Used car sales seem to be finally returning to normal patterns after years of disruptions, with signs of stability found in lower prices in multiple categories of used vehicles, recent commerce data indicates.
Edmunds describes the signs of returning stability as “encouraging” in its Used Vehicle Report, following years of automotive market turmoil after the COVID-19 pandemic and ensuing supply chain issues.
According to the study’s findings, average transaction price or ATP of used vehicles fell by 5.5 percent in Q3 2023 compared to the same quarter a year ago. As recently as August, used cars priced at under $20,000 had shrunk to just 12.4 percent of those on offer, rather than 49.3 percent in 2019, so the falling prices do seem to be moving the used car market in the direction of historic norms.
Another key indicator, the price difference between new vehicles and almost-new used vehicles, is growing larger. Ordinarily, even small amounts of use cause a new vehicle’s price to drop significantly, but a “nearly-new” used car costs almost as much as its showroom counterparts during recent auto market disruptions. Now, there is an average $13,686 price difference between and under-3-year-old used car and the same model brand new. For September 2023, used cars up to 36 months old or newer saw prices fall 4.8 percent year-over-year.
However, not all signs point to a rosy picture for a stable pre-pandemic used car market’s return. Demand continues to be extremely high, with pre-owned vehicles snapped up rapidly as soon as they come on the market. This continues to have several important consequences on price and availability.
High demand is keeping prices pumped higher for the sector, to the tune of roughly $10,000 higher cost for a given age and mileage combination in 2023 as compared to 2019. Additionally, because newer, lower-mileage vehicles are bought up quickly, the average used offering today is considerably older and has notably higher mileage than was the case four years ago.
However, the director insights at Edmunds, Ivan Drury, still struck an overall note of optimism, observing that “both dealers and consumers should benefit from the lessening of market turbulence as pricing and transacting can be handled with less risk.”
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Comments
Still a mess of the market. Until prices of new vehicles come down, either through price drops or incentives, the market will stay in this quagmire.
Thats happening too, though In a different way. OEM’s are using high prices to court investment, so what we are seeing is low Interest rates through GM financial. They loose a ton of money by letti v you pay for it 400$ at a time. I hate that game because Insurance and taxes eat you alive even though the car payments are lower. We might be 2-3 years out on high MSRPs,
Or option 2 is the prices remain, and stagflation takes hold
insurance is becoming insane. i feel like im 17 again with 6pts on my license………
When your insurancing vehicles that cost as much as that poster you had on your wall as a kid, yeah 🤮
Just last week I paid $1000 for 6 months of full coverage on a 2014 Impala Limited. I have an illegal right turn and caused no accidents this century.
Wow, that’s huge, I pay about $675 for 6 months of full coverage on all 3 of my vehicles combined! A 19 Equinox, 12 Silverado, and an 09 G-6. No chargeable accidents since 1978.
After totaling a deer and his excellent 2009 Vibe AWD two weeks ago, my son had to purchase a replacement used car. We were shocked at the high prices and limited availability of good used cars with reasonable mileage under $10k.
The market did not show signs of “normalcy” to us.