Paris expects inventory constraints to drag on through 2022, but he said production should begin recovering toward the end of the year. The state of new-vehicle production and inventory impacts how long used-car prices will remain elevated. Power saw a “small pullback on prices summer,” but it proved short: “Since that point in time, we’ve seen steady increases throughout the close of the year.” “As soon as January 2021 rolled around, used prices began a rapid increase, which lasted through the summer selling season.” “I don’t think anyone expected the supply-chain disruptions that we experienced on the new side of the market, which ultimately sent used prices to the moon,” Paris wrote in a January email to. Power, says the disruptions to new-vehicle production are to blame for this drastic jump in used-car prices. Fast forward three years, and the median price of a used vehicle is now 61% that of a new vehicle.ĭavid Paris, senior manager of market insights at J.D. In the same span, the savings when buying used instead of new also evaporated: In July 2019, the median price for a used vehicle of any model year was 49% that of a new vehicle. By July 2022, that median price jumped 37%. Since then, prices have remained elevated compared to previous years but have seen a modest dip in recent months: The median price for all used models was approximately $24,000 in July.īefore any COVID-19-related disruptions, the median price for a used vehicle among dealers in July 2019 was approximately $17,500. Based on a price analysis of used-vehicle inventory among dealers, median used-vehicle prices started their ascent in January 2021, and after a steady upward trajectory, they reached a peak of around $25,500 in February 2022. But such savings are no longer guaranteed today. Buying Used Isn’t What It Used to Be photo by Christian Lantryīefore the inventory shortage, buying a used vehicle allowed shoppers to pay less for the same vehicle versus when it was new it also let them bypass new-car depreciation, traditionally estimated at 20% as soon as you drove the car off the lot. #BOOKPEDIA LOWEST USED PRICE PLUS#Expert forecasts say used-car prices will parachute down over the next couple of years, and with help from that - plus used-vehicle data - we outlined the key insights about the used-car market today, where it’s headed, and how shoppers can plan and finance the purchase accordingly. While it’s still possible to save on a used car versus a new one, shoppers should be prepared to pay a relative premium if they intend to buy used in the current landscape. Related: Should You Buy Now or Wait to Save on a Car? The inventory shortage, which began in 2021 and has dragged into 2022, initially impacted new vehicles, but skyrocketing demand and pricing soon followed for used cars. But over the last year and a half, nothing about the used-car market has been traditional. Budget-conscious shoppers are traditionally advised to choose a reliable used vehicle to avoid the higher price and initial depreciation on a new car. As the old adage goes, buying a used car will save you money.
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