As we get deeper into 2024, you might be pondering a common question: ‘Should I buy a car now, or should I wait?’ Luckily, the CarEdge team has created a comprehensive guide to assist you in making the right choice. Whether you’re considering a new or used car purchase, various market factors come into play that can sway your decision. In this guide, we’ll provide insights into the best strategies for both scenarios.
New Car Market: Last Year’s Sales Continue Into 2024
If you’re on the fence about buying a new car now or waiting, we have answers for you. Experienced car shoppers know that the best deals of the year often come right at the end. Indeed, December’s sales were huge, but something remarkable is happening. Year-end sales have largely carried over into 2024. Why? Let’s delve into the reasons.
1. The Urgency to Sell: Auto manufacturers and dealerships are motivated to clear out their remaining 2023 inventory. They need to make room for the incoming 2024 models, and every day a 2023 model sits on the lot, it eats into their profits. The longer a car remains unsold, the more it costs in terms of dealership floorplanning expenses.
2. Rising Interest Rates: Rising interest rates make the cost of borrowing money go up. As rates increase, automakers aim to counteract this by offering more attractive financing options to entice buyers. This month, there are low APR offers that making buying a new car much more affordable. If low APR financing is important to you, you’ll want to see the best offers this month.
3. Slowing Car Sales: We see it every year. Between January 1 and spring car buying season, car sales slow to a trickle. Once Americans begin receiving their tax refunds, car sales receive a much-needed boost. In the meantime, dealers and manufacturers alike are using the tools at their disposal to sell cars.
Used Car Market: Uncertainty Ahead
When it comes to the used car market, the situation is less clear-cut. Used car prices have been on a downward trend. However, what will happen deeper in 2024 is far less certain. Here’s what you need to know:
1. Current Trends: Used car price data from Black Book indicates that used car prices have been slowly declining, dropping an average of 2% over the past month. At the wholesale auctions where car dealers buy and sell used inventory, prices have experienced more drastic swings.
But what happens beyond the winter? The Black Book data below shows that for all of the five previous years, used car prices held flat for the first 10 weeks of the year. Beyond that, volatility has obscured any obvious trends in the past 5 years.
2. January and Beyond: Beyond January, predicting used car prices becomes challenging. The used car market is still grappling with the long-lasting effects of pandemic-related car shortages. These impacts are likely to persist for several more years. As we mentioned previously, used car prices have remained steady for the first 10 weeks of each of the past five years. History tells us that prices are likely to level off in January and February. What happens beyond that is anyone’s guess.
Take Advantage of Deals Today
For new car shoppers, this month’s sales present an unparalleled opportunity to secure a low interest rate. With numerous incentives, year-end urgency, and the availability of 2023 models, now is a fine time to buy if you are in need of a vehicle soon. Of course, the best decision for you wallet is usually to keep the vehicle you already have, but sometimes that’s not an option.
However, the used car market remains more unpredictable. While recent trends suggest falling prices, the full extent of these changes and how long they will last are uncertain. With the unique dynamics at play, waiting is a bit of a gamble.
Used car prices may continue to fall, but a more likely scenario is prices holding steady in early 2024. Waiting too long could result in even higher interest rates, adding insult to injury as rates already average well north of 13% APR.
Ultimately, the decision to buy a car now or wait should be based on your specific circumstances and priorities. Whether you choose to take advantage of this month’s deals or navigate the evolving used car market, careful research and timing can lead to a sweet deal on your dream car. We’re here to help!
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