When you’re buying a new car, there are a lot of factors to consider, like the availability of used cars, the price of new cars, and the impact of a Pandemic.
If you’re looking for the perfect car, remember to consider your budget as well, because a three-row SUV may not be what you need. Here are some ways to plan ahead for the car market in 2022.
Price of New Cars
Prices for new cars are on the rise, but a global computer chip shortage is making it harder to supply the market with new models. Dealerships across the country have a shortage of new cars and many buyers have placed orders for them before they arrive on dealer lots. Talk to an expert from cash for junk cars west palm for more valuable details.
This increase in demand is making buying a new car even tougher, so wait until 2022 to buy one. That way, you won’t have to spend as much money on the car. Consumer inflation has reached a record high of 7% last year, the highest rise in 40 years.
Used car prices have shot up 37% in a year. Today’s average used car costs $29,000. With limited inventory, dealership markups, and little to no discount opportunities, car buyers will have to be quick to find a good deal.
This could mean a steep price increase for cars. But don’t panic just yet. Here are some tips to keep in mind when shopping for a new car.
Availability of Used Cars
The chip shortage is not going away anytime soon, but the low inventory climate is going to improve over the next year. Used car inventory is near its high for the year. According to ZeroSum Market First Report, inventory rose more than 6% in December and January of 2022.
But used vehicle inventory remains down 3.5% year-over-year. In addition, the number of vehicles returned by leaseholders will decrease. This is a good sign for consumers, as it will mean less competition on used car lots.
The inventory shortage in 2021 is still affecting used car sales. At the end of January 2022, there were 58 days of used retail vehicles available, a three-year supply adjusted for inflation. But the number of used cars on the market had dropped by mid-February, to 55 days.
This is a decrease compared to the 48-day supply in February 2021. That’s a good sign for used car buyers, but it also signals a declining market for used cars in 2022.
Cost of Used Cars
The cost of used cars isn’t expected to fall to the levels of 2019 until 2022, says Jonathan Smoke, chief economist at Cox Automotive. This is good news for those who are waiting for used car prices to fall. The bad news is that new cars won’t be any cheaper until 2023 or 2024.
Whether used cars will fall to these levels is an open question. However, the price of used cars will probably fall if the current trend continues. Consumer inflation will be high in 2022.
According to the U.S. Bureau of Labor Statistics, the average transaction price of new cars will be nearly $47,000. This will likely continue through 2023. Consumers should consider purchasing a used car in a state or region where the used car market is low.
Otherwise, their new cars will cost them twice as much. However, this may still be a good deal for consumers.
Buying a Hybrid or EV
High gas prices are driving the demand for fuel-efficient cars. While sticker prices have been increasing steadily in recent years, consumers are becoming more willing to make the switch to hybrids and electric vehicles.
Some buyers are deterred by high sticker prices and limited selection. However, many consumers are motivated by the benefits of fuel-efficient vehicles. Gasoline prices have reached over $4 per gallon and many drivers are looking to purchase a car that doesn’t use gasoline. In fact, nearly three-quarters of all new vehicles were gas-guzzling vehicles.
Compared to petrol and diesel cars, electric vehicles’ running costs are lower than their petrol and diesel counterparts. While EVs may still have higher upfront costs, they will save drivers money on their VED road tax bill.
Additionally, EVs qualify for a benefit-in-kind tax. Range anxiety is still a barrier for many motorists, but the actual range of electric vehicles has grown considerably.