Car Prices Are Crashing, So When Should You Buy?
Things have not been easy in the car market.
Not for the sellers or the buyers.
After the government shut down the economy during covid, the U.S. Car market came to a grinding halt and has been trying to recover ever since.
You've seen the empty new car lots and the overpriced used car lots.
So when do we get back to "normal?"
WAIT... It's coming.
Analysts are predicting that an oversupply of both new and used vehicles will lead to a price war.
New cars from as far back as 2020 have been sitting, waiting to go to market. Those vehicles will be arriving, soon, and filling up the lots.
The used car market is now full.
Cox Automotive, released on Friday, April 7, showed that wholesale used-vehicle prices in March fell 2.4% from a year earlier, although they did tick up 1.5% from the previous month.
Kelley Blue Book saw new vehicle prices drop for three straight months.
Price cuts might not happen until near the end of 2023. So don't expect to see big drops this summer.
“Given the bullish production schedules, we see high risk of overproduction and growing pricing pressure as a result,” UBS said in a note to clients. “The price war has already started unfolding in the EV space, and we expect it to spread into the combustion engine segment [during the second half of 2023].”
As for the EV market, that's not doing so well.
The auto industry is beginning to crank out more electric vehicles but there are not many buyers.
It's a "Field of Dreams" moment for automakers making big bets on electrification — they've built the cars, and now they're waiting for buyers to come, says Jonathan Gregory, senior manager of economic and industry insights at Cox Automotive.
But those EV buys never seem to come.
So when it comes to buying your next car, wait for it, move when the lots are full and those dealers are desperate to move some inventory.