Recently a friend told me about how difficult it was to find a new car after his insurance company wrote his car off after a recent accident. The insurance company settled the claim and gave him a reasonable amount based on the excellent vehicle condition of his car. However, finding a used car replacement was difficult because similar cars available for sale were not in the same condition as his old car. This forced him to opt for purchasing a new car. Two weeks later he was still having trouble finding the new vehicle he wanted.

So, what’s going on here? Over the past few months new car prices have dropped 1-2% but the supply chain has still not fully recovered from the pandemic disruptions. Used car prices have dropped 8% since last November but are still 20% higher than before the pandemic.

What a predicament!   Here are some tips to consider when looking for a new car:

1. Individual Budget and Needs: Can you afford the current market price for a used car that meets your needs?
2. Inventory and Negotiation: Research what’s available in your area and try to negotiate with sellers, especially for slightly older models.
3. Interest Rates: High interest rates can significantly impact your monthly payments. Consider shopping around for the best financing options.
4. Future Price Trends: Prices may continue to drop in the coming months, but it’s impossible to predict with certainty.
5. Check with a service writer or technician to get their opinion on the best car to purchase. We know your driving habits and service record, so we are uniquely suited to providing you with some solid shopping advice.

Overall, while there are signs of a softening market. It is still a buyer’s market for used cars compared to the peak prices of 2022. However, cautious optimism and careful planning are crucial before making a purchase.