Buying a car is expensive, but even in 2023, purchasing a used vehicle is still costly. So you’re probably wondering: “When will the price of used cars go down?!”
One of the best ways to save money on a car purchase is by buying a used car instead of a new one, but you may want to know when you might get the best deals on pre-owned vehicles. Read on to discover when used car prices go down (and why)!
In this post, you’ll learn why there are expected drops in used car prices and what signs to look for that signify which times of year promotional pricing may be available. Additionally, we’ll provide current data showing how much the average price has dropped recently so that you’re better equipped to plan your next vehicle purchase.
WILL CAR PRICES GO DOWN IN 2023?
The COVID-19 pandemic has brought about many economic impacts, with the automotive industry among the hardest hit. Used car prices have been rising for a long time, but recently, prices began to decline, and experts predict this trend will continue.
Why Are Used Car Prices Going Down?
One of the main reasons for this is the availability of new cars. The pandemic forced automakers to shut down production facilities, making releasing new models as planned challenging. The new car shortage ultimately led to shortages in the used car market, increasing prices. However, the situation has changed, and prices are predicted to continue to decline.
Another factor that could lead to decreased used car prices concerns government stimulus checks. During the pandemic, the U.S. government provided stimulus checks to help citizens overcome the economic challenges they faced. As the economy gradually opens up, people return to work, and their financial situations improve. As consumers make and save more money, they’ll be less likely to invest in used cars, which could force dealers to lower prices to attract buyers.
The market cycle also plays a role in fluctuating used car prices. For example, when new car models are released, the production of the former model ends, leading to a rise in used car prices in the short run. However, a few years down the line, those previous models become less popular, and their prices decline. Therefore, experts project that in 2023, we could experience a 10% drop in used car prices and a 2.5% to 5% decline in new car prices.
Despite these, there is still some uncertainty because of other external factors, such as natural disasters, changing rules and regulations, and fluctuations in the oil industry. However, used car prices are on a downward trend, and if you’re looking to purchase one, then each day that passes may increase your bargaining power.
WHEN ARE USED CAR PRICES GOING DOWN?
As a car buyer, the timing of your purchase is crucial to getting the best deal possible. Used car prices can fluctuate depending on multiple factors, but there are some common timeframes when prices are expected to decrease.
- 1. A good time to buy a less expensive used car is around the end of each calendar year. This is because many car dealerships are motivated to sell their current inventory before the new year models arrive, so they may offer discounted prices on used cars to make room for the new models.
- 2. Another time to consider is when a more recent version of a particular model is released. This often leads to a decrease in the price of older versions of the same model as people opt for the newer option.
Considering these two timeframes will save significant money on your next used car purchase.
HOW MUCH WILL USED CAR PRICES DROP?
We know the world of used cars for its ups and downs, and 2020 was no exception. However, there’s some good news on the horizon for car buyers.
As the pandemic continues to depress new car sales, the supply of used cars will grow, causing used car prices to drop. Anticipating these drops, car manufacturers are cutting back production, meaning consumers will have more choices in used cars.
Some experts predict used car prices could fall as much as 10% by the end of the year. This is excellent news for anyone in the market for a used car, as it means more affordable options. So whether you’re looking for a vehicle for your daily commute or a road trip, there’s no doubt that the expected drop in prices will impact consumers positively.
While predicting the future of used car prices might be challenging, the data suggest a downward price trend. The recent price decline, the increase in new car production, and the changing market cycle all support the prediction of future price drops.
As the economy recovers and more people return to their jobs, the demand for used cars will decrease, which could drive dealers to adjust prices to stay competitive. However, a need for a car will always exist, making purchasing a used vehicle a reasonable and handy solution to keep costs down.
If you need help finding the best car insurance coverage for the best price, start by speaking to a SimplyIOA agent at 833.872.4467 or get an auto insurance quote online now.
