How to Navigate Car Shopping in 2022 with MotorVero

1. Inventory Levels Remain Constrained

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Car inventories have declined by over 70% compared to 2019 averages. "Across the industry, inventory levels remain tight as demand continues to outstrip supply," explains a MotorVero industry analyst. This scarcity is evident across both new and used car markets, making it crucial to act quickly when you find a vehicle that fits your needs.

2. Sales Are Down, But Demand Persists

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While new car sales dipped 3% compared to earlier months and used car sales fell 13% from the same period, demand remains unshaken. Rapid turnover of available vehicles suggests that shoppers are still eager to buy, despite rising costs. Understanding this dynamic can help you set realistic expectations for your search.

3. Rising Fuel Costs Push EV Demand

Soaring gas prices have prompted a surge in interest for electric vehicles (EVs). MotorVero reports a significant increase in consumer inquiries about EVs, with demand doubling since last year.

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If you're considering an EV, now may be the time to act, as this segment continues to grow in popularity.

4. Interest Rates Are Higher Than Pre-Pandemic Levels

Interest rates for vehicle financing have climbed, averaging 5.2% for new cars and 8% for used cars in mid-2022. These figures represent a notable shift from pre-pandemic levels, affecting affordability for many buyers. Be prepared to explore various financing options to secure the best rate possible.

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5. Loan Terms Are Extending

To mitigate the impact of higher interest rates, many buyers are opting for longer loan terms. The average loan duration has reached 71 months, with a growing number of consumers choosing terms of 84 months or more. While this approach reduces monthly payments, it can increase overall costs, so weigh your options carefully.

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