NORWOOD, Mass. — Joseph and Whitney D’Ambrosio spent a week and a half looking at SUVs for their family of five. He’s a firefighter and she’s a nurse at Boston Children’s Hospital. Even with two full-time jobs, they’re struggling to find the right vehicle for their price range.
“We’re still having a hard time [finding something that’s not] a $700 car payment. It’s crazy. I’ve never had to pay that much,” Joseph said.
There is reason to be optimistic about future prices, however, because, after three years of supply chain issues, car lots are finally filling up again.
“New car prices are stabilizing because dealers finally have enough cars to sell,” Kelley Blue Book reporter Sean Tucker said.
The average new car buyer paid $48,808 in June, a 1.6 percent increase from a year ago, according to Kelley Blue Book. That’s the smallest year-over-year price increase since the start of the pandemic.
The supply of new cars appears to be having an effect on used car prices, too. Used vehicle values fell for the third straight month, according to Cox Automotive’s Manheim Report, with wholesale used car prices decreasing by 4.2 percent.
“The 4.2% drop is among the largest declines in [Manheim Used Vehicle Value Index] history and the largest decline since the start of the pandemic,” said Cox Automotive Senior Manager of Economic and Industry Insights Chris Frey.
Boch Chevrolet General Manager Mike DiPaolo said his Norwood dealership is getting regular shipments of new cars and trucks every week, a vast improvement from a year ago when his lot was virtually empty.
“It’s better for the consumer when they come in there’s actually a vehicle they can test drive,” DiPaolo said. “At least now, there’s a unit to show someone. They can feel it, touch it, drive it.”
Kelley Blue Book Executive Editor Brian Moody said if you’re in the market for a car, follow these three steps:
KNOW YOUR INTEREST RATE
Moody said to find out your credit score and determine the interest rate you’ll qualify for. This is important because Moody says used car interest rates are typically higher than new car interest rates.
“If you’re buying a pricey used car, you may be able to get a new car for less money depending on how much money you’re putting down and what the interest rate is,” Moody said.
AVOID VEHICLES EVERYONE ELSE WANTS
Instead of going after the most popular SUV, consider saving money by opting for a sedan or a hatchback.
“Look for something off the beaten path,” Moody said. “If people say they want to save money and they’re looking for a full-size luxury SUV, that’s not a place to save money.”
CONSIDER A HYBRID
Electric car prices are coming down, but they’re still more expensive than gas-powered vehicles. If you have your mind set on an electric car, consider going with a hybrid. Moody says they’re much less expensive.
“If you really want an electric vehicle, look at a plug-in hybrid and see if the cost makes more sense [as opposed to] a full electric,” Moody said.
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