Will car prices decline in 2023?!‎

Car buyers have faced soaring prices for more than a year, in part due to high demand and tight inventory. But 2023 may finally bring some prosperity. As demand stabilizes and inventory improves, prices are expected to decline. According to a report issued in November by JPMorgan Bank, he indicated the possibility of a price drop of up to 5% for new cars and from 10% to 20% for used cars.

Expected drop:

Consumer research firm JD Power said new car prices will drop between 2% and 10% next year, according to Tyson Gumini, vice president of data and analytics at JD Power. “As inventory increases, we expect to see prices come down for consumers, so that’s mostly good news,” he said, adding that buyers can expect supply to increase.

Used car prices have eased after rising in 2021, with a recent decline of more than 3%, according to data from the US Bureau of Labor Statistics. A used car sold for an average of $27,156 last month, down 1.5% from October, according to Kelly’s Blue Book.

Meanwhile, new car prices remain historically high. The average transaction price reached a record high of $47,681 in November, according to auto pricing website Edmunds. But it was also the first time since July 2021 that the average price paid fell below the manufacturer’s suggested average retail price. When this happens, it indicates that some buyers are able to negotiate a lower price for the vehicles. However, higher interest rates could offset the decline in auto prices, which means that Americans who finance their cars may not see much, if any, downturn in prices.

High cost:

The report asked about the reasons for the huge rise in car prices? New-car prices have soared due to increased raw material costs and a shortage of chips for the computers that control the car’s accelerator, transmission and touchscreen. The rise in new car prices has increased demand for less expensive used cars, according to JPMorgan. “We estimate that half of the increase in new car prices relates to higher input costs, including raw material costs,” Ryan Brinkman, auto equity research analyst at JPMorgan, said in the report.

According to USA Today, prices of traditionally cheaper options such as small and medium-sized cars have increased this year amid consumer demand for more affordable cars, according to Edmunds data. Consumer Reports automotive reporter Benjamin Preston said factors such as the war in Ukraine, which has exacerbated supply chain disruptions, and chip shortages will ultimately determine how much prices will fall.

What is the best month to buy a car? The last months of the year — October, November and December — typically see heavier discounts on cars, and deals on new cars usually coincide with the introduction of new models, according to Edmonds, making existing cars and trucks less desirable. December usually has the best deals, with the biggest discounts available on New Year’s Eve, according to CARFAX. But there are other good times to buy a car

Best time to buy:

The end of the month and the end of the year are usually typical times, and weekends are also good times to score a deal on a new car. If buyers can wait, Jomini said, they can expect to see lower prices next year than they are today. But shoppers don’t necessarily have to wait to get a favorable price because many automakers are starting to offer incentives. Preston said Consumer Reports advises consumers to buy a car when they need it. “If you need a car now, you should get a car now,” Preston said. “You can certainly help yourself by doing a lot of research and knowing what you want and need. Then search for alternatives

How can I get the best car deal? The lack of chips and record prices have changed the paradigm to buy cars in 2022, but buyers still have time to strike a good deal. Experts said shoppers should be flexible when looking for a car. Buyers must also negotiate the price, using the quoted price as a starting point.