Are Used Car Prices Dropping?

Giulia Nigrini
Giulia Nigrini
Vehicle Service Contract Specialist, Traveler, Car Enthusiast
August 14, 2023
min. read
car on the road with the blue sky in the background

The current trend is showing a decrease in used car prices. Not only that, but new car sales are also showing a decline while both have increased in sales. For the month of July used car prices dropped by 1.3% and by 5.6% year-over-year. 

Used car prices at wholesale auctions have also shown a similar trend in reduced prices. According to Manheim's Used Vehicle Value Index, which tracks the auction market, used vehicle prices declined 1.6% in July. Compared to a year ago, the index declined for the 12th consecutive month, based on Manheim's data.

Though we are clear of the woods just yet. The pandemic made an impact on the sale of cars as well as the retention of cars by drivers. Along with material and parts shortages, car repair costs also went up drastically. 

“From July 2020, there were 22 straight monthly double-digit increases through April 2022; we’ve had just six double-digit declines since October last year, with only four of them consecutive,” 

It will still be some time before we can say with confidence that prices are truly normalizing. For now, the trend seems to be that used car prices are on the decline along with more customers buying both used and new cars. There are still fluctuations in the economy that may influence car prices again. Car repair prices have not gone down which could ultimately influence buyers' behavior. Compared to July last year, vehicle repair costs increased 12.7% in July.

Several industry-specific trends can impact used car prices. Here are a few examples:

It's important to note that these trends can vary by region, as market conditions and consumer preferences differ across different locations. Keeping up with industry news, and market reports, and consulting local automotive experts can provide more detailed and region-specific insights into the factors influencing used car prices.

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