Is January 2022 a Good Time to Buy a Car?
Alexandra Maloney
· 3 min read
If you’re planning on buying a car in 2022, we’re here to help. While you can always use
Jerry
to score the best deals on car insurance, we want to assist you in the total car-buying
process. To kick off the new year, we’re giving you some insight into what the general new and used car markets might look like for the year, plus if we think buying in January 2022 is a good decision.
The 2022 car market
There are a few problems with the car market headed into 2022.
One of the biggest issues car dealers are facing right now is lack of inventory, due in major part to a
global car chip shortage
. A microchip is one of the most important pieces within a car—without it a car can’t function. When the pandemic started in 2020, many car chip manufacturers shifted their focus away from chips to other products, because the demand for new cars was so low.Now, about a year and a half later, while the need for new cars has increased again, chip manufacturers are still struggling to meet demand. The same issue has arisen for other car parts. Plus, with the surge of the omicron variant, production for all parts is slowing even more.
According to
Business Insider
, the global chip shortage left dealers struggling to restore supply and increased new car prices by 11%. Surprisingly, Business Insider also reports that used cars have seen price increases of up to 31% over 2021 as well, another impact of the supply shortages. Not to mention, because cars are in such high demand, car prices are being inflated, which makes it harder to get approved for loans, reports
Motor Biscuit
. Luckily, experts speculate that Q1 of 2022 will be the highest prices, and the market should begin to normalize as the year goes on. Buying a car in January 2022
While January 2022 isn’t an ideal time to buy a car, it’s likely that the first few months or even first half of 2022 won’t be optimal car buying markets either. If you can’t wait much longer before getting your hands on a new car, January 2022 isn’t a horrible time to buy.
For starters, what new inventory is available will likely be on dealers’ lots at the start of a new year. While it may be limited, it’s unlikely there will be no cars available. Additionally, if other car buyers are waiting until after January of 2022 because of shortages, you might be able to get a better deal if you do stop by the dealership.
Additionally,
new car
prices aren’t wildly inflated right now. But, if you’re looking to buy a used car
, it might be best to hold out for a few more months if possible. The bottom line on buying a car this year
The car market at the start of 2022 isn’t great—especially for buyers looking to purchase a used car. As
Fortune
reports, the true answer to prices normalizing in the car market is for supply chain issues to be resolved and production to return to normal. Unfortunately, that’s easier said than done and might not happen for a while. If you can, waiting until the second half of 2022 will likely score you lower prices. But, if you can’t wait that long, buying a new car right now will likely be less expensive than a used car.
