The calendar has flipped to 2024, but car buyers are still faced with many of the same challenges as the last few years. The primary choice has always been between used cars and new ones, but there are new obstacles to navigate when choosing between the two. Let’s take a closer look at what’s best right now.
New vs. Used Cars: Key Facts To Understand
In 2024, most buyers would be better off looking at new cars due to plentiful incentives and lower financing costs. Prices for used cars are on a downward trend, but they’re still much higher than they used to be, and that’s not likely to change anytime soon.
New cars have a higher initial cost, but there are a lot of incentives available, including low APR offers and manufacturer discounts. However, just like in the past, the choice between new and used cars depends on your financial situation and how long you plan to own your car. If you’re looking for a car that you can own for a while, a new car is probably the better choice.
On the other hand, a lightly used car might serve you just as well in this situation. What’s difficult is finding a used car to fill a temporary need. Gone are the days when there were plentiful budget vehicles on the used market.
Buying New Cars in 2024
One thing that has changed in 2024 is the prices of used cars on the wholesale market. Prices are going down, which means trade-in values are also going down. The last few years of buying a new car and flipping it for profit on the used market have come to an end. Now, we’re back to the traditional situation where a new car loses a large chunk of value as soon as it’s driven off the lot.
The other factor is interest rates. Low APR offers on new cars are here to stay for this year at least. Manufacturers are also offering incentives to clear inventory. There are even zero percent financing deals out there. The interest rates are stable, but loan costs remain high. Because of this, a large amount of new car loans are going through captive lenders like Ford Credit and Toyota Financial.
Fair prices are also back for new cars. This is a buyer’s market, which means you should not pay any markups this year. The prices for 2024 models have increased, but that’s not expected to stay when the 2025 models drop.
Buying Used Cars in 2024
It may not feel like it, but prices for used cars are going down. The wholesale markets have gone down significantly, but that drop hasn’t impacted retail prices in a big way yet. Why are prices still high? Roughly 16 million vehicles were never produced in 2020. That’s a huge number of missing vehicles and it continues to impact the market.
The global shortage of used cars is expected to continue into the latter half of the decade. Normal numbers of used cars may not be reached again until 2030. This means that prices remain high even as they continue to decline. One of the biggest issues is inflated interest rates for used cars. These high rates don’t come with the same incentives offered on new cars, which is why many buyers are turning in that direction.
Deciding whether to buy used or new in 2024 still depends on the buyer. Prices are higher initially for a new car, but financing is better. You might find a good price on a used car, but if you need to finance it, the incentives aren’t there.
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