With the rising cost of living and high-interest rates, practically all industries are struggling right now. The car market has been through a particularly turbulent few years with a serious supply issue and now the cost of living crisis is taking its toll as well.
How Inflation has Impacted Motorists
There has been a supply and demand problem in the car industry ever since the start of COVID-19, which is why the cost of both new and used cars has been incredibly high. This is now changing, though, with demand cooling significantly with the cost of living crisis and high-interest rates. As a result of this, many people are putting off big-ticket purchases and particularly decisions that will require credit.
What People Can do to Get by in 2023
While a car is a big ticket purchase, you will find that there are also some people that will need to buy a car in the new year whether this is their first car, they are in need of an upgrade or are keen to switch to an EV to make long term savings. One of the best ways to manage a large purchase like this during a cost-of-living crisis is to take out an equity release mortgage. How equity release works is that it allows you to free up money tied up in your home, which will be ideal for a large purchase such as this. An equity release mortgage should also alleviate the cost of living crisis in the new year and help you to maintain a decent standard of living. It is predicted that inflation will not start to come down until the second half of the year, so people will need to be smart with money throughout 2023.
Another option worth considering in the new year is leasing instead of buying a car. Leasing is less of a financial commitment, you will not lose money as a result of depreciation and it often works out to be cheaper than buying a car on finance. Leasing also gives you a chance to choose a brand new car and then upgrade to a newer model at the end of your agreement. If you want to try driving an EV before making a purchase, leasing is a smart way to do this.
The cost of living crisis is hitting the car market hard right now with demand cooling quickly after serious supply issues for the last few years. While many will be avoiding making a large purchase, there will be those that need to buy a new car in 2023. Hopefully, the advice in this article will be useful for these people and help them to make the right decision during what is a difficult period financially.