars.
“A recent report estimates that global car production will exceed sales by 6% this year, creating a surplus of 5 million vehicles that will undergo price cuts to ease their sales,” Meniane said.
Meniane said itwhenyou buy in 2024 also affects the price you get.
“It depends on the time of year,” he says. “For example, October through January are typically the best time to buy a car, especially in the month of December. If you are a potential buyer put off by the prices you see in the first half of 2024, you may want to wait until the end of the year when manufacturers announce big discounts and offers.”
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What types of cars will experience the biggest price drops?
Meniane believes that SUVs andused sedansThere could be significant price drops in the coming year.
“Oil prices are expected to rise in 2024, meaning SUVs and other less fuel-efficient vehicles will be cheaper to buy,” he said. “Manufacturers will use competitive pricing to convince consumers to buy bigger cars because people won't drive cars that run up high gas bills. This can especially lead to used sedanshybridmodels, more affordable compared to other cars on the market."
On the other hand new electric cars andhybrid carswill probably go the other way.
“Cars with advanced electric and hybrid technology are likely to maintain or even increase their price levels,” Meniane said. “Key factors such as growing consumer interest, an increasing societal emphasis on sustainability and government incentives for EV owners will contribute to steadily growing demand, keeping EV prices stable and increasing.”
Additionally, prices for cars that rely on semiconductor chips could remain stable or rise as supply shortages remain an issue.
“Supply chain disruptions and semiconductor chip shortages have hit the auto industry in recent years, driving up production costs and thus the cost to a potential buyer,” Meniane said. “If these challenges persist in the coming year, certain models, especially those that rely heavily on electronic components, may experience price increases due to limited supply and higher production costs.”
Tips for buying a car in 2024
If you planbuy a carlook for ways to cut costs in the coming year. For example, you can considerbuying a used carinstead of a new one.
“Potential buyers should see if they can buy oneused carimmediatelyreliable carreport and share the history,” Meniane said. “With recent advances in sustainability and technology, there are manyusedvehicles offer excellent performance at a fraction of the cost.”
It's also important to be an informed buyer when you go to a storetrader.
“Make sure you do your research,” Meniane said. “There is a lot to consider when buying a car, and buyers should take advantage of online resources such as car comparison tools, customer reviews and expert opinions to make the most informed decision.”
Finally, be realistic about how much car you can actually afford and all the factors that go into that price.
"Look aftertotal cost of ownershipincluding maintenance,fuel efficiencyIninsurancerates,” Meniane said. “Some cars may have a lower sticker price but higher costs in the long run because they use more fuel, require more frequent maintenance or are known for poorer safety/theft protection.”
