What to make of this current car market? That’s the question on everyone’s mind right now. Should I buy a car right now?
The answer is, of course, yes – but it’s complicated.
“Is it going to get better? That is really hard to say,” said Michelle Krebs, an executive analyst for Cox Automotive, which owns vehicle-information websites like Kelley Blue Book and Autotrader, “because, are we going to have a recession, or are we not?”
However, what has dealerships and customers – yes you – optimistic heading into 2023 is that the odds of a recession hitting are going down. Inflation is decreasing, the FED is cutting interest rates, and car dealerships are struggling to keep inventory off the lot, causing car prices to drop like a rock.
Plus, with lower rates and refinancing options, the car market is ripe for buyers looking to upgrade.
It’s still a complicated market out there – so, here’s what to look for:
Should I buy a car right now?
According to Cox Automotive, car supplies across dealerships are up 72% since Jan. 1. There are now 620,000 more new vehicles on lots than at the same time last year.
Due to supply chain issues – that are on the tail-end of being fixed – dealers have an abundance of vehicles.
WE ARE SITTING ON SUPPLY.
That means there’s plenty to choose from, and you may be able to get a great deal on your new wheels.
Moreover, domestic brands like Ford and GM are nearing record inventory.
Automotive News reported last week that Ford dealers are at 60 days supply, GM at 52 days, and Stellantis (the merger of Fiat Chrysler and the French PSA Group) at 68 days. We here at Queens Auto Mall sell all these automakers.
Good News, and Bad News
Did you hear the good news?
We might miss a recession here in the US.
Or, it might just be a mild one like a summer breeze.
Either way, the Federal Reserve has begun to discuss slashing interest rates to new lows. This makes it easier to finance or refinance a car. The bad news is these are projected interest rate cuts.
They haven’t happened yet.
But many economists are expecting interest rates to come as early as Spring.
The upshot is that sometime in 2023 the Fed will be forced to lower interest rates, which could help you get a sweet deal on your ride.
The Old Ways Might be Dead
The car market has gone through a complete revolution within the past year, with just 1.4 million vehicles available for sale – down from 3 million before COVID came about!
Automakers have never been so busy and profitable; it might be safe to say that we won’t return to pre-pandemic days anytime soon: We’re entering a “New normal.”
Dealerships are also struggling since they can’t carry as much inventory as they’d like; they used to carry a 90-120 day supply but now only hold 40-50 days’ worth. The upshot is that this is an entirely new economic paradigm, meaning there might not be a better time to buy than now.
What’s Up With Used Vehicles?
The used car market has been a Catch-22 since the pandemic started.
For a while, car experts warned against buying used vehicles because the market was so in-demand and prices were so high.
So, what to make of it?
Data from Cox Automotive says used vehicle inventory at dealerships is close to 2019 levels. Prices are slightly lower than a year ago, with used car prices falling by 1.3% and CPO vehicles dropping by 3.2%. While vehicle demand is still sky-high, prices seem to be stabilizing.
Should I buy a car right now?
If you’re still asking that then rest assured, now is the time to buy if you’re in the market for a new or used car. Prices are declining and dealers’ inventory is finally catching up. Plus, with lower interest rates and refinancing options, it’s an ideal time to upgrade or get a better deal on your ride.
However, it’s important to remember that car-buying is always a complex process. To ensure you get the best deal, make sure to do your research, read reviews, and find out all the facts before signing the dotted line. Good luck!
Happy car-shopping! :)