If you are in the market for a new vehicle, the second half of 2024 might be an even better time to buy.
According to new data from Cox Automotive, demand for new vehicles could be softer in the second half of the year. Although new car sales are up 0.4% so far in 2024 compared to the first six months of 2023, transactions dropped by 4% between May and June.
One reason new car sales remained strong to start the year was that dealers were offering more incentives. But some buyers seem to be waiting for prices to come down even more.
“Sales have been relatively strong over the last few months thanks in large part to lower prices. Incentives are rising, which are helping vehicle buyers, but only somewhat. The expectation of falling prices coupled with rising uncertainty around interest rate policies may lead some vehicle buyers to wait," said Charlie Chesbrough, senior economist at Cox Automotive.
Related story: Auto dealers offering more new vehicle incentives as inventories rise, report finds
According to the consumer price index, there was a 21% jump in new car prices between July 2020 and July 2023. Over the last year, new car prices stopped going up, and there is evidence prices might relax.
Kelley Blue Book said that the average transaction price in May 2024 was $442 lower than in May 2023. The average new car sold for $48,389 in May, KBB said.
Experts say the combination of higher inventories and lower demand could continue to drive down prices, which does concern the industry.
“We remain concerned that the second half of the year cannot maintain the growth we’ve seen so far,” said Chesbrough. “Adding to the uncertainty in the market, many consumers likely believe things will be better, or at least more certain, after the November election, which adds to the hesitancy in buying. We still expect 2024 to finish a little better than 2023 — supported by more discounting and better prices, but we will be fighting an uncertain economic outlook.”
