prices for used cars remains high. (Photo by Joe Resnek)
By Josh Resnek
As supply line issues caused by the business slowdown during the pandemic eases, used car prices have come down from their COVID highs.
After sharp, steady increases used car prices started falling off in the summer of 2022.
According to Automoblog, rapidly falling used car prices may be the headline, but the reported drop is based mainly on the wholesale prices of sued vehicles.
The wholesale used vehicle price index by car type for October 2021-October 2022 reveals the following:
Average drop among all types – 10.6%;
Luxury Cars – 13.6%
SUV’s/CUV’s – 12.4%
Midsize cars – 11%
Pickup trucks – 8.4%
Vans – 6.4%
Compact cars – 6.1%
Despite the price drops, used cars aren’t necessarily more affordable.
Car dealers are paying less used vehicles doesn’t mean they lower their asking prices.
Despite the latest drop in wholesale prices, retail prices for used cars are still 7.2% higher than the same time last year, according to data from the Bureau of Labor Statistics, as reported by Automoblog.
The recent interest rate hikes have made buying a used car substantially more expensive to finance at higher striking points.
Inflation has also decreased overall affordability of used cars, according to Automoblog.
Is it a good time to buy a used vehicle?
Not really.
Actual sales prices have not gone down despite wholesale prices being chopped a bit. Now is about one of the most expensive times to buy a used car.
Why?
A competitive market, record average prices, high interest rates.
The drop in wholesale used car pricing has not yet benefitted to great deals being struck at your local used car lot.