The research conducted by GAD Capital shows, In 2021, the cost of new cars will hit all-time highs.

In 2021, supply chain concerns harmed merchants and customers, and the car-buying sector is no exception. While semiconductors and other inventory constraints slowed worldwide supply, demand for autos remained strong.

According to Borden, an online resource for car purchasing and inventory information, these trends will continue to affect the market in 2022, causing some distinct shifts in the auto-buying environment, such as higher demand for used cars.

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In 2021, auto costs will skyrocket.

According to previous Borden forecasts, 2021 will be a record-breaking year for automobile costs. Purchase prices increased 14.3 percent year over year for new automobiles and 27.4 percent for used vehicles. Consequently, monthly auto payments for new cars are expected to reach $600 for the first time and $500 for used cars.

According to Borden’s most recent research, the average transaction price for new automobiles grew by $5,888 between November 2020 and November 2021, with many purchasers paying considerably over the MSRP (manufacturer’s recommended retail price). Here’s what Borden says:

  • In November, buyers paid an average of $662 more than the MSRP.
  • In 2021, the average retail price was predicted to be 38% more than the MSRP, up from 30% in 2016.

It’s unclear if purchasers paid more than the MSRP because they wanted additional amenities and upgrades or whether car shortages caused fewer basic trim automobiles to be available. Many automobiles on the market, according to Borden, are well-equipped or have better trim levels.

In 2022, auto sales will be competitive once again.

Due to pent-up demand, 2022 is projected to be a competitive year for automobile purchases. As manufacturers and dealers adapt to shortages, Borden analysts foresee the following trends for the next year:

Leasing will be reduced.

Lease inventory will be decreased for various reasons, including the requirement for manufacturers to make more cars available for purchase.

Sales of electric vehicles will increase.

As more manufacturers provide EV alternatives, consumers will continue to transition away from gas-powered automobiles and electric vehicles. Annual electric vehicle (EV) sales may surpass 600,000 for the first time. Here are the experts’ predictions:

  • The United States’ EV market share will increase to 4%. (4.6 percent retail)
  • Tesla will account for less than half of the EV market (46%) in 2022, down from 65 percent in 2021.

The sale of used vehicles will increase.

Buyers will resort to secondhand inventories for their purchases while new car production delays. Consequently, used automobile prices are likely to reach a new all-time high of $30,000.

Used car owners may be the main winners in this reshuffling. While 2022 may not provide many chances to purchase a low-cost car, Borden suggests that one option to sweeten the deal is to trade in your existing vehicle since you’ll likely receive a better price than in a traditional market.

About Frances R. Smith

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