As 2022 came to a close, many drivers throughout the nation saw glimmers of hope in the used car market as auto prices for used cars, trucks, and SUVs across the board began to tick down. This trend in the right direction led many to wonder if the trend would continue into 2023.
While we’re well into the first quarter of 2023, hopeful car buyers are finding themselves with sticker shock yet again as prices for used vehicles have begun to tick back up. According to a report shared by CBS news, wholesale prices for used vehicles have jumped up a surprising 4%. With wholesalers paying a higher sticker price, those costs have been passed down to the consumer.
The rise in used car prices is surprising not only car buyers, but industry experts as well. Chris Frey, the senior industry insights manager at Cox Automotive, shared with CBS News, “We did not anticipate that prices would jump as much as they have,” adding, “It made my eyes jump out.”
There are a number of factors driving these prices up, with one of the main culprits being tax time. As many Americans prepare to receive tax refunds, dealerships are prepping by stocking up on used vehicles. While Americans usually have more funds to spend on big purchase items like a used vehicle, used cars are generally a little pricier this time of year. Some experts say this natural price hike could be one of the main reasons shoppers are seeing high prices for used vehicles.
The economy is also pushing prices of goods higher than expected. Inflation has impacted all industries, and the used car market is no exception. Despite unemployment being low, and businesses hiring at record numbers, woes of an economic recession looming has caused prices to be all out of sorts.
When Can You Expect Used Car Prices to Cool Down?
So as the price for used cars continues to rise for the foreseeable future, the question remains; when is the best time to buy a used vehicle? Many analysts suggest waiting until after spring specifically because it’s the end of tax season. As we enter the summer and fall months, you should notice the cost of a used car tick down, making this period a great time to snag an affordable vehicle.
Looking to Sell? Now Is Your Time to Shine
If you are looking to sell your used car, now is a great time to let it go. Specific models from automakers including Jeep, Hyundai, and Honda have done a great job holding their value over the past couple of years. If you missed the mark to let it go in 2022, this year might be the perfect year to get a nice chunk of change for your used car. Knowing your vehicle’s value through online tools like Kelly Blue Book is a great way to see your car’s worth and working with a local dealer you can trust is the easiest way to get back a healthy trade in rate.
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