![]() ![]() Overall, sales were up 9% in the fourth quarter compared to a year ago, and nearly 6% higher than in the third quarter, according to Cox Automotive. Automakers are reporting more supplies of the chips they need, and are producing and selling more cars, including a return of fleet sales. With limited inventory of cars to sell, automakers essentially stopped making lower-priced fleet sales, and even rental car companies were forced to turn to the used car market.Īll that has started to change in recent months. That included rental car companies, which before the pandemic normally bought about 10% or more new cars per year. “At one point it seemed that everyone who was going to buy new ended up buying used,” said Greg Markus, executive vice president of AutoLenders, parent company of New Jersey’s largest used car dealership chain. The low supply of new cars caused an even bigger jump in the average price of used cars, as buyers who would otherwise buy new vehicles turned to the used car market. Parts shortages, especially for computer chips, had choked off production of new cars in much of 2022, causing the lowest level of full-year US new car sales since 2011. It was the lack of new car inventory that drove up prices. (KMX), the nation’s largest pure used car dealer, has warned that the combination of high prices and high interest rates is creating an affordability problem for many buyers, hurting overall demand.īut the leading reason for the drop in used car prices is the increased supply of new cars. While the prices of late model used cars are down only 5% off their peak according according to Edmunds, the price of older used cars, those five years or older, have fallen 15% or more from their peaks early in 2022.Įxperts say reasons for the decline include higher interest rates that make it more expensive to finance a car purchase, limiting demand. Today’s average used car price is about the same as the average new car price as recently as 2010. ![]() Data from Edmunds shows the average price of a used car purchase in December at $29,533, down nearly $1,600 from the record high of $31,095 reached in April 2022. ![]()
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