What’s The Car Market Status, and When Will It Stabilize?

Most will have to do the dreaded task of finding and purchasing a vehicle at least a few times. The market fluctuates so much that it will be like starting from scratch each time. It will surprise us sometimes to our benefit, and other times it will not. We are in a time when the market is not in a new buyer’s favor. There is a lot to consider when planning the right time to sell and purchase a vehicle. Getting all the information before making such a necessary purchase is essential. Where is the market? Why is the vehicle market being affected? And lastly, when will it level out? 

Why?

The biggest question is why is did the market jump up so quickly. When we all worried about COVID, everything seemed to become more expensive. And part of that reason is the pandemic’s effects on shipping and production. Because so many of the parts for our vehicles are made overseas, they could not get here. Computer chips took a lot of time for production to get. They are such a tiny piece when taking in the massive size of our vehicles. Without these tiny chips, the car cannot work. So they stopped the production of new vehicles in 2022. The lack of inventory is what is driving the prices up. With so many needing something to drive and options limited, it was bound to cause a supply-and-demand situation. 

Used

The one benefit of this situation is that it increased the value of all the used cars in the driveways. Vehicles that were not thought to help us financially are now an asset. Dealerships offer great deals for those who trade in their used vehicle and buy a newer option. They need these used cars to help increase their inventory. Selling private party is another option that many are taking advantage of. While it is a little more work, it usually ends up in more profit for the seller. And many wanted to avoid doing any deals with the dealerships. 

New

Getting a new vehicle took a lot of work to find. It left many on a waiting list, hoping the parts needed would become available. Along with possibly having to wait, the prices were higher than ever. Finding a deal on the newest models was impossible. It has been a competition just to find one available. Sacrifices are even being made on the part of the buyer. Only some boxes are being checked when trying to find the dream car. Because of the limited inventory, some are taking vehicles that only have some of what they hoped for. 

Fall 2023

As the effects of the pandemic are lessening, inventory is slowly improving. The Wall Street Journal believes those searching for a new car should still wait until Fall 2023. The longer one can hold off purchasing, the better the market will become. As the selection improves, the dealerships will not be able to keep the prices at the level they have them at now. The supply and demand situation we find ourselves in will start to diminish. As the competition declines, the dealership must start making deals again. Those wishing to get the most out of their used vehicles will want to take advantage of the situation now. Once the supply is sufficient and the market stabilizes, the offers will lower. 

2025

Another study from Yahoo believes it will take even longer to see things back to normal. They consider that production will be improving, which will have an effect, but as drastic as is needed. The used car market is what they think needs to recover. Only some people are looking for a brand-new vehicle. Those wanting one are sure to be able to get their hand on the wheel of one sooner rather than later. Those that prefer to get a used vehicle will still have issues. One thing to take into account is those that are leasing right now. Those with leasing agreements signed before the pandemic began, have a great deal in today’s market. And as their leases are ending, more are choosing to buy rather than start a new lease or buy a new vehicle. Leased vehicles not purchased make up a large portion of the used cars dealerships sell. Without this source of inventory, they are reliant on individuals trading in. 

Look into all your option before jumping into the current car market.