It's Finally a Buyer's Market for New Cars
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New car buyers finally have the upper hand over sellers as prices fall farther below MSRP. According to a Kelley Blue Book report, vehicle prices just had the largest yearly decline ever.
New car prices, which almost always increase from year to year, are down 2.4% in the last 12 months. The average price of a new vehicle was $48,759 in December, which is a decrease from $49,939 at the end of 2022.
Brian Moody, executive editor at Kelley Blue Book, says there’s potential for U.S. car prices to fall even more in 2024 as vehicle inventory bounces back, forcing dealers to reduce their margins. The recent trends mean that car buyers can negotiate for discounts again, whereas vehicles often sold above the sticker price in 2022.
Bear in mind that car prices may not seem cheap if you haven't shopped for one in a while: The average new car costs nearly $10,000 more than it did in December 2019. But Moody says inflation over that period isn't quite that bad when you consider that luxury cars now make up about 20% of the market, up from around 10% to 12% before the pandemic.
The average price of a non-luxury brand car is now $45,283 — a little more reasonable. And transaction prices for non-luxury brands including Nissan (-4.7%), Subaru (-4.1%) and Ford (-2.5%) are down multiple percentage points in the last year.
