If you’ve been watching used car prices, waiting for the right time to buy, you might have noticed that the prices are falling. This is good news, but the lower prices are only lower from the record highs we saw during and right after the pandemic. The good news is that if you’re in the market for a used car, car dealerships have used models that are now merely expensive instead of absurdly expensive. But is this just due to the winter season, or are falling prices the new trend?
The New Normal
As the effects of the pandemic continue to fade, the used car market seems to be on its way back to something that resembles normal, although the prices are still higher than before. The gap between the price of a new car and a used car became very narrow during the height of the supply chain issues, but it’s widening again.
Financing Still Leading to High Payments
While used car dealerships now have some inventory to choose from on average, they don’t have the 60 days worth of inventory that they aim for. And even though the prices of used cars are lower, shoppers are still feeling the pinch when it comes to financing. Interest rates rose significantly in 2023. In fact, rates are the highest they’ve been since 2007 as the Federal Reserve attempts to control inflation.
Will Used Car Prices Continue to Drop in 2024?
It’s tough to predict what will happen with car prices. Almost impossible, really. There are some indications that prices should be rising again, but they are not. Used car dealers paid less for used cars at wholesale auctions at the end of 2023, but with supplies still lower than average, why are prices still falling? This is mostly likely because new car prices are lower, too. New car prices remained relatively stable over the past few months due to concerns over the possibility of an auto workers strike. Discounts at Tesla also contributed to the new car price stability.
With new car prices improving, it relieves some pressure on used car dealerships, even if their supply is lower than where they ideally want it to be.
The Type of Used Car You Want Affects Price
How much used car prices will drop depends largely on the type of vehicle you’re shopping at used car dealerships for. Pickup trucks are some of the most popular vehicles, and they are selling for less at auction than they were just a year ago, and SUVs are also selling for less. Compact cars and midsize cars are down even more.
If you’re keeping an eye on the market and waiting for the best time to make your way to used car dealerships to make your next vehicle purchase, you’ll see lower prices. It’s just tough to determine if they will continue to fall or if now is the time to make your move.
This post may contain affiliate links. Meaning a commission is given should you decide to make a purchase through these links, at no cost to you. All products shown are researched and tested to give an accurate review for you.