Finally, Some Good News About Car Prices?
Yes, Grandpa, everyone knows that a McDonald’s hamburger used to cost a nickel when you were a child, but the price increases of the past few years are not your usual garden variety inflation creep. Even if you are so young that you have not yet needed to renew your driver’s license, you can remember a time when no one paid more than $40,000 for a new car unless they were trying to show off a little bit. Today, you can’t even find a used car for less than $40,000 unless you are buying it on Craigslist from someone whose email address gives no indication of their legal name. There is a silver lining to all of this, but don’t expect a huge drop in car prices anytime soon, and definitely don’t expect a clearance sale of gently used RAV-4s. If you have a car, you should keep it for the foreseeable future if it still runs. If your goal is to straighten out your finances so that you can qualify for a car loan, you should contact a Plantation debt lawyer.
Why Are Cars Getting Cheaper, and Why Are They Still So Expensive?
The average sale price for new cars reached a peak at the end of 2022. Since then, it has decreased by more than five percent, so that the average price of a new car is just below $40,000. Part of this is because car technology has made major advances in the past decade. Car parts were cheaper to replace when they were just pieces of metal and plastic instead of mini computers meant to avert collisions. Therefore, this decrease in prices is unlikely to result in prices plummeting to where they were a long time ago.
Of course, it also means that cars depreciate in value less than they used to. The difference in appraised value between a three-year-old car and a seven-year-old car is considerably less than it used to be.
Making Vehicle Purchasing Decisions in the Context of the New Normal Car Price Range
Yes, Grandpa, you’re right that you should not buy anything that eats or rusts as an investment. A car is not an investment in the way a house is. Today’s cars are more collision-proof, and they use less gasoline than their predecessors, if they even use any. Those car payments are painful, and car loan terms are longer than ever. If you are sticking with the car you have instead of buying another one, you are making a wise choice. The prices of car loans may decrease if interest rates get lower, but 40 grand for a car with a 2020s model year is the new normal. The good news is that, if you buy a 2020 car in 2027, it will be a lot newer than a 1990 car was in 1997, and you may not ever need to take it to a gas station.
Work With a Debt Lawyer About Being Debt-Free on Wheels
A South Florida debt lawyer can help you strategize about affording a car loan. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.
Source:
cnbc.com/2024/03/21/new-used-car-prices-are-cooling-heres-what-auto-shoppers-can-expect.html
