Used Car Prices Have Finally Gone Down
Used car prices are down and inventory is up after a period of strained used vehicle supply.
Written by Andrew Kidd
Reviewed by Kathleen Flear
Table of Contents
Looking for a new-to-you vehicle? Despite popular cars still selling fast, you might be in luck as industry analysts note that
used car
prices are finally cooling off after a too-hot couple of years.What could be driving that decrease, and which cars are seeing the steepest drops in price?
A glut of used inventory
Per
Kelley Blue Book
, used car sellers in the United States have more vehicles to offer than they did a year ago—and it's starting to help bring down the often exorbitant pricing we've seen earlier in 2022.In August 2022, the average sale price of a used vehicle was $28,050—a drop of $158 from August 2021. And despite a late-summer rise, used car prices are on their way down. While new car prices continue to grow, used car prices are falling.
Per industry analysts cited by KBB, used car inventory at the end of August was up about 10% over the same time in 2021, indicating some relief to a strained supply of used vehicles.
Analysts observed that the used car supply is starting to track at normal levels. At the end of August, dealers had approximately 2.46 million used cars to sell across the nation—about the same number as they did at July's end.
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Prices may keep dropping
In August, dealers paid around 4% less for used cars at auction—the largest one-month wholesale price drop since the outset of the COVID-19 pandemic.
August used car sales were 9% slower than the same month last year. With the drop in wholesale pricing, used car buyers could see a more forgiving used vehicle market in the fourth quarter.
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Shop around
While these are average price drops across the industry, the situation varies from dealership to dealership.
Honda and Toyota dealerships are experiencing a shortage of vehicles both new and used; Honda dealers reported a used vehicle supply of 41 days in August, while Toyota dealers reported 42 days.
Hyundai reported 44 days and Kia reported 46 days. Domestic automakers, on the other hand, reported higher supply in general.
When you break it down by price range, the sub-$10,000 segment has the smallest supply at 31 days, which is one point less than a month ago. For the $10,000 to $15,000 segment, the days of supply decreased from 37 to 36.
Vehicles between $15,000 and $30,000—the majority of available units—had 51 to 53 days of supply. Pricier used vehicles above $30,000 have 55 to 61 days of supply.
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