when are car prices going up

[DelGenevieve]

Car prices are currently in a state of flux, but the general expectation among industry analysts is for a gradual increase over the next 6-12 months after a period of decline. The main drivers for this upward trend are anticipated inflationary pressures on manufacturing and materials, potential supply chain disruptions, and a shift in automaker strategy toward prioritizing profitability over volume. However, the rate of increase will vary significantly between new cars and used cars.

The era of skyrocketing prices due to severe inventory shortages is largely over. New car inventory on dealer lots has been rebuilding. This increased supply has started to cool prices from their peak. The key factor to watch now is automaker incentives. As manufacturers aim to clear out older inventory, we may see temporary price cuts or attractive financing offers, which can mask the underlying Manufacturer's Suggested Retail Price (MSRP) increase on new models.

For used cars, the market is more volatile. Prices are closely tied to factors like new car availability, interest rates for auto loans, and the volume of off-lease vehicles returning to the market. Higher interest rates make borrowing more expensive, which can dampen demand and put downward pressure on used car prices. However, if new car prices rise steadily, it often pulls used car values up alongside them, as buyers seek more affordable alternatives.

Factor	Impact on Price	Current Trend & Data Point
New Car Inventory	Increased supply lowers pressure	Average new car inventory is around 60 days supply, up from 30 days a year ago.
Automaker Incentives	Can temporarily lower transaction prices	Average incentive spending per vehicle is approximately $2,900, rising for some models.
Federal Interest Rates	Higher rates reduce buyer affordability	The average interest rate for a new car loan is near 7%, a multi-year high.
Used Car Supply	More supply lowers prices	Wholesale used vehicle prices (as tracked by the Manheim Used Vehicle Value Index) have decreased about 10% year-over-year.
Raw Material Costs	Increases production costs, leading to higher MSRP	Prices for key materials like aluminum and lithium (for EV batteries) remain volatile.

Ultimately, the "when" depends on your target segment. Expect modest, incremental increases on new car stickers, while used car prices may see smaller, more erratic movements, heavily influenced by economic conditions. The best time to buy is when your personal finances are ready and you find a vehicle that meets your needs at a price you're comfortable with.

[SanViolet]

From what I see shopping for a sedan right now, prices aren't really "going up" on the lot. They're just not dropping like they were. The discounts are smaller. The salesman told me straight up that the crazy deals are gone. If you're waiting for a collapse, it might not happen. I think prices are just settling at a new, higher normal. My advice? If you need a car, buy now and focus on negotiating the final price, not waiting for a market crash that may not come.

[SanRachel]

On the dealership side, the focus has shifted from moving metal to moving the right metal profitably. We're seeing manufacturers push through modest MSRP increases on new model years, but the real story is the pullback on incentives. The window of high discounts is closing. For used cars, our auction prices have stabilized after a sharp correction. The forecast here is for steady, single-digit percentage increases over the next year, assuming no major economic shocks. It's a return to a more predictable, but elevated, pricing environment.

[ConnorFitz]

The equation is different for electric vehicles. While overall market pressures apply, EV pricing is hyper-sensitive to battery material costs and government tax credits. We've seen some manufacturers cut prices aggressively to qualify for the $7,500 federal incentive. However, as production scales and raw material costs potentially rebound, those prices will firm up and rise. The timing of an EV price increase is directly tied to the stability of the supply chain and any changes to EV incentive policies. The current low prices on some models might be a short-term play.

[MargaretAnn]

Looking at the economic indicators, the conditions for broad price increases are building. Inflation, while cooling, continues to raise production costs for automakers, who will pass these on to consumers. However, high interest rates are acting as a counterweight, suppressing demand. The key will be the Federal Reserve's actions. If rates begin to fall in late 2024, pent-up demand could be unleashed, creating a scenario where prices climb more noticeably. It's a tug-of-war between manufacturing costs and consumer borrowing power.