Times are changing and car prices are soaring. So many factors play into why car prices deflate or inflate. Will car prices drop in 2023? With the way things are looking that is a “hard” no. There is no way around it. With financing rates going up, shortage of cars, electric cars becoming more popular with the cost of gas, and car parts becoming more to manufacture, there’s not a lot of light at the end of the tunnel. If you already have a dependable vehicle, be sure to maintenance your car on a quarterly basis to prolong the life of the vehicle. There’s no need to buy a new one unless you absolutely need to. Call your local auto shop to see what kind of maintenance plans they offer. Look for a used vehicle or shop for closeout prices on older models that have been sitting on the lot for some time. Dealers want to move these cars quick.
Why are prices for cars still rising? Many of the factors listed here are why buying a new or slightly used car will be a hefty loan to bear if you’re not lucky enough to pay cash up front. There are factors that can also steady the inflation to help consumers in their search.
Auto Chips – The brains of the vehicle
Microchips or chips are used in vehicles to control electrical systems—each car contains over 500 of themand that is costly. This may not have a huge impact on the price and may keep prices somewhat steady dueto manufacturers pulling back on chip orders. An over-abundance of cars on the lot is an issue that car dealers don’t want to deal with. They want their top-dollar on newer models and need to move the inventory.
Finance Rates are Rising and Protect Yourself
If you’re planning on financing a car, you’re going to pay more. The prime rate determines the financing rate for your vehicle loan. The prime rate is usually 3% higher than the federal benchmark rate, but that doesn’t mean you’ll get the current prime rate when financing a new or used vehicle. Only the best customers or corporations with high credit scores may be offered the prime rate from a lending institution. Shop around to get the best rate possible before heading to a dealership. Make sure that whatever you buy is still under a warranty if you can help it and don’t ask for all the bells and whistles to keep costs down.
Vehicle Shortage
If you have not noticed in the past couple years, there has been a shortage of used reasonably priced vehicles. Used vehicles are in demand. Because of the high prices on new vehicles, used vehicles are in demand and harder to find which has resulted in a shortage so you may have to be patient in your endeavors to get a new (used) vehicle. As the demand for new and used vehicles will continue to grow in 2023. You might not be able to find exactly what you want in a vehicle. You’ll also be paying top dollar for a used vehicle.
Dealers are getting more than MRSP (Manufacturer's Suggested Retail Price)
Dealerships were charging anywhere from about $700 to over $45,000 more than the sticker. The dealers are who set the selling price. With a high-demand vehicle such as used cars, dealerships can ask for more, knowing eventually someone who really wants that particular vehicle will pay the higher price.
Electric Cars are Growing and being Pushed to Purchase
More people are looking at EVs to save on fuel costs. You will spend about .04 cents per mile vs 18.4 cents per mile with gas. EV requires less maintenance but is also more costly when that maintenance is needed. Some states, such as the green state of California, are trying to fizzle out gas powered cars to make the state an all-electric car state. This has pushed people to buy EVs which are quite costly. With this mindset fewer gas-powered cars will be built. Again, a factor to the shortage of used cars available on the market.
Is Leasing an Option?
If you want to always have a car payment but not be responsible for all the maintenance…the Devil’s in the details. Leasing has its perks but there are also a lot of hidden fees, you never own the car, and you don’t want to be late on your payment. Some dealers will give you the option to buy but be sure to read all the details once that agreement is handed to you before you sign. Lease contracts are very hard to get out of and you will pay more once you go over the contracted mileage. Bottom line be sure to read ALL the details. It may be an option to consider but unless you are someone that pays attention to the details it may end up costing you more.
Whatever you’re driving in 2023…be safe on the road!
If you’re looking for a local family-owned auto body shop in Sandy, Utah or if you're seeking an accurate and honest collision repair estimate visit A.U.T.O. Collision in Sandy, Utah or give us a call at 801.568.0305! Our I-CAR® trained and certified technicians are ready to help our customers in their time of need.
For helpful advice or to learn more about our collision services, contact A.U.T.O. Collision at 801.568.0305 or visit the shop at 215 West 9210 South, Sandy, Utah 84070. We are here to serve you Monday – Friday, 8am – 5:30pm.