There are good reasons most people don’t buy a new car. Such purchases can cost you years, as high monthly payments slow down the accumulation of needed savings and investments later.
After two years of scarcity, empty new car lots and high prices, you can expect 2023 to be the year when dealers get generous. Think.
“We see a challenging final auto market globally in 2023E, as high interest rates, energy prices and financing rates affect affordability,” said Mizuho analysts. Americas, led by Vijay Rakesh, wrote on December 19.
Cox Automotive executive analyst Michelle Krebs says auto inventories are growing, but Toyota
TM,
and Honda
Ho Chi Minh City,
The number of new cars for sale remains low. One reason for the high prices is that “car manufacturers are making more expensive cars because new car buyers tend to be wealthier.”
Thomas King, president of data and analytics at JD Power, said: “Although the inventory situation improved modestly in the fourth quarter, supply remains far below where it was. consumer demand for new vehicles can be met.”
“New vehicle transaction prices continue to rise — albeit at a slower rate than earlier this year. The average price in December will set a record $46,382, up 2.5% from a year ago,” he added.
Cox Automotive/Moody’s Analytics Vehicle Affordability Index hit a new low in November, with the average income needed in 43.3 weeks to pay for a new light vehicle. Higher interest rates are also pushing some borrowers with low credit scores out of the market, according to Krebs.
“The average price of a new car in December will set a record $46,382, up 2.5% from a year ago.“
Looking further ahead, Burt Hurvich, executive vice president of Mount & Nadler, a New York-based public relations firm and car enthusiast and collector, says it’s about quality improvement. and durability, it’s a bad idea for anyone. to buy a new car, even the high-end buyers.
He suggests buying a certified used car from a manufacturer-affiliated dealer. Going to a Ford dealer to buy a used Ford, etc. He cites examples where he or family members bought cars that are two years old and worn less, saving more than 50% compared to the original new car price.
Taking this idea further, Hurvich emphasizes the importance of the human relationship, if you want to reduce maintenance and repair costs. Chances are you’ll go to a dealership to service a modern car, because increasing complexity makes it harder for individual mechanics to purchase diagnostic equipment. To reduce repair costs, “it is important to develop a relationship with the service people at the dealership. Then they will do more for you than for other people,” he says.
Krebs points out that in the current car market, you can have a hard time finding a used used car at an attractive price.
All of this stems from the need to wait to buy your next new or used car, if possible, because it could take another year for the auto market to stabilize. The cost of maintaining or repairing your new car could be much less in a few years.
“If you have to rush in,” says Hurvich, “you need to compromise.
“If you have to buy a car, you need to expand your research,” says Kebs. “Be more flexible about brands and vehicles.” She added that buyers who once insisted on choosing SUVs have turned back to looking at cars, in part because of higher gas prices. It was difficult because of Ford
F,
common engine
GM,
and Stellantis NV
STLA,
The Chrysler unit has moved away from cars in favor of SUVs and pickups.
All of this leads to another tough year for car buyers. Can you wait? Does your old car run well? Do you really need to make this huge financial move in 2023? Waiting another year could save you a bigger down payment on your next car, setting up an easier purchase in a market that could vastly improve by 2024.
