2024 Poised to Be the Best Year for Auto Purchases Since Pandemic
As the New Year unfolds, 2024 is shaping up to be a beacon of hope for prospective car buyers. Jonathan Smoke, Chief Economist at Cox Automotive, has forecasted that this year could be the most favorable for purchasing a new vehicle since the pre-pandemic era. This optimism stems from a combination of increasing vehicle supply, reducing transaction prices, expected deals from automakers, and a potential ease in interest rates.
“With supply normalizing and the economy stabilizing to hit a soft landing and not turn into a recession, it leads to an environment that is the most normal we’ve encountered since 2019,” Smoke explained in a recent interview with the Detroit Free Press. “For consumers looking to buy a vehicle, it’s the best year by far since 2019.” This outlook is particularly noteworthy given the tumultuous market conditions experienced in the wake of COVID-19.
Recent trends in the auto industry have painted a challenging picture for buyers. In 2021 and most of 2022, new-vehicle supply plummeted to historic lows due to parts shortages, pushing transaction prices upward. This trend led to many dealers selling vehicles above the sticker price. However, this year marked a turnaround with an improvement in supply, albeit with average transaction prices still remaining high. As of November, the U.S. new-vehicle average transaction price was $48,247, a slight decrease compared to the same period in 2022, as reported by Kelley Blue Book.
Despite this, the used vehicle market continues to face inventory constraints. The average listing price for used vehicles at the beginning of December stood at $26,091, a drop from around $27,000 in December last year, based on Cox Automotive data.