Car Market Forecast: Will Car Prices Drop In 2024?
In 2023, car prices were expected to decline by about 2.5% to 5% for new cars and approximately 10% for used cars. It’s also good news. However, if you expect this trend to continue in 2024, so be considered! So will car prices drop in 2024? Let’s find with us:
Some Highlights About The Car Market In 2023
Before we get into 2024, we want to recap quickly what happened in the car market in the first of 2023 (because now 2023 is not ending yet). Although car prices in 2023 were forecasted to have a downward trend. However, it can be seen that the car market at the beginning of 2023 in the world is witnessing mixed developments with the opposite increase and decrease in car prices between models from many automakers.
While the car price of many segments declines when racing models drop in price, there are many models that also increase in price by a big amount. In the first of 2023, the average car price actually dropped a little, however, it still is considered a high level, and the average car price is over $48000. But it’s also a good sign that the relentless upward trend will gradually fade away in 2023.
Car experts believe that the downward trend in car prices will be obvious by the end of 2023. In a recent report by UBS, global auto production in 2023 may have a surplus of 5 million vehicles and of course, they will need to be discounted to sell out and the discount campaign will take place at the end of 2023. The downtrend doesn’t just happen with the new auto market. If you regularly monitor the flex in the auto market, you will find that for the first time in many months of 2023, used car prices started to decline in May as used car inventories were growing. So for the second half year of 2023, the used car prices trend will decrease slightly.
We believe you can partly guess why car prices are on a downward trend in 2023. The global pandemic is gradually being overcome along with an increase in the supply of vehicles. As a result, consumers will have more choices so lower prices will be inevitable.
Will Car Prices Drop In 2024?
A question arises whether this trend will continue in 2024. Will car prices tend to come down in 2024 as in 2023? After looking at all the data and seeing the current trends that are going on in the market. We have to say “No”. Many experts estimate that new car production may become scarcer in 2024 than in 2023. So based on the law of supply and demand, we can infer that when supply is less than demand, the price will increase. So there is a high possibility that the car price will be a little bit expensive compared to 2023.
Alternatively, according to the analysis from AlixPartners, semiconductor shortages will continue to negatively impact auto manufacturing over the next few years. The result is that the production cost will increase which causes the car prices to go up. Also in this report, we learn that the auto industry is entering the transition from internal combustion engine vehicles (ICE) to battery-powered vehicles (BEV) amid the global pandemic, the high material cost, and the limit of the supply. All of these reasons can contribute to the rising car prices in 2024.
When Will Car Market Stabilize?
We’re sure that in recent past years, car buyers have encountered skyrocketing prices due to the constrained inventory and the high demand. So the question: When will car prices return to normal? It’s hard to have the exact answer to this question. Following many auto experts, prices for both new and used cars will gradually go down in 2023. It may give some relief to the shoppers. However, the price won’t be as low as it was pre-pandemic.
And a good sign is that according to the forecast from the market, starting from 2023, the car price will be more stable due to the cool-off of the pandemic and the supply improvement. So it means that starting in 2023, car prices may be friendlier for the shopper and the buyer will have more choices and best deals when buying a car.
What Is The Best Time To Buy A Car?
If you’re planning to buy a car, and you wanna get the best deal? So what’s the best way to have the best deal on a car that you want? We would argue that one of the important pieces to this puzzle is timing. Although when buying a car you have to choose a lot, in which choosing a good time to buy a car also plays an important part. If you choose the right time to buy a car, you can save from 5% to 15% of the total cost of buying a car, this time you will have a good quality bargain car. So what is a good time?
Usually at the end of each month, every quarter, and the end of the year are the times when sales groups and auto dealers have to race to meet sales targets. Therefore, the end of the month and the quarter is considered the cheapest time to buy a car. When buying a car now, negotiating the price will be easier.
Before launching a new version is the right time to buy a car to get the cheapest price. Therefore, if you already like a certain car model but don’t know when to buy a cheap car, wait until the car is about to launch a new version such as a mid-life upgrade. Because at this time, the car company will often simultaneously apply a strong discount promotion to “discharge” all old inventory. Therefore, buyers can buy a car for a few tens of millions of dong cheaper. However, if you choose the time to buy this car, the buyer must accept buying an old model instead of a new model with new equipment.