LOCAL NEWS

Gephardt Busts Inflation: New car prices ease slightly, so will it pay off to buy now or wait?

May 17, 2023, 11:11 PM | Updated: 11:16 pm

SALT LAKE CITY — As a consumer reporter, and a guy who’s getting a little sick of driving around a 10-year-old minivan, I pay a lot of attention to car prices. Lately, those prices have been a bit all over the place. Used car prices continue to go up, while the prices on new cars are actually getting cheaper.

“This is the first time in 20 months that the average price of a new car is under the sticker price – so less than the MSRP,” Brian Moody of Kelley Blue Book said. “With the prices of new cars coming down slightly, you may find that a lightly used car is about the same price as a new car in some cases.”

So why is there this juxtaposition on prices between used and new cars? The answer, says Moody, is inventory.

“There is demand for used cars,” he said. “Remember, a couple years ago, when we were talking about a lack of new cars, well, that’s going to translate into a lack of used cars because those cars that were new become used cars.”

The average price buyers pay for a new car is now $48,275, according to Kelley Blue Book data. Sure, that may seem crazy expensive but dig a little deeper than just the average price and you will find an important nuance. That number is skewed up because more people are buying expensive luxury cars than ever before.

“That’s making the prices look a little bit higher than they are,” Moody said. “That doesn’t mean that you can’t get a great deal. There are certain brands where you can go and say, ‘Hey, I just want a good inexpensive car’ and they’ll provide that to you.”

Another way to find a better deal, is to not look for the types of cars everybody else is looking for.

“Certain terrains, certain regions – Utah is certainly one of those – they reward people with four-wheel drive or big trucks. That might be a necessity for you,” Moody said. “But if you don’t go looking for full size SUVs and pickups, that’s the best way to get a deal. Look for a sedan or a hatchback or maybe even a hybrid.”

And don’t just look at the price, says Moody, think about the whole experience.

“The depreciation. The interest that you’re paying on the loan. How long you’re borrowing that money for.”

But if you are one of those who have been holding off on buying a new car as you wait for prices to come down, Moody’s advice is to wait a little longer.

“Because there’s a downward trend,” he said. “We think that that downward trend will continue, so it might be wise to wait another month or two.

That doesn’t mean you should hold off on any of the leg work.

“Do your research. Now go on some test drives and find out what’s out there that’s in your price range. If you just do that, and then you hold back for a second, you might end up getting a better deal,” Moody explained. “Get all your ducks in a row. Find out what your downpayment is. Find out what car you need. And then by the time it comes time for you to actually buy…then you might be in a better position.”

A new analysis finds Americans are holding on to their cars longer. The average age of a car on the road right now is 12.5 years. That marks a record.

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Gephardt Busts Inflation: New car prices ease slightly, so will it pay off to buy now or wait?