It's been a bad time to buy a used car for the past *checks calendar* three years, but there's a glimmer of hope as we enter 2023. No, you still can't buy a year-old Ford F-150 for $20,000 off, but you're at least less likely to pay more for one than a brand-new unit. CarGurus reports that used vehicle listing prices dropped 2.5% from November to December of 2022 and 5% compared to the year prior. That's a lot better than the trend consumers are used to seeing by now with line graphs going up and to the right.
It's important to note that CarGurus specifies vehicle listing prices here. The online car sales site doesn't have any hard data on final, out-the-door pricing, but this indicates sellers are asking less off the bat. That's good news for people who'd rather not haggle back and forth until a dealer finally lands on a more reasonable figure. Indeed, the average listing price for a used vehicle has dropped back below $30,000, whereas the market average was $30,500 in November.
Vehicles from the 2020-2022 model years are actually seeing the biggest dip, with 2021 units declining more than 18 percent, according to the report. This is a significant change seeing as multiple models were commanding more money on the used market than their factory-fresh counterparts just last year. Cox Automotive's Manheim Used Vehicle Value Index shows wholesale prices dropping 15 percent in December, which means we're getting closer to pre-pandemic levels.
"While that [15 percent] decline was the largest in the series' history, compare that drop to the overall 88 percent increase in the 21 months from April 2020 to January 2022," said Chris Frey, senior manager of economic and industry insights at Cox Automotive.
A big part of it boils down to supply and demand, an area that's also trending in the consumer's direction. Both new and used vehicles are spending more time on the market these days, making price drops even more likely. A lot more cars were listed between $10,000 and $20,000 in December than before, CarGurus claims, painting a relatively bright outlook for budget buyers.
Not everything is moving in the buyer's favor, but it's fair to say the good is outweighing the bad for once. Vehicles cheaper than $10,000 are still few and far between, and older used cars from the 2010-2018 model years are losing value a lot slower—just 7% to 10% since July 2022. Even still, that's not terrible if you've been paying attention for the past two years.
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