New Car Prices at All Time High, What Should You Do?

Posted Friday, Aug 12, 2022

As a result of a global shortage of microchips last year, new car prices skyrocketed. The demand for cars was so high, the automakers couldn't build them fast enough. An economic wave hit the car market while we dealt with the chip shortage. Compared to pre-pandemic prices, new cars cost 41% more.  Although used cars have been affected by the chip shortage, prices haven't risen nearly as much. In a few years, they will all become used cars, so spend your money on something that is not so outrageously overpriced, especially if you are financing the car. When it is time to trade or sell, your equity position will be much better.

How soon will prices begin to drop? As the chip shortage eases, car prices will also gradually normalize. When automakers are able to produce a normal supply of new cars, the market will stabilize and prices will begin to drop. It is difficult to predict when a change of this magnitude will occur. Some believe it will take place as early as next year, others predict it will take two or three years. Regardless of what happens in the new car industry, used cars are still the safest bet.

Purchasing a car in this market can be tricky, so here are a few tips.

-Choose used. The used car industry was not impacted by the microchip shortage nearly as much as the new car industry.

-Read local reviews

-Figure out what you can afford.

-Be cautious. Don't take the first offer you get.

As many dealers struggle with inventory shortages, CNY Drives makes sure that our lots are always full. We stand by our promise to provide quality vehicles and guaranteed financing.

Big Luke's Tip: Do not buy a car from a dealership that does not appear to take pride in what they do. Cars are a serious investment. We invest the resources required to provide you with a quality car and the service you deserve. Remember, go with your gut feeling, and be confident in your decision.