NASHVILLE, Tenn. (WTVF) — If you are currently on the hunt for a new car, you probably have already come to this realization: it is simply a bad time to buy a car.
The big reasons are inflation and supply chain issues, and it is not looking like there is going to be a quick fix for either problem.
This all started following the COVID-19 pandemic, and we're still feeling the impact.
In 2022, the average price for a new car hit a record high of over $48,600 according to Kelley Blue Book.
According to Market Watch, the average price for used cars started to look slightly better by the end of 2022, going from being well over $30,000 to dropping below $29,000.
However, if you have not bought a car in a while whether new or used, you are likely to still face sticker shock.
Auto loans are significantly more expensive due to the Federal Reserve increasing interest rates to combat inflation.
When it comes to supply chain issues, modern cars require microchips, and worldwide microchip production is still catching up from factories being closed due to the pandemic.
The UAW strike could also have long-term impacts on car production.
All this to say, if you absolutely need an affordable car right now, you could find one, but you have to be realistic about your expectations.
"When we see that only one car transacted for under $20,000, that's not the same as saying there aren't any $20,000 cars available. There are cars at that price, but oftentimes people are not picking them, or they're adding options to those cars to transact them at a higher price," said Brian Mood with Kelley Blue Book.
The good news — experts said it might be a good time to sell or trade your car because it is likely worth more now. However, if you would also need to buy a new car after, you would have to weigh the pros and cons.
