The new year often brings the promise of a fresh start and the intent to upgrade our routines. But just like most New Year’s resolutions come February, shoppers looking to upgrade their vehicles in 2022 may find that not much has changed from the prior year. Tight inventory and rising prices are stubbornly dragging on as new vehicles continue to fly off dealership lots.
Related: Inventory Shortage Leaves Little Room for Haggling; Here Are 5 Other Ways to Save on Your Car Purchase
J.D. Power’s December sales forecast found some early signs of improvements but reported the supply of vehicles as still far from meeting shopper demand. The average vehicle was spending only 17 days on a dealer lot, the firm said, and over half of new vehicles are sold in 10 days or less.
As vehicle supply is scarce and demand remains high, shoppers can expect the hangover of elevated vehicle prices to stick around in the new year. The average transaction price for a new vehicle set yet another record high in December, at $45,743, and reduced discounts are partially to blame. The average incentive for December was estimated at just $1,598 — or 3.5% off the average MSRP, J.D. Power noted. That’s a dramatic drop from the same time a year prior, when it stood at $3,889.
Out With the Old: Trade-in Values Surge
Even though inventory constraints are expected to linger into late 2022 or even 2023, shoppers can offset some of the aforementioned price increases if they have a vehicle to trade in. J.D. Power reports that average trade-in equity was estimated at $10,199 for December, a whopping 83% increase from the year previous. It’s also the first time that metric has topped $10,000.
Along with negotiating on the trade-in, staying flexible and being prepared to buy as soon as the right vehicle arrives can make the resolution of a new-vehicle purchase a possibility in 2022. Need a sprinkling of savings to go along with it? Try one from among these four SUVs and a pickup truck, which topped our survey of incentives for January.