(Commonwealth) _ This last year has not been the finest time to buy a car. New and used automobiles are both more expensive than in previous years, making it harder to get a decent deal. Chip shortages were one of the variables that contributed to rising automobile prices since the epidemic began. As we enter the new year, you may be wondering if you’ll have better luck finding a dependable automobile at a reasonable price. Continue reading to learn whether you should buy a new automobile in 2023.
The typical new automobile sold in November 2022, according to Kelley Blue Book, will cost $48,681. This was $422 more than in October and $2,250 more than a year earlier. Paying over $50,000 for a vehicle would have a major impact on anyone’s personal finances. With these figures in mind, it’s difficult to be positive about the car-buying process in the coming year.
During the early stages of the COVID-19 epidemic, automakers paused manufacturing and cancelled microchip orders. These chips are required in many contemporary vehicles. Sadly, chip output is still below pre-pandemic levels, affecting car inventories and driving up pricing. Vehicle demand was low at the start of the epidemic, but that is no longer the case. Many drivers are eager to replace their present vehicles, thus more individuals are competing for limited inventory. If you’re on a limited budget, competing with a buyer prepared to spend considerably above the manufacturer’s suggested retail price might be difficult, and you may have to wait for a car to become available.
It goes without saying that interest rates are rising. While this is good news for high-yield savings accounts, it is not good news if you need to get a car loan. Mortgage and vehicle loan interest rates are substantially higher than in previous years. If you want to finance a car, keep in mind how increasing interest rates may affect your monthly payment and overall loan cost.
You’re not alone in pondering if 2023 will be a better year to buy a car. We’ll have to wait and see whether prices will fall next year. Yet, based on current automobile pricing data, car costs may remain higher than typical for some time.
If you are considering buying a new car, it might be a good idea to hold off for a few months and monitor the vehicle inventory levels and chip availability as 2023 progresses. The ongoing global semiconductor shortage has caused a significant impact on the production and supply of new vehicles, resulting in limited inventory levels and higher prices for some models. Waiting a bit longer before purchasing a new car may help you avoid these issues and potentially save you some money.
It may also be a good idea to set aside more funds in a savings account to help you better prepare for this potential expenditure. You can monitor auto loan rates to understand what to expect and calculate how rising interest rates will affect your new car payment. Another factor to consider is the rising cost of vehicle insurance. It is a good idea to compare insurance prices before making a purchase so that you can select the best policy to suit your needs and budget. Lastly, choosing the right credit or debit card to use for your purchase can also make a difference in the amount of money you spend. Our experts recommend selecting a card with a 0% initial APR till 2024, a high cash back rate of up to 5%, and no annual fee. This can help you save money in the long run and make your new car purchase more financially manageable.
