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.
The Best Used Cars
Karnakov said a vehicle from a lease-return program may be a solid investment if you want to buy used. “A lease-return program is when a dealership sells cars that were previously leased,” explained Karnakov. A dealership might offer up a previously leased vehicle like a three-year-old Chrysler Pacifica with 50,000 miles for $19,000, half the price you would pay for the vehicle if it were new.
Choosing a larger vehicle is a good idea if you ever want to rent your vehicle out to generate extra income. According to Karnakov, seven- and eight-seat vehicles like the Honda Odyssey, Toyota Highlander, and Chevrolet Traverse are in high demand.
When buying used, be sure to do a little extra research. Karnakov recommended checking the vehicle’s history on Carfax to make sure it wasn’t involved in car sharing or carpooling services, which can put extra wear and tear on the vehicle.
The Best Electric Cars
Choosing the best electric vehicle is a bit more complex, and you’ll need to weigh factors like your travel habits and lifestyle, as well as the vehicle’s range and charging needs. However, with more electric vehicles released each year, you’ll have many to choose from if you want to go electric.
“The Tesla Cybertruck is the hottest electric vehicle on the car sharing and car rental market,” said Karnakov.
If you don’t need such a large vehicle, don’t plan to share your car, or have a smaller budget, the new 2024 Nissan Leaf starts at $28,140 and received a 7.9-star rating from Edmunds .
Navigating the automotive market can be challenging, especially given the recent wild market fluctuations. Interest rates have varied greatly, but don’t necessarily let those rates scare you off. Boice explained that original equipment manufacturers often offer aggressive incentives in response to climbing interest rates. “Many original equipment manufacturers will offset those high rates to make their vehicles more affordable,” he said.
If you’re considering buying an electric vehicle, take some time to research potential discounts. “Electric vehicles are steadily climbing in popularity with special tax credits [and] lower prices, and inventory levels are falling in line with conventional vehicles,” Boice said. “I expect that will continue throughout 2024.”
Karnakov recommended that buyers try to remain rational, rather than emotional as they shop for a vehicle. “Make decisions based on numbers,” he advised, suggesting that buyers consider both new and used cars and keep depreciation in mind, too.
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