And if you can keep holding out, you could reap big savings.
After about three years of craziness, the car market seems headed back to normal. That means not only are used vehicle prices on their way down, so are new car prices. According to data from Kelley Blue Book, the average price American consumers paid for a new vehicle during March finally sunk below MSRP, something we hadn’t seen for 20 months previously.
See for yourself how car dealers are hiding new vehicles here.
Before you breathe out a sigh of relief, just know that during March 2023 the average transaction price for a new car was still high at a whopping $48,008 so we’re not completely out the woods, yet. However, the current trend should put us back squarely on the path of pricing sanity hopefully by late this year or early 2024.
What’s interesting about March 2023 new car sales data is the difference between non-luxury and luxury sales prices’ movement. For non-luxury vehicles the average price was $44,182, down $505 versus February 2023. However, the average luxury car sold for $65,202, marking a drop of only $9 versus the previous month. In other words, luxury vehicle prices aren’t dropping nearly as fast as non-luxury options.
One explanation for this divergence is that non-luxury car shoppers often rely heavily on financing for their purchase. According to Cox Automotive, auto credit availability shrunk in March 2023 by 5.5% year over year. That might not sound like much, but for shoppers who find themselves on the bubble for what lenders are looking for in qualifications, it can make a huge difference.
This also means these shoppers looking at non-luxury cars have less wiggle room in pricing. If dealers want to make a sale – and many desperately do as the market continues to slow – they’re willing to budge on the total price of a vehicle. What’s more, shoppers who financed used vehicle purchases found their credit access was overall diminished even more versus those looking at new cars, says Cox. However, concerns about the credit market tightening further as the year progresses are casting a pall on the industry.
With dealers hiding new car stock at secret locations, it might still be difficult to get a truly good deal on certain retailers. But with the weirdness of covid lockdowns and restrictions squarely in the rearview mirror, it looks like the only flow of the car market is down, something which should be music to consumers’ ears.
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