New (and Used) Cars Are So Expensive. Is This the Best Time To Buy a Car?

Get The Right Car At The Right Price
Get the right car at the right price. Photo: Scotty Reiss

Yes, you can get the right car and not get taken for a ride.

If it’s been a minute since you bought a car, you might be a bit more than surprised when you start car shopping these days. 

That’s because the average price of a new car is $48,000. That’s up from about $38,000 in 2020 as the pandemic set in (and we thought that was high then).

Compare that to the the average price of a new car in 2013, the last time many people shopped for a new car, which was about $30,000. That’s some serious sticker shock. 

You can also see that prices crept up slowly from 2010 to 2020, then leapt 25% in just a few years. Timing is everything. 

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Even A Mid Size Pickup Truck Can Make You Feel Strong And Powerful

There are lots of options for great new cars – and trucks – right now. This is the redesigned Chevrolet Colorado mid-sized pickup truck. Photo: Scotty Reiss

Is It a Bad Time to Buy a Car – And When is the Best Time to Buy a Car? 

That depends on your circumstances. In general, the best time to to buy a car is at the end of the month, end of the quarter or end of the year. But like the last few years, all the usual rules are out the window.

For now, it may be best to wait to buy if you can. “New car inventory is still very low, making it difficult to get new cars. To add insult to injury, interest rates on car loans are continuing to rise, and they could hit as high as 8% by the end of the year,” said car buying expert LeeAnn Shattuck. “If you don’t need to buy a car right now, you might wait another year, as we hope that there will be more inventory and lower rates in 2024. So, for some people, it may make more sense to spend a little money on repairs to their current vehicle, especially if their credit is less than perfect. Subprime rates are approaching 20% in many cases.” Ouch.

But if you have to buy a car, be more vigilant than ever to get the right car for your budget and lifestyle, ensure that your payment plan fits your financial situation and that you will be comfortable in this car for the long term.

The Best Time to Buy A Car? End of the Year + End of the Month + End of the Week

Why Are New Cars So Expensive?

We can still blame the pandemic— to an extent. Many parts are still in short supply, they can be slow to get to assembly plants and the cars, once assembled, can be slow to get to dealerships. 

This shortage has been a silver lining for dealerships: They are often selling cars at or above MSRP. This also means that they are fighting for every customer they can get, often using all the dirty tricks they know – not a silver lining for buyers. 

And, new cars are better equipped. Required technology now includes rear view cameras and more safety features; many manufacturers include a standard suite of safety systems such as blind spot monitoring and emergency braking (all of which can lower your insurance!) even in the base model, and conveniences like Apple CarPlay and Android Auto are often standard. Plus, nearly every new car has a touch screen multimedia system, Sirius XM and Bluetooth — all standard. 

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Jody'S Mother -In-Law'S 2005 Audi Tt That Was Aucioned On Bring A Trialer

Used cars are in such demand that auction sites like Bring a Trailer have become a popular shopping destination. Photo: Jody Ellsworth

Why Are Used Cars so Expensive?

All that low new car inventory has pushed used car prices up. While prices have eased a bit in the last few months, they are still more expensive than ever. And, buyers are taking out loans to buy them, making this a very lucrative market for sellers. 

But if you need a car, you need a car. Here’s how to get the right car at the right price. 

A Girls Guide To Cars | New (And Used) Cars Are So Expensive. Is This The Best Time To Buy A Car? - 2023 Chevy Tahoe Monroney Copy

The MSRP sticker, or “Monroney,” is your key to understanding a car’s value. Photo: Chevrolet

Hello, MSRP

It used to be that buyers started at the MSRP and negotiated down. But the tight market means that MSRP is probably what you’ll pay since there is more demand than inventory. 

However, some shoppers are told that they’ll have to pay over MSRP to get the car they want (you may see “Dealer markup” or “supplemental charge” on the sticker). If you hear this, keep shopping. This is true with some very high-demand cars, limited editions and specialty models, but in general should not be the case with the average transaction. For every dealer that asks for a dealer markup there is one who will sell you the car at MSRP.

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Seats Easily Slide And Tilt Forward For Third Row Access

Third row seats that slide and tilt are a great feature and available in many SUVs, including this Mazda CX-90. Photo: Scotty Reiss

Shop Features, Not Brands 

Yes, you have your heart set on a Toyota 4Runner, but what do you really need? An all wheel drive SUV, leather seats, Apple CarPlay, rear seat air vents to keep the kids cool and cargo space that will fit their sports bags. You have a lot of good options. 

“SUVs, especially three row SUVs, remain the most popular vehicles and therefore the most difficult to get,” LeeAnn said. “The Toyota SUVs are the hardest to get right now, along with the Kia Telluride. Consider other brands like Mazda, Hyundai and Subaru. They have a little bit better availability and are still good, reliable vehicles.”

And, if you can buy a sedan instead of an SUV you may get even more top features for your money. “If you don’t absolutely need an SUV, consider a sedan. Sedans don’t sell as well, and there tend to be better deals on those. And many of them get better gas mileage anyway,” LeeAnn told us.

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Know Your Stuff

Know the features you want and what they cost. Know the value of the car you’re shopping for— based on the manufacturer’s site and the price dealers are advertising. 

Know your credit score and budget constraints. Know the value of your trade in if you have one. And know the amount you can put down on a car. 

Also: find out how much your insurance will cost, what the tax and registration fees will be and any other variables that will be part of the purchase. Find out if there are incentives on the car you’re looking at; incentives are starting to return on some cars. 

