With car prices skyrocketing during the pandemic, buying a car is a major financial decision. According to Kelley Blue Book, the average price of a new car in May 2024 was $48,389.

With so much money on the line, it’s important to choose a vehicle that’s not only right for you, but also delivers great overall value.

What to Expect from the Auto Market in 2024

David Boice, CEO and Co-Founder of Team Velocity, an automotive data-driven marketing agency, predicted that 2024 will be the best year for new vehicle sales volume since 2019. While he predicted high sales, Boice believed buyers would have plenty of vehicles to choose from.

“I expect new car inventory levels to remain high, which is good for consumers because the incentives will continue to be aggressive,” said Boice. “So, I expect it to be a great volume year, despite persistently high interest rates.”

The Best New Cars

Andrew Karnakov, founder of the peer-to-peer car-sharing platform Carsan, recommended that buyers looking for a new car consider the long-term value the vehicles offer. “[Vehicles like the Land Rover Defender or Wrangler models] hold their value as classics and will be cool to drive even in 20 years,” he said. “It’s better to buy them new because annual percentage rates (APR) are much lower for new cars than for even two-year-old ones.”

According to Edmunds, the average APR on used vehicles in June 2024 was 11.5%, while the average APR for new vehicles was 7.3%.

Using that data, a $60,000 loan for a new Land Rover Defender might have a 7.3% APR. In comparison, a $50,000 loan for a two-year-old Defender might have an 11.5% APR. Even if you’re paying less for that used vehicle, the higher interest rate will increase what you’ll pay over the life of the loan. Ultimately, you could pay the same amount for a two-year-old Defender as you would pay if you bought the vehicle new.

Karnakov also suggested buying Subarus new, because their values don’t tend to depreciate much. With minimal depreciation, you won’t save significant money on a lightly used Subaru.

Source: GoBankingRates