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Anyone who has recently spent time looking for a new or used car knows that the car-buying market in 2022 is tougher than it used to be. If you’re wondering why used cars are so expensive now, you’re not alone.
Supply chain issues and high demand are driving costs up, and they have been for a while now.
We’ve seen similar increases in grocery prices, the housing market, and gas prices. COVID-related shutdowns, shortages, and delays have made certain purchases both more difficult and more expensive.
According to a recent survey, new vehicles are now selling for an average price of more than $44,000, up $10,000 since the start of the pandemic. And used cars are now averaging $30,000, an all-time high.
This means, for most people, that buying a new car is currently out of the question. And since people who are selling used cars have to spend more to replace them, used cars are suffering from the same inflation.
Now we’re all wondering: will car prices go down in 2022? The last few months have shown some positive progress, but average prices remain elevated compared to pre-pandemic norms. So, until those averages come back down, we have some tips for navigating the 2022 car market.
With inventory low and prices high, dealerships are looking for trade-ins, and they’re paying more for them than they used to. If your old vehicle is still operational, take it to a few local dealers and get trade-in quotes to compare.
While you’re there, ask a sales associate to show you around the used inventory based on your price point. If they give you your trade-in quote on the spot, you’ll know how much you can take off the total before you make any decisions.
If you can’t find a dealership to take your car off your hands or your vehicle isn’t running, scrap it to help pay for something new. Peddle operates across the country, linking up car sellers with dealerships small and large.
They provide instant offers online, handle all communications, and send someone to pick up your vehicle and hand you a check right at home. Once that’s settled, you’ll have a head start on a down payment or used car purchase.
Cars in the range of four to seven years old have seen less of a price hike than newer ones. We recommend checking at least five different sources and making a list of your options. This way, you can compare prices, mileage, and features before making a decision.
Here are a few of the most common places to shop for used vehicles:
With such a tricky market and low inventory to maneuver through, manufacturer incentives to offer good leasing deals are down. And on the buyer’s side, there are fewer cars to choose from, higher fees and interest rates, and fewer discounts and rebates.
If possible, we recommend skipping the lease, at least for now. Your budget would be better served by a financed vehicle if you’ve saved enough for a down payment but not enough to buy a used car flat-out in this inflated market.
If you can wait and save, aim to purchase or finance your next vehicle closer to the end of the year. Prices tend to drop before the new year rolls around, so cars are usually at their cheapest between October and the end of December.
Dealerships have sales quotas to meet before the year ends, so they’ll be more likely to offer deals. And individual sellers often choose this time to sell their vehicle and have extra holiday money, so they may be in a hurry and more willing to negotiate.
When making large purchases, it’s important to be methodical about it. Do your research, check Kelley Blue Book values, and ask the dealer or individual seller about routine maintenance, accidents, part replacements, and past recalls.
If you’re shopping at a dealership, ask about accident reports, discounts for paying in cash, and the average lifespan for the vehicle make and model of your choice. These are some of the best ways to reduce future car-related expenses.