NATIONWIDE — If you’re in the market for a used car, prices may soon begin to ease.
That’s the upshot of a new sales data analysis from Cox Automotive. Despite used car prices hitting an all-time high in June, with the average listing price exceeding $25,000 for the first time, “the used vehicle market is showing small signs of improvement,” said Charlie Chesbrough, senior economist at Cox Automotive.
Chesbrough bases his prediction on an increasing supply of used vehicles at dealerships, coupled with slowing sales.
Used car supplies had been dropping month-over-month in 2021, hitting a low in mid-April but have been steadily increasing ever since. In June, dealers had more used cars in inventory compared with May.
June sales were also 13% lower compared with 2020, now that the effects of federal stimulus check money have worn off and spring buying fever has cooled.
Only a year ago, the average listing price for a used vehicle hit $20,000 for the first time. It has increased 26% since June 2020, hitting $24,414 in late May 2021 and $25,101 by the end of June due to an accelerating pace of inflation and a new car market, which continues to be constrained by both a computer chip shortage and increasing demand for used vehicles.
There is reason to be hopeful, however. Slower sales are allowing used car inventories to creep upward, Chesbrough explained.
“With wholesale prices of used vehicles beginning to retreat from record highs, the worst of the supply crunch in the used market may be behind us.”