On the used car market? Consider holding out a little longer as prices fall for the sixth straight month

Used cars parked at a public car dealership.

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If yes in the used car markethere is the good news: Used vehicle prices fell by 8.8% in December 2022, according to the last consumer price index reading. That was the biggest 12-month drop since June 2009, CNN reported.

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Here’s the even better news: Used car prices still have a long way to go before they hit rock bottom — which means you’re probably going to be financially frustrated if you can wait a few months (or more) before buying one favor.

A new analysis by car-buying app CoPilot found that used cars were listed at an average price of $30,899 in December, marking the sixth straight month of falling prices. The average used car had a price premium of $7,146 or $30.1% above the predicted normal level. This represented a 7% decline from the previous month’s premium of $7,724, or 32% above forecast normal levels.

Overall, the average used car markup has fallen by 20% since January 2022. And according to the CoPilot report, prices “still have a long way to go” before returning to industry norms. At the current rate of price reduction, CoPilot estimates that it will take 10 or 11 months for prices to return to normal.

The main reason used car prices are falling so fast now – and are expected to fall further in the coming months – is that they have broken off historic highs. Demand in the used car market surged during the COVID-19 pandemic as supply chain issues slowed new vehicle production, CNBC reported. This forced many buyers to buy used cars, driving up prices.

But as supply chain problems have eased in recent years, production of new cars has increased, leading to higher inventories. Consumers now have the option to buy new rather than used cars, which has increased the supply of used vehicles and contributed to price declines.

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Waiting for those prices to drop even further before buying a used car has an advantage that goes beyond just getting a better deal on the upfront price. It also means you’re likely to get a better deal on the financing. As CNBC noted, the average interest rate on a used car loan is now 10.25%, up from 7.4% a year ago. The Federal Reserve’s expected easing of rate hikes this year means rates on auto loans will also fall.

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Hey, I am Sakib Hossain Sojib, an entrepreneur known as an SEO Specialist, Digital Marketer, Blogger, and Content Creator. I have a team of researchers who guide and review products for our audience to help them by providing valuable information to help our audience makes the best decisions for their needs. I love to take care of my cars. So, I like and enjoy car maintenance and automotive research. The provided content is based on my learning, research, and understanding of the topic and its concept. Our extensive experience in the industry allows us to offer unique insights and perspectives on the latest trends and products. We aim to educate and empower our readers by providing them with the knowledge they need to make informed decisions about their needs.

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