The used-vehicle market, upended during the pandemic when new-car prices soared, is stabilizing, according to a new report.
Though the used market’s days’ supply was flat in October, according to Cox Automotive, a new report by Edmunds shows average sale prices fell about 6% year-over-year in the third-quarter in what it called a “course correction.”
"Q3 showed signs of a return to normalcy in the used car market, albeit at still-elevated prices," said Edmunds Director of Insights Ivan Drury. "Both dealers and consumers should benefit from the lessening of market turbulence as pricing and transacting can be handled with less risk that a vehicle's value will move sharply in either direction over a short period — as was happening throughout the past few years."
Edmunds said the revival of new-vehicle inventory has rewidened the gap between new and used pricing. It said the average price of vehicles 3 years old and newer was a little under $14,000 less than the average new-vehicle price, compared to the first-quarter 2022 gap of only about $9,000.
Edmunds said seasonal price shifts are also making a comeback, with familiar depreciation patterns, for instance, the least depreciated models being those whose supply is lower or that have limited competition, such as the 2021 Toyota Tacoma and Chevrolet Camaro.
Despite the stabilization, Edmunds said used inventory tends to be older, with higher mileage and short time on the lot. In fact, age and mileage were still up over prepandemic 2019 levels across price segments. “Shoppers who bought a used car in 2019 would need to increase their budget by nearly $10K to obtain a vehicle of a similar age and mileage today,” it said in its report.
In October, used days’ supply was an estimated 49, and inventory stood at 2.3 million, Cox reported.
Originally posted on Auto Dealer Today