Should you buy a car in 2024? What to expect

Both new and used car purchases were expensive for drivers this year, as limited inventory and high borrowing costs affected affordability.

“Interest rates have taken such a toll on purchasing power,” said Ivan Drury, director of insights at Edmunds.

Yet, consumers might begin to see lower prices in 2024, experts say. Improvements in the supply chain ought to bolster inventory, while interest rate cuts are on the horizon.

“It’s going to be a much better time for a consumer to buy a car in 2024 versus this year,” said Paul Waatti, an industry analyst at market research firm AutoPacific.

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November was the third consecutive month when the average transaction price for a new car was lower than last year. The average new car sold for $48,247 in November, an increase of less than 1% from October, but a 1.5% decline from last year, according to data from Kelley Blue Book.

Edmunds puts the November average at slightly less, $47,939, per data it provided to CNBC.

In 2023, low inventory in a high-demand market left little room for discounts. That is likely to change next year as dealers will be motivated to sell more cars on the lot, experts say.

“As supply goes up, we tend to see more incentives being thrown on the hoods,” said Waatti.

Car shoppers could see more models with lower sticker prices before discounts, too. As supply chains continue to normalize, “we’re going to start to see automakers build more lower-end models, which are more affordable, and that should help bring that average monthly payment down,” he said.

Some automakers are recalibrating their production in response to that lower demand. For instance, Ford Motor plans to cut production of the F-150 Lightening by half in 2024. “That’s a very high number,” said Drury.

Similarly, General Motors says it’s pushing out the launch of the all-electric Chevrolet Silverado for another year, said Drury.

“These vehicles we had very high hopes for, a lot of anticipation … they’re getting unfulfilled,” he said.

While market growth is expected to continue, it’s not going to be at the same rate like the past 12 to 18 months, said Waatti.

After two to three years of “full steam ahead,” electric cars are now “sitting on dealer’s lots collecting dust,” said Drury. “We don’t have the enthusiasm we used to.”

As manufacturers and dealers look to clear out those vehicles, shoppers might come across more plentiful incentives next year as well as less expensive new models.