Experts hope car prices remain stable in 2024

BRYAN, Texas (KBTX) – Car prices soared in 2021 after the COVID-19 Pandemic, but they have since remained level for the past three years.

Supply chain problems after the Pandemic are to blame for car prices skyrocketing, making it difficult to purchase a car. However, while prices were at an all-time high in 2021, car prices have either fallen or remained the same in the past three years.

“So they went up and used car prices went up even more because of the same reason. But now, after three years have gone by car prices have quit rising, or hardly rising, and the Consumer Price Index continues to increase and now the CPI almost caught up to where car prices were,” said Dennis Jansen, the Director of the Private Enterprise Research Center and Professor of Economics at Texas A&M University.

Housing and grocery prices are high, but if you’re in the market for a new car, experts say 2024 could be your year.

“Prices went up so much in 2021 and 2022 and they’re sort of just returning to normal if you will,” said Jansen.

KBTX spoke with Douglass Mazda car dealership about what vehicle prices looked like in 2023 and the trends they expect in 2024.

The General Sales Manager at Douglass Automotive Group, Eli Trompeter, says while you still need to look out for interest rates, car prices have started to drop. He says after a large increase in 2021, prices leveled off in 2023 and they expect that trend to continue this year.

Trompeter says supply has finally caught up with the demand.

“A lot of times car payments have been at all-time highs, we’re started to see that trend stay stable or reverse a little bit just in terms of the available supply out there and then availability,” said Trompeter.

Douglass Mazda car dealership says they expect manufacturers to assist dealers with special rates in 2024, cutting their prices to sell more cars.

“Everyone needs to be more competitive on the manufacturer front to be able to sell vehicles. So with that in mind and affordability being a key focus, they’re helping out in terms of things that are going to help consumers afford new vehicles and aim to please those areas that are most important to people, and interest rates are going to be one of those concerns,” said Trompeter. “This assistance is in the form of incentives to pay down the cost of the vehicles but sometimes it’s also in terms of special interest rates.”

“Car dealers are in business, right, and if they can’t sell the cars for the price that they’re paying the manufacturers, then what are they going to do,” said Jansen.

Data shows that car prices have increased in the last three years, but they have not gotten much higher than what prices looked like in 2021.

“From the end of 2022 to the end of 2023, new car prices went up 1% and used car prices actually went down almost a couple percent. And during that same time, the overall price level went up 3%. So cars actually in 2023 got cheaper but they went up so much in 2021 and 2022, that the price is still higher than it was back in 2021,” said Jansen.

So far in January 2024, new car prices dropped 0.04 %, and used car prices dropped 3.4%.

Jansen and Trompeter say there’s pressure for car prices not to increase and they think car prices will even fall in 2024.