Used Car Prices Fall
(AmericanProsperity.com) – The car market has seen huge turbulence over the last couple of years, with supply chain disruptions pushing up the price of new vehicles and dragging used car prices along for the ride. The price of used cars is finally falling again, but consumers aren’t seeing the benefits yet.
— The Hill (@thehill) November 7, 2022
During the COVID-19 pandemic, problems in global supply chains left automakers short of the computer chips modern vehicles need. With new cars in short supply, demand for used models went through the roof, causing massive price inflation — up to 50% for some brands. The latest figures show that wholesale used car prices are now heading down again, but that effect hasn’t reached the retail market, and buyers are still suffering from rising prices.
According to the Manheim Used Vehicle Value Index, which tracks the secondhand car market, the wholesale price dealers are paying for used vehicles in October is down 2.2% from September and a whole 10.6% from this time last year. However, while that’s good news for dealers looking for cheap stock the picture for buyers is nowhere near as rosy. In fact, retail prices were up 7.2% last October — a high enough spike that, unusually, used car prices contributed to inflation. Now, drivers are paying more while dealers are making higher profits.
Are the dealerships profiteering, or is this just a case of effects taking time to work through the system? Right now, many of the used cars for sale have come at high wholesale costs, and dealers want to make a profit on what they paid. Will retail prices fall as that expensive stock gets sold off and cheaper vehicles come on the market?
~Here’s to Your Prosperity!
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