Used cars lately are down from recent highs.
But in terms of long-term trends, used car costs are still particularly higher than they were before the pandemic. Notably, there is still a severe shortage of late-model used cars and trucks, reflecting the decline in new vehicle production since 2019. .
In March, the average used vehicle sold at wholesale auctions, reserved for dealers, totaled $14,603, according to auction company ADESA U. S. Analytical Services.
That’s down 10. 9% from March 2023, up 32. 2% from before the pandemic in March 2019, said Tom Kontos, lead economist at ADESA Auctions.
Used vehicle costs have most likely decreased in part because the supply of new cars has increased since last year. With new vehicle inventories rising, incentives to buy new cars are also returning modestly, meaning at least a slight improvement in the price of new vehicles. affordability.
In turn, this also means that fewer new car buyers are buying used cars and driving up used car prices. This was a strong trend in the recent shortage of new vehicles.
Aware of these trends, dealers have become more “selective” when it comes to buying used vehicles. They don’t need overly large and expensive stocks at a time when demands and costs are falling, Kontos said in a phone interview on April 26. .
“It’s a mix of traders reluctant to settle for current values while relaxing and reluctant buyers. If they don’t get the value they want, they vote with their feet and head to the [auction] route,” Kontos said.
On a separate conference call, also on April 26, to announce first-quarter results, Asbury Automotive Group of Duluth, Ga. , said it’s a challenging environment to find used and sought-after cars for resale.
“The truth is that from the onset of COVID, until two or three years later, several million cars that hadn’t made it to market were sold out,” said David Hult, president and CEO of Asbury.
“So now we’re in that organization where this year, and I think next year as well, will be a tougher year,” he said. “I think it’s the toughest year. “
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