New automobile costs have been falling for many of 2023, with the typical new automobile promoting for $47,936 in October, Kelley Blue E book reported. General, new automobile costs are down 1.4% since October 2022 and three.5% since their peak in December 2022.
Will this downward pattern proceed into 2024? GOBankingRates spoke with David Meniane, CEO of CarParts.com, to get his predictions.
Automobile costs will probably proceed to lower
If automobile costs observe current developments, they’ll probably proceed to lower into 2024. Nevertheless, nothing is assured.
“It’s troublesome to foretell whether or not the price of proudly owning or buying a automobile will lower within the coming 12 months,” Meniane stated. “Final month, the typical worth for a brand new car was [$47,936] — a [1.4%] dip from final 12 months, in keeping with the most recent KBB information. This implies that new automobile costs would possibly drop in 2024.”
One issue that would result in worth drops is an oversupply of recent automobiles.
“One current report estimates that international automobile manufacturing will exceed gross sales by 6% this 12 months, making a surplus of 5 million automobiles that may obtain worth cuts to facilitate their sale,” Meniane stated.
Meniane stated that when you purchase in 2024 may also affect the worth you get.
“It is dependent upon the time of 12 months,” he stated. “For instance, October to January is often the perfect time to purchase a car, particularly in the course of the month of December. Should you’re a potential purchaser intimidated by the costs you’re seeing within the first half of 2024, you would possibly need to wait till the tip of the 12 months when producers announce giant reductions and offers.”
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Which varieties of automobiles will see the largest worth drops?
Meniane believes that SUVs and used sedans may see vital worth decreases within the coming 12 months.
“Oil costs are projected to rise in 2024, which implies SUVs and different much less fuel-efficient automobiles might be cheaper to buy,” he stated. “Producers will use aggressive pricing to persuade customers to buy bigger automobiles, as individuals received’t need to drive automobiles that run up a big fuel invoice. This may increasingly make used sedans, particularly hybrid fashions, extra inexpensive in comparison with different cars available on the market.”
Alternatively, new EVs and hybrid automobiles will probably swing within the different path.
“Vehicles with superior electrical and hybrid expertise are prone to preserve and even improve their worth factors,” Meniane stated. “Key elements like rising client curiosity, an growing societal emphasis on sustainability and authorities incentives for EV house owners will contribute to steadily rising demand, which can hold EV costs steady and rising.”
As well as, any automobiles 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 business in recent times, driving up the worth of manufacturing and thus the fee to a potential purchaser,” Meniane stated. “If these challenges persist into the following 12 months, sure fashions, particularly these closely reliant on digital parts, would possibly expertise worth will increase as a result of constrained provide and elevated worth of manufacturing.”
Ideas for automobile shopping for in 2024
Should you’re planning on shopping for a automobile within the coming 12 months, search for methods to chop down on prices. For instance, you would possibly take into account shopping for a used automobile as an alternative of a brand new one.
“Potential consumers ought to look to see if they’ll buy a used automobile with a dependable automobile report and components historical past,” Meniane stated. “With current developments in sturdiness and expertise, many preowned automobiles provide wonderful efficiency at a fraction of the fee.”
It’s additionally essential to be an knowledgeable purchaser when heading to the dealership.
“Be sure to do your analysis,” Meniane stated. “There’s a lot to contemplate when buying a car, and consumers ought to leverage on-line assets like automobile comparability instruments, buyer critiques and professional opinions to take advantage of knowledgeable determination.”
Lastly, be real looking about how a lot automobile you possibly can truly afford and all the elements that play into that price.
“Be aware of the overall price of possession, together with upkeep, gas effectivity and insurance coverage charges,” Meniane stated. “Some automobiles could have a decrease sticker worth however increased long-term prices as a result of they use extra gas, require extra frequent upkeep or are recognized to have worse safety/anti-theft protections.”
