Is now the right time to buy a car?
You may be wondering is now the right time to buy a car?
With low inventory, microchip shortages, and soaring interest rates over the past few years, the automotive market has been tumultuous (to say the least!). If you’ve been waiting for the ideal time to get a new vehicle, you may wonder how your prospects look in 2023. Let’s take a look at some considerations that may help drive your decision-making as you set your sights on a set of wheels.
Factors help determine is now the right time to buy a car:
1. New or Used
Are you better off buying a new or used car? That’s the burning question!
Many people like the idea of a brand-new vehicle with the latest comfort and safety features. Oh, and that new car smell! New car prices, which rose in 2022, show signs of stabilizing as the microchip shortage has begun to ease. With more supply to meet the demand for new vehicles, prices may start to fall this year. Also, when buying new, drivers may be eligible for special discounts, financing options, lower interest rates, and warranties. However, even though manufacturers have increased production, inventory remains lower than usual, causing higher-than-pre-pandemic price tags for new cars.
Used cars may not have all the bells and whistles as hot-off-the-press models, but they can save buyers thousands of dollars — even on luxury models.
Moreover, well-maintained used cars hold more of their value (most of the depreciation has occurred already) than new cars, which is a plus if owners want to sell their used vehicles in the future. Note that used car demand has been less than for new vehicles, but some experts predict the tides will turn. So the low used car prices buyers see now, could rise as more people look for a budget-friendly vehicle.
2. Interest Rates
Some financial analysts have predicted interest rates could peak this spring. Those lofty rates can add insult to injury when paired with steep new car price points.
However, experts suggest escalating interest rates could diminish the demand for used vehicles in 2023, driving down used car values. So, if you’re considering purchasing a used vehicle, you might want to consider “springing” into action. If loan interest rates regulate later in the year, demand could escalate, potentially causing used car prices to increase as their availability decreases.
Tip: Make sure you do the math whether buying new or used. A high interest rate could offset any special savings you might be promised on the vehicle’s price.
3. Your Current Vehicle’s Condition
Even if car loan interest rates drop in 2023, they likely won’t return to pre-pandemic levels in the foreseeable future. If your car is nearing the end of its life, buying now may make sense. But if you can avoid taking on new debt by keeping your existing vehicle safely on the road with some repairs and maintenance, that could be the most sensible path forward. Fortunately, you don’t have to do it all on your own!
We’re just a phone call away and ready to help with all your maintenance and repair needs. Schedule and appointment today!