Many people are wondering what the new year will bring in regards to the new and used car market prices. Will we see a repeat of 2021? Most likely yes. Key indicators point towards prices remaining high. New car shortages will not get better for 1 to 1 ½ years, because there is still a semiconductor chip shortage which has slowed manufacturing for everyone besides Toyota, who had a large inventory prior to the shortage. Covid has essentially caused a shortage of approximately 4 million new cars, which equates to a similar used car shortage. These factors have caused a 20% to 40% market value increase on used cars, and new cars are selling on average $5,000 above MSRP (manufacturer suggested retail price). New car dealers are making more money on each car sold than they ever have before. It’s simply supply and demand, and prices will remain inflated until manufacturing catches up.
Inflation is at a 40 year high and loan interest rates are more than likely going up this year as well. The facts are, buying a new or used automobile at this time is not a good idea, but very often necessary as cars reach their life span or are lost in accidents. Having the knowledge to get the best possible deal is essential. Let us help you make a wise purchase. We look forward to hearing from you, and best of luck in the new year.
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