Are you thinking about buying a vehicle soon? Are you unsure of what to expect, given the recent price craziness? If so, you’re not alone. Car prices have been all over the place the last couple of years, with used car prices seeing unprecedented spikes in 2020-2022.
Many people wonder if they should wait things out in the event car prices drop. Read this auto industry news guide to learn what buyers can expect from new and used cars.
New or Used?
You’re probably wondering whether it’s a good time to buy a used or new car. Historically, purchasing a used vehicle has always been more economically sound. However, the tide shifted during the COVID-19 pandemic, as used car prices began spiking due to supply and demand.
In most cases, you can purchase a used car at a steep discount, as vehicles typically depreciate 20% in the first year and 10% every year thereafter. However, the pandemic muted depreciation, with used car prices growing faster than new prices. With the price gap between used and new vehicles narrowing, buying a new car has become more appealing, as you can purchase a new vehicle in better condition. Plus, it’ll have a full warranty and can be financed at a lower interest rate.
Getting a good deal is top priority for everyone who is in the market for a new vehicle, so it’s totally within the realm of good ideas to shop at trusted dealerships. It’s also smart to look for certified pre-owned vehicles, as these tend to have lower gas mileage and are thoroughly cleaned, inspected, and repaired before being placed back on the lot.
Certified pre-owned vehicles come with manufacturer-backed warranties on top of what’s left of the original coverage. Some even include additional perks like roadside assistance and trip insurance. While certified pre-owned tend to cost more than regular used vehicles, they give you peace of mind, as you know you’re purchasing a vehicle in good condition.
New vs. Used Car: Pricing
Generally speaking, we should still see an uptick in new car prices, as there is currently a shortage of microchips. Today’s new vehicle contains more than 100 microprocessors. The global supply of microprocessors is short, leading to an increase in demand and, therefore, an increase in new vehicle pricing. Waiting for the supply to catch up with the demand may be wise if you have your heart set on buying a new vehicle.
The news is slightly better for those looking to buy a used car. Used car inventory has begun to stabilize after months of being in short supply. While prices haven’t quite returned to normal, you should soon see dealerships offering better prices on used cars.
Is Leasing a Good Option?
Those struggling to commit to purchasing a vehicle may turn to leasing as the next best option. Leasing has become less popular recently due to low inventories.
If you have a vehicle lease ending soon, be prepared for fewer leasing options in the future. You may need to do some extra planning and research to find your next best option. You may also want to consider buying out your lease, as you might still get a relatively good deal considering the selling price was calculated years before the car market took a turn.
New and Used Car Updates: Taking the Next Step
Now that you’ve read these new and used car updates, it’s time to take the next step. Whether you’re considering buying new, used, or leasing, it’s always wise to shop around and not jump into a sale too quickly. One of the most important aspects of your research is the test drive.
Click here to learn what to look for when taking your new car for a test drive.
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