The rising prices of used vehicles may be a good thing for those looking to sell, but it’s quite another story for buyers. When will the market get back to normal? Is that even possible? You might want to know what analysts are seeing in their crystal balls.
Based on its latest data and analyses, consulting firm KPMG told Automotive News that the average used car price will fall about 20-30 percent in late 2022 and early 2023. By then we should see a return to a normal gap with the average new car price.
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Obviously, it all depends on vehicle supply—and the ongoing chip shortage, among other factors. But even if new car supply catches up to demand only toward the end of next year, KPMG believes that used car prices will begin to fall before then. Why? Because dealers will “anticipate the turnaround in the new car supply situation ahead of time and start repricing used cars before new car lots are full.”
A bit more optimistic, Cox Automotive expects used car prices to peak for a final time between January and April 2022, after which they will slowly go down. How governments and reserve banks step in to curb inflation will be key.
As we reported earlier this month, used vehicles gained nearly 45 percent value from November 2020 to November of this year according to Manheim and Black Book. Customers who couldn’t wait until prices return to normal levels will have significantly overpaid.