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Recession watch: Holiday car shopping statistics and predictions Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by offering you interactive financial calculators and tools that provide objective and original content, by enabling users to conduct research and analyze information for no cost and help you make financial decisions with confidence. Bankrate has agreements with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies who pay us. This compensation could affect how and when products are listed on this site, including the order in which they may be listed within the categories of listing, except where prohibited by law. This applies to our mortgage and home equity products, as well as other products for home loans. This compensation, however, does not influence the information we provide, or the reviews that you read on this site. We do not include the vast array of companies or financial offers that may be available to you.
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3 min read Published November 28, 2022
Authored by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers in navigating the ways and pitfalls of taking out loans to purchase a car.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to take control of their finances with precise, well-studied information that breaks down complex topics into manageable bites.
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As the season of Christmas approaches the last thing you want to consider is the recession that is expected to arrive over the next few years. But ignorance is not always bliss. Inflation is rising and the possibility of recession will impact every aspect in the world economy. This includes car purchases, with new vehicles being purchased in October, according to Kelley Blue Book. If you’re one of the people who are concerned about the current recession, being patient could save you money. Instead of giving a car with a big bow this season -for your self or someone else- consider where prices stand and how you can best prepare for the future . Recession preparedness statistics Unfortunately, the season of giving is known for its extravagant spending — often times resulting in consumers overspending. A recent study revealed that nearly 27 percent of shoppers admit to spending more than they can afford to pay for Christmas gifts. If they stay on trend with spending this year it is possible that issues will arise. In March of 2022, even though inflation was up 8.5 percent, consumers had spent less over two years before according to an McKinsey study. The majority of Americans think inflation will rise a year from now than it is today. Car loan balances sit at as of November 2022. The monthly average payment for new cars during the 2nd quarter 2022 period was $667. The median monthly payment for used vehicles during the second quarter of 2022 was $515. The number of new vehicles sold dropped from over 16.9 million in 2005, to a low of 1.9 million during the recession. The survey found that 41 percent Americans aren’t sure if they’re prepared for a recession , if it was to occur before the end of 2023. 38.22 percent of consumers purchased new cars during this second quarter.
Statistics on holiday shopping Many shoppers fall into the trap of wanting to get the perfect present, which could result in spending more than they budgeted for and even putting pressure on finances. Certain shoppers this year have a different perspective as three out of five choosing to save money, according to . This is a smart decision considering that the price of a consumer index was 298.1 in mid-November, up from 274.1 a year ago. Whatever your reasons for tightening your wallet this winter, now is a vital moment to think about the effects of overspending on all facets of your fiscal health. 40% of shoppers believe that rising prices will change the way they shop this year. There are nearly 30 percent better used car bargains in January. The majority of people are likely to use money-saving strategies during the Christmas season. The winter months bring an increase in people buying luxury vehicles and sports automobiles. 27 percent of people who shop for gifts acknowledge feeling budget stressed during the holiday season. The majority of people will spend less on gifts during the holiday season.
How to prepare for a possible recession in 2023? While drivers in 2008 were dealt a similar hand The predicted recession of 2023 carries many factors that people 13 years ago did not have to take into consideration. Most importantly, there are the ongoing supply chain issues that continue to raise costs for vehicles. Due to stock limitations, you likely won’t get the deals that drivers in 2008 were given. Fortunately, there are still several ways to be prepared when it comes to the personal finance of your vehicle and personal purchases. Use these suggestions to save money in a recession. 1. Only buy what you can afford The best way to make sure that you don’t get into a difficult financial spot when buying a car is to purchase only the amount you can be able to afford. Consider consider this amount while also factoring into the things that can build up over the course of the duration of ownership, such as trips to the mechanic, or fueling up at the pump. 2. Start building your emergency fund. Experts suggest that you be able to cover 3 to 6 months ‘ worth of costs. But pennies can build over time, which is why it is important to start saving as soon as possible. Even better, consider the idea of establishing your emergency fund in a — which you pay interest on. 3. While buying an electric vehicle can have a higher upfront cost, they can cost you less throughout the duration of ownership. A reduced number of trips to the pump can add up to thousands of dollars saved, so think about whether driving an electric car will fit into your budget and life style. 4. Be cautious when it comes to the long-term loan While a can be attractive, it is also accompanied by some risks. While signing up for an extension loan could mean that your monthly expenses are less however, this doesn’t mean you will spend more in the end — in fact it’s the reverse. A longer-term loan will spread the amount that you are required to spend over a longer period which means there’s more time for interest to accumulate. 5. Apply for loan preapproval While not all lenders provide the option of applying for a loan , it is one of the best ways to know your financial contribution to car ownership in advance. Loan preapproval is simply a way to ensure that you are able to lock in the monthly costs you anticipate prior to signing the”dotted line. By doing this you can determine if the car you’re thinking about buying will easily be within your budget. 6. Refinance your current vehicle If your loan exceeds your budget, you may prefer to refinance your current car to cut down on your monthly expenses. This is particularly true in the event that your credit score increased since you took out your loan or first agreed with an agent.
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Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of borrowing money to purchase an automobile.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain the confidence to manage their finances by providing clear, well-researched information that breaks down complex topics into manageable bites.
Auto loans editor
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