Car Price Predictions 2024: Proof the Auto Market Crash Has Begun!


  • Used and new car prices have been declining, as higher interest rates hurt demand and inventory builds.
  • Blue Book values have been consistently declining, with analysts projecting it may take time for the market to find a bottom.
  • This is clearly a buyers’ market, benefiting those looking to take advantage of dealer incentives right now.
car price predictions - Car Price Predictions 2024: Proof the Auto Market Crash Has Begun!

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Throughout 2024, the new car market maintained unusual stability despite near-record high prices. Setting price forecasts for automotive models has become a constant challenge for many years as factors like the pandemic and supply chain problems arise. That said, buyers and sellers are constantly watching market shifts, making it imperative for everyone to make decisions.

In 2024, specific new car segments witnessed significant price drops, notably the luxury segment influenced by Tesla’s (NASDAQ:TSLA) competitive pricing. In the United States, Tesla remains in the top 10 luxury brands, but it has witnessed a 7% decrease in price over the last year.

Moreover, the price of non-luxury vehicles also saw a slight increase. In February, the average price sat at $45,283, showing a 2% rise from January but a 1% decrease from 2023. Despite stabilizing at record highs, new car prices remain substantially higher, up 30% since 2019.

Why Analysts Say Car Prices Will Decrease

In October 2023, the average new car price sat at $47,936. Data showed a 1% decrease from 2022, and prices continuously went down 3.5% since December 2022. Predictions hint at further declines in 2024, yet certainty remains uncertain. An oversupply of 5 million vehicles may prompt price reductions.

GOBankingRates interviewed David Meniane, CEO of, to forecast if the downward trend would persist into 2024.

Meniane noted that the timing of your purchase in 2024 will influence your price. “October to January is typically the best time to buy a vehicle, especially during the month of December,” he explained. Waiting until year-end may yield substantial discounts.

Additionally, Meniane anticipates notable price drops for SUVs and used sedans due to projected oil price increases in 2024. Competitive pricing from manufacturers may sway consumers towards larger, less fuel-efficient vehicles. Conversely, new EVs and hybrid cars are expected to maintain or increase prices due to growing demand and emphasis on sustainability.

Due to ongoing supply shortages, cars dependent on semiconductor chips could maintain or increase prices. Meniane explained that disruptions in the supply chain have elevated production costs, potentially leading to higher prices for models heavily reliant on electronic components.

Used Car Prices

When 2024 started, the used car market also witnessed some decreases. However, the good news is that it did not return to its pre-pandemic levels, too, due to high demand. February’s data showed that the first 15 days saw a 13.8% decline in wholesale used car prices. That marked a notable shift in market dynamics compared to the previous year.

All vehicle segments experienced declines, notably luxury cars (13.2%), SUVs (13.5%), compact cars (16.9%), midsize cars (15.9%) and pickups (14.6%), compared to February 2023. Month-to-month, prices dropped across major segments, with compact and midsize vehicles declining by 0.7% and 0.1%, respectively. Pickups and luxury cars saw decreases of 1.7% and 1.1%. Electric vehicles depreciated more annually (16.1%) than monthly (0.3%). Cox Auto reported these trends.

Cox Auto noted tighter wholesale vehicle supply in early February, with inventory levels significantly below pre-pandemic levels. Despite gradual price normalization, new vehicle surpluses suggest increased availability of used cars in the future. Surveys show consumer optimism regarding the automotive market, contrasting concerns about broader inflation.

What Kelley’s Book Says

In February data from the Kelley Blue Book, the average transcription price (ATP) for new cars sits at $47,244, with a 2.2% decline year-over-year. A Cox Automotive analyst Erin Keating also said that affordability remains a challenge for many car buyers.

Despite rising inventory levels benefiting consumers, they are still below optimal levels. In February, manufacturer incentives rose to an average of $2,787, further impacting pricing dynamics.

In February, non-luxury vehicle prices averaged $44,052, reflecting a 2.1% year-over-year decrease. Luxury vehicle prices averaged $61,424, dropping over 6% annually, with luxury vehicles constituting 18% of total sales. Electric vehicle prices averaged $52,314, down 12.8% from the previous year.

Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, noted that despite lower prices and increased competition, EVs remain nearly 19% higher priced than mainstream non-luxury vehicles.

Inventory Updates

Dealerships gauge their new car inventory through “days of inventory,” reflecting how long it would take to sell current stock at the present sales rate if production ceased. By March, many brands had inventories 52% higher than a year ago, prompting heavy discounts on surplus vehicles. However, Toyota (NYSE:TM), Honda (NYSE:HMC) and Lexus faced inventory shortages, leading to unfulfilled orders. 

Despite ample inventory, specific models like the Toyota Grand Highlander, Ford Maverick and Chevrolet Trax remained scarce. The latter is one of the most affordable cars in the U.S. at $21,495.

Cox Automotive’s analysis of vAuto’s new car dealership management software data revealed that Dodge, Jeep, Chrysler and Ram had inventories at least double the industry average. Conversely, Lincoln and Genesis boasted ample stock. Toyota, Honda, Lexus, Land Rover, Kia and Cadillac faced inventory shortages. 

Overall, the auto industry held 76 days’ worth of vehicles in early March, down from 80 days’ worth the previous month and 86 days’ worth pre-pandemic in 2019.

This Is a Buyer’s Market

Amid the economic disruptions caused by COVID-19, new car prices soared, worrying both buyers and automotive investors. However, a recent shift has made new cars more affordable, benefiting buyers and investors alike. Despite a $10,000 increase in average prices since before the pandemic, recent data shows a nearly $3,000 decrease from peak prices in December 2022.

Rebecca Lindland, senior director at, predicts further improvements for buyers, noting that nearly half aim to spend under $30,000, although only 13% of new cars fall within that range. Low-price availability has increased by 63% compared to the previous year. As dealer inventory and production recover, Lindland anticipates a shift to a buyer’s market, offering reassurance for prospective buyers and investors alike.

New-car prices would settle around $46,000, surpassing prepandemic levels by about $8,500. Despite projections of a 3% price decline, there’s no anticipation of a drastic crash. Most automakers forecast lower pricing this year yet expect robust profitability, with General Motors (NYSE:GM) targeting a $13 billion operating profit for the year. 

Concerns over profit declines have impacted GM stock, trading at 4.8 times estimated 2024 earnings, down from the previous average of around 6 times. While affordability improves, some abnormal aspects persist in the industry’s recovery from pandemic-related disruptions.

The scarcity of used-car inventory persists due to fewer leased vehicles returning, stemming from reduced car sales in 2020, 2021 and 2022. 

According to Lindland, approximately 10 million cars are currently unavailable, a situation expected to improve over time. The limited supply of used vehicles could lead to more resilient pricing as buyers weigh options between new and used vehicles.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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