New automotive costs have been falling for many of 2023, with the typical new automotive promoting for $47,936 in October, Kelley Blue Ebook reported. Total, new automotive costs are down 1.4% since October 2022 and three.5% since their peak in December 2022.
Will this downward development proceed into 2024? GOBankingRates spoke with David Meniane, CEO of CarParts.com, to get his predictions.
Automotive costs will possible proceed to lower
If automotive costs comply with latest developments, they are going to possible proceed to lower into 2024. Nonetheless, nothing is assured.
“It’s difficult to predict whether the cost of owning or purchasing a car will decrease in the coming year,” Meniane stated. “Last month, the average price for a new vehicle was [$47,936] — a [1.4%] dip from last year, according to the latest KBB data. This suggests that new car prices might drop in 2024.”
One issue that would result in value drops is an oversupply of recent automobiles.
“One recent report estimates that global car production will exceed sales by 6% this year, creating a surplus of 5 million vehicles that will receive price cuts to facilitate their sale,” Meniane stated.
Meniane stated that when you purchase in 2024 may also affect the worth you get.
“It depends on the time of year,” he stated. “For example, October to January is typically the best time to buy a vehicle, especially during the month of December. If you’re a prospective buyer intimidated by the prices you’re seeing in the first half of 2024, you might want to wait until the end of the year when manufacturers announce large discounts and deals.”
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Which varieties of automobiles will see the largest value drops?
Meniane believes that SUVs and used sedans might see important value decreases within the coming yr.
“Oil prices are projected to rise in 2024, which means SUVs and other less fuel-efficient vehicles will be less expensive to purchase,” he stated. “Manufacturers will use competitive pricing to convince consumers to purchase larger cars, as people won’t want to drive cars that run up a large gas bill. This may make used sedans, especially hybrid models, more affordable compared to other automobiles on the market.”
However, new EVs and hybrid automobiles will possible swing within the different course.
“Cars with advanced electric and hybrid technology are likely to maintain or even increase their price points,” Meniane stated. “Key factors like growing consumer interest, an increasing societal emphasis on sustainability and government incentives for EV owners will contribute to steadily growing demand, which will keep EV prices stable and rising.”
As well as, any automobiles which can be reliant on semiconductor chips may even see costs remaining regular or rise, as provide shortages proceed to be a problem.
“Supply chain disruptions and shortages of semiconductor chips have affected the automotive industry in recent years, driving up the price of production and thus the cost to a prospective buyer,” Meniane stated. “If these challenges persist into the next year, certain models, especially those heavily reliant on electronic components, might experience price increases due to constrained supply and increased price of production.”
Ideas for automotive shopping for in 2024
If you happen to’re planning on shopping for a automotive within the coming yr, search for methods to chop down on prices. For instance, you may think about shopping for a used automotive as an alternative of a brand new one.
“Prospective buyers should look to see if they can purchase a used car with a reliable car report and parts history,” Meniane stated. “With recent advancements in durability and technology, many preowned vehicles offer excellent performance at a fraction of the cost.”
It’s additionally essential to be an knowledgeable purchaser when heading to the dealership.
“Make sure to do your research,” Meniane stated. “There is a lot to consider when purchasing a vehicle, and buyers should leverage online resources like car comparison tools, customer reviews and expert opinions to make the most informed decision.”
Lastly, be real looking about how a lot automotive you possibly can truly afford and all the elements that play into that price.
“Be mindful of the total cost of ownership, including maintenance, fuel efficiency and insurance rates,” Meniane stated. “Some cars may have a lower sticker price but higher long-term costs because they use more fuel, require more frequent maintenance or are known to have worse security/anti-theft protections.”