Two years ago, both new and used car dealerships had low inventory and high prices on what they did have. Many customers were simply priced out of the market. But the good news is that car prices are coming down across the board for the most part. Cars are no longer flying off the lot, so dealerships are starting to lower prices.
Sales Down 26% Compared To 2022
Car sales are down roughly 26% since last year. Used cars are taking nearly 50 days to sell, and new cars are taking around 23 days to sell. The slowdown means that it now makes sense for dealerships to lower prices. Previously, both used, and new cars were flying off the lot, and customers were paying premiums simply to walk off the lot with something. That is no longer the case, and it’s the best news for car buyers since 2020.
If you’re in the boat of consumers who needed a new car a few years ago but couldn’t afford to pay the high prices, you’re in luck. Prices are definitely lower now, and that’s good news for those buyers whose current vehicle is deteriorating. However, experts say that prices are likely to come down even more in the near future. if your current vehicle still has life in it, you might want to hold off just a bit longer.
To be clear now is definitely a better time to buy than it was a few years ago, but if you can wait another year or so, it may be an even better time to buy.
What To Expect As a Used Car Shopper
If you’re looking at the used car market, there are a few things to keep in mind. Used car dealerships were paying nearly 12% less in July to stock their lots. When wholesale prices drop, retail prices usually also drop a few months later. Now that we’re in September, you should start to see some significant price drops at used car dealerships.
However, what goes on in the new market eventually reaches the used market. The last few years have seen factory closures and supply chain issues for new cars. Americans have also been buying cars at the end of the lease to get affordable prices that were locked in before the pandemic. This means roughly 8 million fewer cars will hit the used market in the next few years.
What this means for used car shoppers is that a sustained price drop is still some ways off. But prices are definitely falling, and if you can take the time to find a good deal, you should have some decent choices.
Supply Chain Updates
Supply chain issues have been one of the driving factors behind the substantial increase in car prices over the last few years. The supply chain is slowly getting back to normal, but some automakers are still restricting inventory to keep prices higher than normal. The days of big discounts on new cars might still be a long way off.
Before the pandemic, Americans bought, on average, over 17 million new cars per year. In 2021, that number was down to 15 million, and in 2022 it dived even lower to 13.7 million new vehicles. Currently, 2023 is on track for around 15 million new vehicles purchased.
But the good news is that used car dealerships are seeing a reprieve in prices for now, and that may go even lower by this time next year.
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