Jonathan and Nicole Helali have put off buying a new car because of high prices. But with a baby due in a few weeks, they’re hitting the local car dealerships and hoping for a good deal.
“I feel like the ball is more in our court now compared to a few months ago when it was more in their court,” says Jonathan.
He is right. Up to a point.
During the pandemic, chip shortages and inventory problems sent prices of new and used vehicles soaring. That is finally changing.
“For most of last year, almost everyone was paying above MSRP,” says Ivan Drury, chief information officer at Edmund’s. “The last two months of 2022, we saw consumers finally start to break through and get the MSRP deal they’re used to.”
But we are not out of the woods. Used vehicle prices rose 2.5% in January from the previous month, the biggest monthly increase since 2021. And borrowing costs are at their highest level in years thanks to a series of interest rate hikes.
“If you’re a consumer and you’re thinking, oh, I’m going to do some movement and business, I’m going to put them way below the sticker, that’s probably not going to be the case,” says Matt Degan. , senior editor at Kelley Blue Book.
The general rule is to always do your homework before buying a vehicle. This is even more important at a time when the market continues to move. It starts with financing.
“Remember you’re not just looking for the best deal on a car,” says Degan. “You’re looking for the best loan deal. So you know, go to your bank, go to your credit union, see what they can do, get pre-approved.”
The average price of a new car is $50,000. That’s a big change – up 30% from 2019. Certified pre-owned cars can be a smart compromise between new and used.
Many Californians like the hassle-free convenience of renting. But the shortage of new cars in recent years has reduced availability.
“You’re starting to see some rental deals resurfacing, especially in the Los Angeles region, especially when it comes to luxury vehicles,” says Drury. “But they’re not as common as they used to be.”
Electric or gas is a question every home buyer asks. By 2035, new vehicles sold in California must be electric. Therefore, we are in a transition phase that is starting to see the prices of electric vehicles gradually drop and new models appear.
But don’t be in a hurry. Every expert I spoke to said the auto market will remain tight for at least another year. So if you don’t need new wheels right now, like the Helalis, you might just want to wait.
