David Paul Morris | Bloomberg | Getty Images
Used-car prices appear to be stuck in high gear, despite slowing consumer demand.
Last month, sales of used cars less than 10 years old were down 27% compared with March 2021, according to car shopping app CoPilotwhich tracks dealership prices nationwide. The average price during that same time jumped 40% to $33,653.
For nearly new cars — those 1 year to 3 years old — sales in March were down by 31% compared to a year earlier, while the average price of $41,000 is 37% higher, CoPilot research shows. In the first two months of 2022, prices for this age group dropped almost by 3% before increasing again in March amid continued production challenges for new cars and uncertainty related to the war in Ukraine.
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The upshot is that consumers are taking their time buying a used car. The average time spent looking for one has jumped 93% to 171 days from 89 days in from March 2021, resulting in dealer inventories of 1-year to 3-year-old cars returning to pre-pandemic levels.
However, prices are not dropping because dealers continue to face low supplies of new cars and many would-be new-car shoppers could end up with a used vehicle instead, according to CoPilot.
“With nearly empty new car lots across the country, dealers have been holding prices of newer used cars high,” said CoPilot CEO and founder Pat Ryan.
Pre-pandemic, roughly 76% of vehicles would sell for less than $25,000. Now, cars in this price range account for just 35% of inventory. Meanwhile, those priced above $40,000 are 25% of what’s available on dealer lots, compared with 5% in a typical year.
“The silver lining to the continued high car prices is that it gives consumers with an extra car to sell [an] opportunity to cash in on record-high prices,” Ryan said.
“Our advice to used car owners is to take advantage of this once-in-a-lifetime trend and sell their vehicle at a profit,” he said.