The automotive market has had quite a ride over the past couple of years. As we head into 2024, knowing what to expect and what factors are at play can help you put together a plan of action if you are looking to purchase a new or used vehicle. Today, we’ll take a closer look at what the auto market has in store for 2024.
Car Dealerships Expect High Sales to Continue in 2024
The U.S. automotive industry had a strong run in 2023. While sales were a bit lower as compared to car sales in 2021, car dealerships did an overall better job than in 2022. Despite UAW labor strikes in October, U.S. Car sales were up by a combined 12.5% in October as compared to the same time the year before. Most in-demand new vehicle sales were pickup trucks and SUVs. Topping the list of some of the most in-demand vehicles were the Ford F-series, the Chevrolet Silverado, and the Toyota RAV4. As this high demand continues, many analysts believe that the auto market will continue to have a solid run even in 2024.
Affordability Remains Center Stage in the Automotive Market
Although the automotive market is expected to continue its climb in 2024, that doesn’t mean consumers are jumping at the opportunity to buy from their local car dealerships. In fact, one of the biggest issues heading into the 2024 year is the lack of affordable entry-level vehicles. Gone are the days of base model cars that start at low to mid $20,000. Entering 2024, the cheapest car is expected to be the Nissan Versa, with a starting base price of $16,130.
For families who need more space and safety features, however, this might not be the best option. This lack of affordability may push consumers into other financing options, including lease deals and used or certified pre-owned instead of newer models. Overall, while sales are expected to continue, the way consumers shop is expected to change.
Consumer Demand Remains Steady Despite Higher Borrowing Rates
Consumer spending is still at a lull thanks to post-pandemic recovery and high interest rates. Because Americans are more conscious of how they spend, thanks to economic issues like inflation, many new car buyers might not be as ready to jump on a new vehicle purchase as compared to years before. This behavior could also push consumers into the used car space as this market offers more affordable options for consumers on a tight budget.
The Automotive Push to Electric Cools Down
The electric revolution was strong in 2023 at nearly all car dealerships across the nation. And while it’s expected to continue through 2024, there does seem to be some discussion as to whether this electric momentum continues or cools down a bit.
According to Economic Intelligence, government and consumer focus on climate change will continue to push electric vehicle sales up, in some areas by as much as 21%.
Available federal, state, and even local tax credits still make electric vehicles attractive options for new car buyers. However, concerns about battery function, charging stations, and the overall practicality of owning an electric vehicle are still being sorted out, which could push some away from shopping for electric models. Plus, a lot of consumers are watching as states like California, Virginia, and others push electric vehicle mandates in the coming years.
Bottom Line: What Will 2024 Hold for the Automotive Market
Overall, while experts believe the auto market will continue its growth in 2024, there will be options for all types of consumers. Depending on your automotive needs and how much you can allocate toward those needs, you can still find a model that suits your lifestyle. Plan for your purchase in 2024 when you work with trusted car dealerships that can help you explore available options.
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