And then, be unwavering. Don’t be swayed by extras that you don’t need. Many experts shun the idea of an extended warranty, protective coatings, security glass etching and more. Buy what’s necessary, and avoid what isn’t.

Cute Little Cars Like The Nissan Kicks Have A Low Entry Price - About $20,000 - But Does The Base Model Have The Key Features You Need? Photo: Erica Mueller

Cute little cars like the Nissan Kicks have a low entry price – about $20,000 – but does the base model have the key features you need? Photo: Erica Mueller

Don’t be Fooled by Low Price Deals

While the era of the $20,000 car isn’t completely over, it’s fading fast. What do you get with that $20,000 car? Likely, not a lot: the cheapest seats, finishes and features. Chances are that once you add a few key features to that incredible deal, the price will creep up closer to $30,000 and leave you asking, what can I get for that price? It’s worth investigating because for $30,000 you might actually end up with a much nicer car than the top-of-the-line value car.  

And, those low priced cars are often the ones advertised. Yes, that $20,000 car looks great in the ads, but does the dealer really have one? Does it have the features you need? And, will it fit your lifestyle?

My Drive Partner Teia And I In The 2023 Honda Pilot Transport

Grab a friend and take a test drive so you know what you’re buying. My friend Teia and I in the 2023 Honda Pilot Trail Sport. Photo: Scotty Reiss

Take a Test Drive. Please. 

The era of internet car buying has pushed a lot of people to buy a car unseen and undriven. You’ll likely be spending a decade and driving tens of thousands of miles in this car, so it’s worth the 10 minutes it takes to go for a spin. And, it’s fair to go to the closest dealer for a test drive and then buy the car somewhere else if you find a better deal. It’s also completely fair to ask your local  dealer to match the price you see advertised by another dealer.

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Cast a Wide Net and Take Your Time

There’s no reason to simply buy off the lot from your local dealer. It’s convenient for him, but is it right for you? 

If you’re willing to drive a hundred or so miles to buy a car, you might be able to find the car you want at the right price. You can learn more by calling the dealer and putting a deposit down. 

Some buyers are even buying cars from dealerships hundreds or thousands of miles away and having the car shipped: Take a local test drive, buy the car from far away, get the car you want at the right price. 

Sites like TrueCar, AutoTrader and are a great source for locating the car you want.

The Vw Id.4 Is Largely Only Available By Order, And That'S A Great Way To Buy A Car. Photo: Kirsten Alana

The VW ID.4 is largely only available by order, and that’s a great way to buy a car. Photo: Kirsten Alana

Order the Car You Want

Also, consider ordering the car you want. It takes several months, but you’ll get the color, features and finishes you want. Dealers don’t always love to place an order for customers since they have already committed to the cars they have ordered, but you can absolutely order the car you want.

 If a dealer tells you that you can only buy from their allocation (the cars that they have pre-ordered from the manufacturer), that is almost never true. Find another dealer who will place the order for you.

Make Sure Financing Is a Fit

With interest rates at 20 year highs, financing a car is more expensive than ever. But there are ways to mitigate the pain of a high car payment. Making a sizable downpayment will reduce your monthly payment, as will cleaning up your credit score before applying for a loan. Also, consider extending the loan term a bit – but be careful; a 6 or 7 year loan could leave you upside down, owning more on the car than it’s worth. 

Also, shop for the best interest rate. “If you can join a credit union, do it! Credit unions still have the best interest rates. Even though they’re still high, they’re often a point or two lower than the traditional banks,” LeeAnn told us.

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Profile Of The 2022 Chrysler Pacifica. Photo: Sara Lacey

Sometimes, leasing a car makes the most sense, especially if you’ll only need it for a few years. Here, the 2022 Chrysler Pacifica. Photo: Sara Lacey

Is It Worth it to Lease a Car?

If monthly payment is your priority, you might find a lease that fits your budget. “If you don’t drive more than 12,000 miles a year, you could look at a lease,” LeeAnn said. “Leasing has generally been terrible over the last two years, but with high interest rates, manufacturers are starting to have some lease deals. Particularly on the sedans. But always ask what the ‘money factor’ is on the lease.” This is basically the lender’s cost of borrowing money, which is factored into your payment; the monthly payment on a lease basically covers the depreciation on the car and the cost of financing. 

So how do you know if the cost of financing on a lease is lower than the cost of purchasing that car? “You can convert a money factor into an APR by multiplying it by 2400,” LeeAnn says. “Just be sure you understand the risks of leasing before you sign on the dotted line.” This includes milage included in the lease, cost of additional miles driven, amount due at signing, requirements for ending the lease and any other items you’ll be responsible for.

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Consider Buying Your Leased Car

If you leased a car in the last 3 or 4 years you might still be driving a car that is worth more than you could buy it for. Even if you don’t want to keep driving your leased car, or it no longer fits your life, consider buying it outright and then selling or trading it. 

If you know you want to trade it in for a new car or a new lease, at least check your lease contract for the residual value of the car. In the last few years many people have made a sweet bonus in buying then selling or trading their leased car.  

Take a breath, make a plan and get the hard work out of the way first so you can get to goal on your new car. Prices are not likely to go down or be more negotiable in the near future, so while it’s not the ideal time to buy a car it won’t be any more ideal in the near future. Aren’t you glad you have a car friend?

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Journalist, entrepreneur and mom. Expertise includes new cars, family cars, 3-row SUVs, child passenger car seats and automotive careers... More about Scotty Reiss