Just last year, the average price of a new car was coming close to $50,000 after a meteoric rise over the past few years. Yes, you read that correctly. Forecasts for 2024 showed prices stabilizing rather than increasing or decreasing. Well, all that has rapidly changed. The average new vehicle transaction price fell precipitously to $44,045, down from $48,759 in December of last year. The $4,714 average drop is driving sales up tremendously.
Okay, so that price is still significantly more than many buyers want to pay, but let's face reality. Nothing is cheap these days, except for maybe a $.99 bottle of mustard at Target. But good news is relative these days, and we'll take what we can get. The interruptions and delays experienced in the supply chain are not nearly as bad as they once were, and inventories are on the rise so the scarcity isn't driving prices up like the past few years.
So, should you buy right now? We don't expect prices to continue to drop, so this might be as good as it gets. Another reason to buy right now is the fact that manufacturers are pumping up incentives, and loan payments are also dropping to an average of $722 per month. That still seems insanely high to us (half a mortgage?), but it's certainly better than the average of $770 in December of last year.
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It's not good news across the board, of course, because dealers are still marking up high-demand vehicles such as the Jeep Wrangler, Genesis GV70, and the Cadillac CT4-V. Buyers should look for vehicles that are not quite as in demand and check them against the list of cars already marked down quite a bit. You might be able to negotiate an even lower price for vehicles that have been sitting on dealer lots for quite a while. There are a handful of vehicles that are in shockingly low demand, giving you an edge when you shop.
J.D. Power also showed that the average price of used cars has also dropped by $700 to $28,121. That's good news for buyers but not so good for sellers who aren't making nearly as much when they part ways with their vehicles. The average trade-in value dropped by almost a thousand dollars to an average of $7,912. All that said, you still need to be savvy shopper and don't just buy the first thing you see.
