Used car prices have been fluctuating for years – ever since the dramatic rise in prices in the first few months of the pandemic. Even today, the prices haven’t dropped back down to what they were before the pandemic started.
That said, there is some good news – the cost of a used vehicle is going down right now.
How much have they decreased, what can we expect going forward, and what’s the best time to head to your local used car dealership for your next car?
What’s Happening to Car Prices Right Now?
According to the Used Vehicle Value Index, wholesale auction prices for cars decreased by 2.7% between April and May 2023. They’ve also gone down by 7.6% from last May to this May, which suggests a general downward trend in prices.
Because wholesale auction costs affect retail prices, customers should see lower price tags on cars by July. While it won’t drop as far as the pre-pandemic averages, it’ll definitely help strapped-for-cash consumers as they look for vehicles in the summer.
But will consumer car costs stay down, or are we just looking at a temporary fluctuation?
What Should We Expect Next Quarter?
From March to May, prices have dropped, but does that mean they’ll still be dropping in June?
According to experts from Cox Automotive, it’s just too soon to tell. While there’s a year-to-year downward trend in used car prices, there have been enough dips and jumps in the last year to make it hard to predict month-to-month numbers.
“Two consecutive reads…do not a trend make,” Chris Frey, senior manager of Economic and Industry Insights at Cox Automotive, said. With used inventory still lower than last year and buyers remaining at auctions, prices aren’t likely to sink for long.
When Will Things Even Out?
Because things are so uncertain, it’s hard to say when used car prices will even out at local used car dealerships. The downward trend is likely to continue, but it will be a slow and stilted descent. Currently, there’s no end in sight.
So what does that mean for people who can’t afford to wait for things to stabilize? People still need used cars right now, which means looking for as good a deal as possible even when prices are this high.
When and Where to Get Your Next Car
According to Chris Frey, auction prices dropped from May to November of last year. So if that trend holds steady, consumers are entering the best time to buy a used car right now.
Give a few more weeks for the reduced auction costs to be reflected in retail prices, and then check out some local used car dealerships to compare prices and see how much you can save on a used car this summer.
And keep an eye out for next quarter’s reports to see if prices keep dropping!
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