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Still, consumers may start seeing lower prices in 2024, experts say. Supply chain improvements should boost inventory while interest rate cuts are on the horizon.
“It’s going to be a much better time for consumers to buy a car in 2024 than it is this year,” said Paul Vaati, industry analyst at market research firm AutoPacific.
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November is the third month in a row that the average price of a new car transaction was lower than last year. The average new car sold for $48,247 in November, up less than 1 percent from October but down 1.5 percent from last year, according to data from Kelley Blue Book.
Edmonds put the November average at slightly less, $47,939, according to data provided to CNBC.
In 2023, low inventory in a high-demand market didn’t leave much room for discounts. That is likely to change next year as dealers will be motivated to sell more cars on the lot, experts say.
“As supply increases, we tend to see more incentives thrown at the caps,” Vaati said.
Car shoppers can also see more models with lower sticker prices before the rebates. As supply chains continue to normalize, “we’re going to start seeing automakers produce more lower-end models that are more affordable, and that should help reduce that average monthly payment,” he said.
Most of the consumers who bought a new EV in the past year are still considered “early adopters,” or buyers who want to have the latest technology and are not as price-sensitive, Waatti said.
“At this point, we’ve pretty much gone through all the early adopters. Now we’re seeing the natural demand for EVs emerging and it’s not as strong, leading to a slight drop in sales,” he said.
Some automakers are realigning production in response to this lower demand. For example, Ford Motor plans to cut production of the F-150 Lightening in half in 2024. “That’s a very big number,” Drury said.
Likewise, General Motors says it is delaying the launch of the all-electric Chevrolet Silverado for another year, Drury said.
“These vehicles that we had very high hopes for, a lot of expectations … they remain unfulfilled,” he said.
While market growth is expected to continue, it will not be at the same pace as in the past 12 to 18 months, Vaati said.
After two to three years of “full steam ahead,” electric cars are now “sitting on dealer lots gathering dust,” Drury said. “We don’t have the enthusiasm we used to have.
As manufacturers and dealers look to clear these vehicles, buyers may encounter more generous incentives next year, as well as cheaper new models.
Here are two key things to keep in mind if you’ve been waiting for prices to cool before buying a new car:
1. Incentives are back: While incentives such as rebates and discounts dipped slightly in October, they rebounded to their highest point for the year in November, according to Cox Automotive.
More incentives are likely to emerge as more cars are offered on the lot, Drury said. If you need a new car, “look for those incentives, they do exist,” he said.
Waatti added, “Consumers should expect increased rebates, subsidized leases, low-interest loans and other incentives to continue to grow in 2024 as inventory builds.”
2. Make the most of your exchange: The limited supply of new and affordable cars in recent years has pushed buyers into the used car market. As demand for used cars has increased, so have prices, Vaati said. However, used car values are falling, which means trade-in values are also falling.
“No longer defying market norms, your value isn’t going up any time soon,” Drury said.
Get an estimate of trade-in value from a dealer and consider selling the car yourself if you want to maximize the car’s value, Waatti said.
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