Used vehicles have been in high demand since the pandemic and now the demand for used cars is dropping. Part shortages have made it difficult for manufacturers to keep up with new car demand resulting in soaring prices for new vehicles. The soaring prices have also caused many people to reconsider used vehicles. So before you buy, you should know if the used car market is still hot.
Are Used Cars Prices Dropping Now?
If you are wondering when will used car prices go down, the answer is in 2023. You should begin to see drops in the cost of a used vehicle at the beginning of the year. Supply chains are now back in force, and new car vehicle production has significantly increased.
However, there are a few things to take into consideration.
Higher Interest Rates May Negate the Used Car Price Drop
Interest rates have been steadily rising throughout 2022. This will have an impact on the overall cost of your vehicle. Even though used car prices have been decreasing, the increase in interest rates means that you could actually still pay more for a vehicle than you would have a year ago.
To protect yourself from this problem, make sure that you can put a down payment on the vehicle and keep the payment terms as short as possible while staying within your budget. The longer the term of the vehicle, the more you will have to pay in interest charges.
Used Cars Prices Dropped – But Still Seem High
One of the reasons that used vehicle prices continue to seem much higher than many people anticipate is that new vehicle prices have increased so much. On average, a three-year-old used vehicle costs about 20 percent less than a brand-new version of the same vehicle.
When you consider that new car prices have skyrocketed, you can see why it almost feels like you are paying full price for a used car. Sedans and pickup trucks have seen the highest increases as new vehicles, so you can expect to see these costs reflected in the price of used sedans and trucks.
When Will Car Prices Drop Again?
You should see the cost of used vehicles continue to drop during 2023. Depending on many factors in the economy, you may also see new vehicles decrease, which will help used prices drop even further.
However, since it is impossible to predict this far in advance what will take place, you should focus on getting the best deal for your money.
Buying a Used Vehicle
When you are shopping for a used vehicle, it is important to shop around for the best deal. It may even be in your best interest to shop outside of your local area. Take advantage of the Internet and look for the vehicle you want. You will be surprised at the price differences between different dealers and in different areas of your state.
If you are purchasing from a car lot, make sure that the vehicle is a certified used car. This ensures that the vehicle is in the best condition and is factory-approved for sale. Many of these vehicles still have the original warranty available on them, making them an even better purchase.
Of course, look for low mileage. Buying a certified pre-owned vehicle often ensures lower mileage and wear and tear on the vehicle.
If you are purchasing from an individual or a private dealer, make sure that you request a car history report on the vehicle before purchasing. This will give you all of the information you need about the car to make an informed decision.
If possible, put as large of a down payment on the car as possible. This will reduce your monthly payments and how long you will need to take out a loan. Shop around for the best interest rates and loan terms before purchasing the vehicle. This will help you keep costs down.
If you are ready to purchase a used vehicle but are not sure if the price is good, check online. Several sites will give you a value for that type of vehicle. You can see if the price is around that amount to ensure it is a good price.
A final thing to do before purchasing a used vehicle, if it is not a certified pre-owned car, is to take it to your preferred mechanic. Have them look over the car to make sure that you will not be surprised in a few weeks with a major repair.
Have Used Cars Prices Dropped – Final Thoughts
Yes, prices have begun to drop, and you should see more savings throughout 2023. However, increased new vehicle prices and increased interest rates may still make it feel like prices are high for used vehicles. The best thing to do is take your time and shop around so that you can get the most from your money.
Always remember to run a VINsmart report on any used vehicle before making a purchase. A VINsmart report runs a complete history on the vehicle including whether it has ever been reported as stolen, involved in a major accident, or listed as a totaled vehicle.
VINsmart reports will also give you a registration history and mileage at registration. It reports any significant incidents related to the vehicle, such as being involved in a fire or flood.
When you are purchasing a used vehicle, the best way to ensure you make a good purchase is to know the vehicle’s complete history.