0 2 min 3 mths

As car insurance and vehicle prices continue to rise, many potential buyers are taking a wait-and-see approach, according to a report from automotive website Edmunds. The report indicates that a significant 73% of consumers are opting to hold off on purchasing a vehicle until they can find a more favorable price.

Moreover, hopes are high among consumers regarding new car prices; 48% are aiming for a price tag under $35,000, while 14% wish for prices below $20,000. Additionally, a third of respondents expect car loan interest rates to fall between 0% and 3%, with three-quarters hoping they won’t exceed 5%.

According to FOX Business, vehicles from prior model years offer a cheaper alternative, with prices at least 20% lower than the average of $47,000 for 2024 models. Edmunds also notes that most consumers are looking for used cars priced under $15,000.

The rising costs of vehicle ownership are also contributing to this hesitance. The American Automobile Association (AAA) recently reported that the cost of driving a car in 2024 is projected to be $12,297 annually, translating to about $1,024 per month, which represents an increase of $115 compared to 2023.

Factors such as increased vehicle depreciation and a worsening economic environment are significantly dampening the desire to buy new cars. However, models like the Chevrolet Trax are capturing attention, largely due to their starting price of around $20,000, significantly below the market average.

Insurance premiums are also impacting car-buying decisions. FOX Business highlights that due to rising maintenance and tax costs, insurance prices have already seen an uptick in 2024 and are expected to rise further.

Data from the Bureau of Labor Statistics reveals that car insurance rates surged by 22.2% in 2024, the second-highest increase on record since the oil crisis in 1976. Reuters reports that, given the various factors at play, it is reasonable to expect further hikes in car insurance premiums.