For most of us, car shopping is as inevitable (and sometimes as unenjoyable) as death and taxes, especially after years of skyrocketing prices.
According to the Private Enterprise Research Center, new car prices increased 11.7 percent between 2020 and 2024, and used car prices shot up by an eye-watering 37.2 percent. But with inventory inching back up toward pre-pandemic levels, car dealerships are more motivated to sell and car buyers might regain the upper hand — if they're patient.
According to Money magazine, the average new car price is about $48,400, down from its peak of $50,000 in late 2022. Even after the slight decline, prices remain about 20 percent higher than 2020 levels. Auto loans are more expensive too, and the Federal Reserve is in no rush to ease interest rates.
Automakers and dealers may offer attractive incentives to entice buyers into driving home with a new car today, but Kelley Blue Book advises consumers to keep their wallets closed until autumn (or later). Car prices will likely continue to fall, and a predicted interest rate cut later in the year will further reduce costs for the majority of car buyers who finance their purchases.
But if you're hoping to find a brand new car at a more affordable price, you'll have to wait much longer. Automakers produce about 80 percent fewer inexpensive vehicles than they did just five years ago. Dealers are clamoring for more budget-friendly cars, but those changes will take time.
