Will Car Prices Be Lower in 2024?

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With the beginning of a new year comes a very important question for those looking to buy their next vehicle — what does the car market look like for 2024?

After looking at statistics from 2023 in addition to 2024’s predicted forecast, the information indicated that 2024 may be a good year to purchase your next car due to the predicted normalcy and stability of the market.

The Market Will Most Likely Stabilize

Due to the 2020 coronavirus pandemic, the automotive market was thrown into disarray. The pandemic led to a disastrous handful of years, with supply chain issues leading to exorbitantly high vehicle prices.

Economy cars were going for well over prices from the year before. Supply was low and the production of many car manufacturers had to be put on hold during the lockdown.

“Shoppers shouldn’t expect much lower prices in 2024, although the market should stabilize,” according to New Orleans City Business. However, the outlet warned that continued lower production may actually keep prices somewhat higher.

Although prices might not be much lower coming into the new year, it is still important to note that potential stability is a positive sign.

Slow Changes Happening in 2024

Big, sweeping changes are not predicted to radically alter the automotive industry in 2024. The vehicle production industry has spent the last handful of years trying to recover from the disastrous impact of the pandemic.

Instead, smaller increases in growth will help maintain the stability of an industry that has been wildly fluctuating for over three years.

“The labor market, which significantly contributes to vehicle sales in the U.S. market, is expected to weaken. However, unemployment will remain low enough to support a healthy auto industry,” Motor.com detailed, citing Cox Automotive projections.

Many economists are not predicting a recession, though inflation and a stagnant job market are still predicted in the coming year. One positive that 2024 will bring is lower loan rates.

“Although the possibility of higher loan rates is still on the table, the expectation is for rates to come down from record highs in the year ahead,” the Cox Automotive report suggested.

This lowering of rates is beneficial for families and individuals who are having difficulties make ends meet. A decline in interest rates will help reduce monthly expenses for those still recovering from the hardships brought on by the COVID-19 pandemic.

“Though the downward trend likely won’t be significant, any decline will help improve vehicle affordability and relieve many households struggling financially,” the Cox Automotive report outlined.

The Eventual Dominance of Electric Vehicles?

Things are looking better and better for electric vehicles. From 2022 and 2023, there were significant changes in EV pricing, with electric vehicle prices reaching an all-time low.

“Electric vehicles showed the most significant price drop [in 2023]. The July average was $53,469, which is nearly 18% lower than the July 2022 price,” New Orleans City Business reported.

It is predicted for EV prices to remain low. Because the American government has been impactful in incentivizing buyers to purchase EVs, it is believed there will be many more electric vehicles on the road come the end of 2024.

“With more electric vehicle models available, more incentives, more discounts, more advertising, and greater sales efforts, [it is expected that] electric vehicle sales in the U.S. will exceed the 1-million-unit record set in 2023,” Cox Automotive’s report indicated.

Electric vehicles, including hybrids, will make up around 24% of the market in 2024. Solely electrically powered EVs are expected to make up around 10% of the market. In fact, 2024 is slated to be a year of emergence and continued popularity for electric vehicles.

A Stable Market Is Beneficial to Buyers

Though stability in a market may not seem like an excessively impressive notion to some observers, having the auto market return back to a state of normalcy will be refreshing for consumers.

“Satisfaction with the car buying process is expected to improve in the year ahead, thanks in part to better inventory and the return of discounting,” Cox Automotive’s report projected.

Now that many issues with the supply chain have been remedied — with vehicles easily accessible in 2024, the process of purchasing a car is expected to be streamlined. Customer satisfaction will improve, and positive conversations regarding vehicle ownership are more likely to take place.

“Sales growth will be weak and constrained in 2024, which is a more normal state compared to the chaos of the past four years,” per Cox Automotive.

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