SALT LAKE CITY — As a consumer journalist and as a guy who’s getting a little tired of driving a 10-year-old van, I pay a lot of attention to car prices. These prices have been a bit all over the place lately. Used car prices continue to rise, while new car prices are falling.
“This is the first time in 20 months that the average new car price is below sticker price, so less than MSRP,” said Kelley Blue Book’s Brian Moody. “With new car prices coming down slightly, you may find that a lightly used car is about the same price as a new car in some cases.”
So why this price juxtaposition between used and new cars? The answer, Moody says, is inventory.
“There is a demand for used cars,” he said. “Remember, a couple of years ago, when we were talking about the lack of new cars, well, that’s going to translate into a lack of used cars because the cars that were new become used cars.”
The average price buyers pay for a new car is now $48,275, according to data from Kelley Blue Book. Sure, it may seem crazy expensive, but dig a little deeper than just the average price and you’ll find an important nuance. This number is skewed because more people are buying expensive luxury cars than ever before.
“That makes the prices look a little bit higher than they are,” Moody said. “That doesn’t mean you can’t get a great deal. There are certain brands you can go to and say, ‘Hey, I just want a nice cheap car,’ and they’ll give it to you.”
Another way to find a better deal is to not look for the types of cars that everyone else is looking for.
“Certain terrain, certain regions — Utah is certainly one of them — reward people with four-wheel drive or big trucks. That might be a necessity for you,” Moody said. “But if you’re not looking for full-size SUVs and trucks, this is the best way to get a deal. Look for a sedan or a hatchback or even a hybrid.”
And don’t just look at the price, Moody says, think about the whole experience.
“The depreciation. The interest you are paying on the loan. How long have you been borrowing this money.”
But if you’re one of those who’s been holding off on buying a new car while you wait for prices to drop, Moody’s advice is to wait a little longer.
“Because there is a downward trend,” he said. “We believe this downward trend will continue, so it would be wise to wait another month or two.
That doesn’t mean you have to stop any legwork.
“Do your research. Now take some test drives and find out what’s in your price range. If you just do that, and then you take a second, you might end up getting a better deal,” Moody explained. “Get all your ducks in a row. Figure out what your down payment is. Figure out what car you need. And then when it’s time to actually buy … then you might be in a better position.”
New analysis finds Americans are hanging on to their cars longer. The average age of a car on the road right now is 12.5 years. This sets a record.
