Since used car prices rose during and after the pandemic, we’ve been waiting for the market to shift and for prices to fall.
We’ve seen a hint of falling prices, but many consumers are wondering if the used car market is heading for a reset. What will happen with prices for used vehicles during the last part of 2024? Well, here’s what you can expect.
What’s Going on Right Now
We first saw the prices falling on used vehicles at the beginning of the summer. And many experts think that things are just getting started. Recent used car market updates find that trade-in values and prices are softening as buyers wait to see what will happen with the economy.
June also brought one of the largest wholesale used car drop since the beginning of 2024.
Inventory Is Piling Up
With consumers slowing down their used car shopping, inventory started to pile up during the first part of the summer. In response to this, car dealers are hesitating to take on more inventory. The days-to-turn for used vehicles on a car dealer lot is at a five-year high. Since supply and demand drives the prices of used vehicles, when dealers have too much inventory, they mark vehicles down in order to attract buyers.
Interest Rates Are a Big Factor
The high interest rates affect the used car market in several ways. Not only do they prevent car buyers from taking out loans to buy used vehicles, but they also prevent consumers from spending money at all. Instead of going out and spending money, people are being careful with their finances, which means they are not going out as much or traveling as much. This means less miles and wear and tear on their current vehicles, so they don’t need to upgrade.
Used EV Prices Are Dropping Fast
While we are seeing the price of many used vehicles drop this year, used EV prices are dropping even faster. Automakers over estimated the popularity of EVs and built more than consumers ending up buying over the past few years. This left them with more EVs on their lots than they could sell. Used EVs prices have dropped 36 percent over the past two years, with some of the best deals found on used Teslas.
If you’re on the hunt for a Tesla, you can find a used Model 3 for under $27,000 and a used Model S for about $32,000.
The Cyber Attack Factors In
One thing that used car dealers did not take onto consideration in the first part of the year was the cyber-attack. This situation did not just impact the new car market, it also had an impact on the used car market as well. By fourth quarter, dealerships will have all their record-keeping back in order, but the blip in the system changed the market and we are still feeling the effects.
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