"2024 is probably the best year since the pandemic to buy a new car," Mark Schirmer, director of industry insights at Cox Automotive, told ABC News. "2021 and 2022 were really difficult years. Dealers are talking about discounts again ... this was not happening 18 months ago.
But the good news is that market trends look promising for car buyers. With vehicle supply and financing options likely to improve, Cox concludes that "2024 will be the best year for car buyers since the pandemic."
McBride shares that while the high-rate environment will persist, rates will ease for most borrowers in 2024. Increased competition between lenders may help drivers secure a good rate. However, he warns, “don't expect auto loan rates to fall enough to offset the increases we've seen over the past couple of years.”
New vehicle sales in the U.S. are on pace for a seasonally adjusted annual rate of 15.8 million in 2024, Cox Automotive said in a press release Monday. While the seasonally adjusted annual rate was down slightly from the 15.9 million units sold in December, it's about 0.7 million units ahead of January 2023.
Automakers typically begin rolling out their 2024 model year vehicles in the summer of the previous year – or sometimes earlier. There are a number of 2024 model year vehicles that have already been released prior to the new year while others will debut in just a few months.
For most buyers in 2024, new car deals are more sensible due to lower financing costs and attractive incentives. Used car prices are declining but remain high, affected by the pandemic's long-term impact on production.
What Is the Best Month to Buy a Car? In addition to certain times of the week or holidays, some months are better to buy or lease new vehicles or purchase used cars than other months. In general, May, October, November and December are the best months to visit the car dealership.
In 2024, We Officially Bid Farewell to the Seller's Market. After peaking in the years immediately following the pandemic, dealer profitability is expected to fall further in 2024. Incentives and discounts will continue to grow, but vehicles are not becoming less expensive – only margins are being compressed.
The auto industry is expected to grow 2% over the course of the coming year, yielding 15.7 million new vehicle sales and 36.2 million used, according to Cox analysts. Sales will grow slowly as a result of a weakening job market, declining inflation, improving consumer sentiment and declining interest rates.
Edmunds anticipates U.S. auto sales of 15.7 million vehicles in 2024. This represents a nominal year-over-year uptick of 1.3%, compared with year-over-year growth of 13% in 2023. Cox Automotive adopts a more cautious outlook, projecting a more modest increase in industry sales to 15.6 million units.
An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.
Many forecasters expect rates to remain well under 7 percent this year. McBride expects them to drop all the way to 5.75 percent by the end of 2024. “Inflation has been coming down — and coming down faster than expected in recent months — which bodes well for mortgage rates,” says McBride.
Buy a car at the end of the year for the best deals, as prices may continue to rise in 2024. December, especially the last week, is the best time to buy a car due to high manufacturer and dealer incentives, as well as extra advertising group incentives.
Most Popular Safety Features In Cars Today
As someone who values your life and the life of your passengers, you should probably get a new car every 8-10 years. It's as logical as getting life insurance at around age 30. After 10 years, you will likely be much wealthier as well.
In 2023 and 2024, it's the reduced supply of used cars that ensures prices will remain elevated. Used car prices rose 36% in 2021, only to fall 7% the year after.
Individual vehicle prices aren't going down, but the average car price is overall. That's because automakers are mixing up vehicle types and trims, according to analysts at AlixPartners. Combined with incentives improving, average transaction prices could fall 7% by 2025.
According to a Kelley Blue Book report, vehicle prices just had the largest yearly decline ever. New car prices, which almost always increase from year to year, are down 2.4% in the last 12 months. The average price of a new vehicle was $48,759 in December, which is a decrease from $49,939 at the end of 2022.
By 2025, 25% of cars sold will have electric engines, up from 5% today. But most of those will be hybrids, and 95% of cars will still rely on fossil fuels for at least part of their power. That means automakers will need to make internal combustion engines more efficient to comply with new standards.
In the spring.
Warmer weather and tax refunds bring buyers out in droves. With so much demand, dealers are far less likely to be in the mood to lower their prices. Plus they still have several months before the new models flood the lots. At the beginning of a new model year (assuming you want next year's model).
Is the semiconductor crisis finally over? Some chip shortages could remain through 2023 and into 2024, though supply of semiconductors and raw materials will generally improve in the auto sector. The auto sector can expect a strong year in 2023, with global car production up 3%.
High interest rates and the ongoing United Auto Workers (UAW) strike threaten sales success. Cox Automotive Chief Economist Jonathan Smoke explains, “Limited inventory was the leading factor one year ago, but now it's interest rates, the economy, and credit availability, which all make affordability more challenging.
The main difference will be how much you can negotiate off the retail price: New cars. It is considered reasonable to start by asking for 5% off the invoice price of a new car and negotiate from there. Depending on how the negotiation goes, you should end up paying between the invoice price and the sticker price.
Best months to buy a car
On the other hand, December scores highly on both frequency and size of discounts — it's the month with the highest average discount and third highest frequency of deals — making it your best bet overall to find a good deal.