During the height of the pandemic, used car prices began to skyrocket. Used cars became a very hot commodity as new car production slowed to a halt and demand increased due to economic uncertainty. But now, as new car inventory keeps rising, the price of used cars is falling. What does that mean for consumers? How will it change their calculations? In this article, we’ll talk about how falling prices can be both a good and bad thing for you.
Buying a used car will be much easier.
For those who are looking to buy, prices going down is great news. Finding a reasonably affordable used vehicle should be much easier now than it was even just a few months ago. This will be especially true on the private-sale market, where you’ll assume more quality control risk but will probably find a great deal too.
This may not hold true across the board. While private sellers will almost certainly sell their vehicles to you for a lower price, dealers may not reduce their asking prices significantly. On top of that, interest rates are high, which can make car payments more expensive over the long run. However, you’ll still have more negotiating power as you’ll know that prices are going down. You can use your knowledge of the used car market to force sellers to give you a good deal on a vehicle.
However, you’ll have to sell a used car at those same prices.
The problem with prices going down is that it hurts sellers. Car markets have a natural pendulum effect, and currently, the pendulum has swung towards buyers. This means that sellers will get less when they try to resell their vehicles. If you have a vehicle that you want to get rid of, you might want to hold off for a bit.
The pendulum will inevitably swing back towards sellers, though. Over time, fewer sellers will put their cars on the market because they won’t get good offers for them. Supply will constrict, prices will go back up, and buyers will leave the market as more sellers reenter it. Supply and demand are a constant push-pull between buyers and sellers. If you’re looking to sell a car and want a good price for it, just wait. Eventually, that price you’re looking for will come back around.