in the car market? Drivers beware.
Surges in demand and dwindling supplies have pushed new and used car prices to higher levels than ever before, driving car dealerships to record profits.
According to CoPilot’s Return to Normal Index, new car prices have risen 30% since 2002, while used car prices are 43% above expected normal levels. And with interest rates rising for the fifth time this year, Sticker expects his hair to stand up in shock.
RELATED: Federal Reserve Raises Interest Rates Again. Here’s what this means for your wallet.
what happened? One is the lack of semiconductor chips that control most of the vehicle’s electronic functions. And less chips means less cars.
Second, the auto industry has yet to recover from the pandemic when manufacturers slowed production in anticipation of increased demand, thanks to stimulus measures and people unwilling to use public transport.
CoPilot CEO Pat Ryan said: CoPilot is an app that searches all dealers to find the best car prices.
But with inside information, you can survive these traffic accidents. Ryan offers strategies for 2022 car buyers.
1. be patient
New car price growth in 2022 is slowing, but continues to reach record highs. Dealers are pushing prices up, sometimes putting the MSRP nearly $10,000 above his. However, Ryan believes the situation will improve for him in six to 12 months. “The longer you wait to buy, the more savings you get,” he says. However, this situation will change as inventory increases and dealer lots fill up, but it is now a seller’s market.
2. Look at used cars from 1 to 3 years old
If you absolutely have to buy a car in the next few months, it’s a good idea to keep an eye out for cars on the near-new market.
“In the last 45 days, prices for cars aged 1 to 3 years have fallen about 3.6%,” reports Ryan. Cars from 4 to 7 years ago are slowly returning to normal, albeit barely. It is down 1.5%.
3. Consider SUVs and wagons
CoPilot data shows that some used cars are returning to normal prices. For example, SUV prices fell by 10% for him last month. This is probably because buyers are alienating heavy gas consumers. Wagons and minivans are also slowly returning to normal prices.
But the more expensive vehicles include fuel-efficient compact cars, EVs, and hybrids. Interestingly, according to CoPilot’s Used Car Price Premium Index, used Ram cars are 34% above normal.
4. go home
Indeed, no matter what you buy, the price of the car is absolutely unbeatable. But dig a little deeper into the numbers and you’ll see some interesting disparities. Let’s compare domestic and foreign cars. According to CoPilot, the average domestic used car price in August was $8,301, down 12% from July. On the other hand, used foreign car prices did not fall. They are still 44% above the predicted normal levels.
Certain mass-produced brands such as Ram, Chevrolet, and Ford charge well above normal prices. In Japan, Toyota, Honda, and Subaru are expensive products. You might want to consider less inflated brands such as Pontiac, Saturn, Isuzu and Mitsubishi.
5. Loans from credit unions
With interest rates rising, paying cash for a car is the best course of action. But for most people, that’s not the reality. The next best thing is to secure financing from a credit union that offers low interest rates. Once you know your budget, you can base your funding on how much you can afford to pay each month.
6. Make use of old cars
Remember this is a seller’s market. If you have a car to trade in or sell, you can leverage its value against an increase in the price of your car. You can even use that old car and upgrade it to a more fuel efficient one with modern features.
“It’s like watching a hot housing market,” Ryan says. “If you don’t own a home, it’s hard to get in. But if you own something you’re grateful for and you can let the profits roll over the edge, it’s more affordable.”
This makes navigating the automotive market more comfortable.