Buyers still have to be patient before they purchase a Car - Even used๐โ๏ธ๐
When is the next time a buyer can hit the Car Market๐ฒ
It is getting easier to buy a new car, but also more tempting to wait for discounts. The car market has seen significant changes over the years, with new technologies and shifting consumer preferences shaping the industry. In recent years, the market has been dominated by SUVs and pickup trucks, but electric vehicles (EVs) are increasingly gaining popularity.
Vehicle transaction prices โ the price you actually end up paying after any dealer discounts or markups โ have been climbing higher and faster since 2020 than any other point in more than 35 years, according to recent data from the Bureau of Labor Statistics.
The consumer price indexes for both new and used cars โ the average changes in vehicle transaction price over time โ are much higher than they were four years ago in 2019.
BLS data shows inflation for used cars has been cooling down just as dramatically since December 2022 as it increased in the months before that. But used cars have a long way to go before approaching 2019 sales prices and new car prices have yet to slow down.
The average transaction price of a new car has jumped nearly $12,000 in the past five years, according to data from auto website Edmunds.com. For used cars, the average transaction price is still nearly $9,000 higher than it was in February 2018.
Car buyers havenโt seen price hikes like these since the 1970s and 80s. What makes the 2020s unique is how much car prices rose in a short period of time. Over the used car marketโs worst 12 months of the pandemic, the index rose 45%. Thereโs never been a 12-month period since the BLS began keeping records in 1947 when used car prices have inflated more.
Recent trends in prices have been similar across regions of the United States, though in some areas, the starting prices may be higher than others. Preferences for more expensive vehicles in some areas drive these regional differences, Drury said.
Thereโs a large market for pickup trucks and SUVs in the south, he said, where BLS data shows new car transaction prices have risen the most since 1987.
The average price of a large pickup truck nationwide was $62,430 in 2022, according to Edmunds.com. The average midsize car price was only $31,381.
The car market is undergoing significant changes, and the future is uncertain. While SUVs and pickup trucks continue to dominate the market, EVs are gaining momentum, and autonomous vehicles are on the horizon. The future of the car market will be shaped by a variety of factors, including government policies, technological advancements, and consumer preferences. As the market continues to evolve, automakers will need to adapt and innovate to stay competitive and meet the changing needs of consumers.