Will 2024 be a good time to buy a car? Here’s what to expect, auto experts say

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Both new and used car purchases were expensive for drivers this year, as limited inventory and high borrowing costs affected affordability.

“Interest rates have taken such a toll on purchasing power,” said Ivan Drury, director of insights at Edmunds.

Yet, consumers might begin to see lower prices in 2024, experts say. Improvements in the supply chain ought to bolster inventory, while interest rate cuts are on the horizon.

“It’s going to be a much better time for a consumer to buy a car in 2024 versus this year,” said Paul Waatti, an industry analyst at market research firm AutoPacific.

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November was the third consecutive month when the average transaction price for a new car was lower than last year. The average new car sold for $48,247 in November, an increase of less than 1% from October, but a 1.5% decline from last year, according to data from Kelley Blue Book.

Edmunds puts the November average at slightly less, $47,939, per data it provided to CNBC.

‘As supply goes up, we tend to see more incentives’

In 2023, low inventory in a high-demand market left little 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 goes up, we tend to see more incentives being thrown on the hoods,” said Waatti.

Car shoppers could see more models with lower sticker prices before discounts, too. As supply chains continue to normalize, “we’re going to start to see automakers build more lower-end models, which are more affordable, and that should help bring that average monthly payment down,” he said.

Electric vehicle shoppers may see more deals

Most of the consumers who bought a new EV in the last year are still considered “early adopters,” or buyers who like to have the latest technology and are not as price sensitive, said Waatti.

“We’ve pretty much run through all of the early adopters at this point. Now we’re seeing the natural demand for EVs to show up and it’s not as robust, posing a slight decline in sales,” he said.

Some automakers are recalibrating their production in response to that lower demand. For instance, Ford Motor plans to cut production of the F-150 Lightening by half in 2024: “That’s a very high number,” said Drury.

Similarly, General Motors says they’re pushing out the launch of the all-electric Chevrolet Silverado for another year, said Drury.

“These vehicles we had very high hopes for, a lot of anticipation…they’re getting unfulfilled,” he said.

While market growth is expected to continue, it’s not going to be at the same rate like the past 12 to 18 months, said Waatti.

After two to three years of “full steam ahead,” electric cars are now “sitting on dealer’s lots collecting dust,” said Drury: “We don’t have the enthusiasm we used to.”

As manufacturers and dealers look to clear out those vehicles, shoppers might come across more plentiful incentives next year as well as less expensive new models.

2 things to consider when car shopping in 2024

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 making a comeback: While incentives such as rebates and discounts slightly declined in October, they rebounded to the highest point of the year in November, according to Cox Automotive.

More incentives are likely to appear as more cars become available on the lot, said Drury. If you need a new car, “look for those incentives, they do exist,” he said.

Added Waatti: “Consumers should expect increased rebates, subsidized leases, low-interest loans and other incentives to continue rising into 2024 as inventories grow.”

2. Make the most of your trade-in: Limited supply of new and affordable cars in the past years pushed buyers into the used market. As demand for used cars increased, so did the prices, said Waatti. However, used car values are coming down, meaning trade-in values are weakening as well.

“We’re not defying market norms anymore, your value is not going to be going up anytime soon,” said Drury.

Get an estimate of the trade-in value from a dealer and consider selling the car yourself if you want to maximize the value of the car, said Waatti.

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