Used Car Trends For 2023

Used car dealerships are starting to see prices fall as 2023 comes to an end. However, inventory is going down in some areas as overpriced cars at auction fail to sell. With used car prices still in volatile territory, it’s more important than ever to track the value of a car before you go out and buy and look at the used car trends for 2023.

Used Car Prices Are Dropping Again

There were previously roughly 30 consecutive weeks of prices dropping at used car dealerships thanks to prices going down at the wholesale level. In February 2023, the prices began trending up again, but they’re now going down. As of November, prices are going down across the board for both auctions and used car dealerships.

Prices are definitely dropping overall, but there are some price differences between segments. For example, prices in the truck and SUV segments are dropping by a higher percentage versus the car segments. This might be related to the sheer amount of models in the former segment, which results in more supply than demand.

Most car segments have gone down in November. Midsize cars decreased by almost 1% in seven days. Compact car prices have fallen by 10% in the last few months. In seven days, the light-duty truck segment saw prices go down by 1.12%. Compact vans went down by 2% in seven days.

Retail Car Prices Going Down Steadily

Used car dealerships are seeing prices drop in a slow and steady fashion. By September, retail prices for used cars had eliminated the previous jumps in 2023. Compared to the rest of the market, hybrid and EV prices remain higher, but the gap is getting smaller. The average price for an EV is now 14% over the regular market. That’s still a lot, but it’s less than the previous number of 20%.

Inventories at used car dealerships are holding steady and beginning to rise as many buyers hold off on purchases. The big problem here is interest rates. The average interest rate on a loan for a used car is beyond 10% now. Older cars are also appreciating faster than younger used cars.

This is a result of buyer demand. Buyers who want to purchase a car for less than $20,000 are being forced to look at older vehicles because the new ones have increased too much in value. This is a pretty unfortunate trend for a lot of reasons.

Average Used Car Prices

The trend for used car prices has been up since 2021. The average price for a used car in 2021 went from $22,000 in January to $29,000 in December. All used cars have two prices. Consumers are generally only aware of the retail price. But used car dealerships see the wholesale price. Those prices went up by 52% in 2021, compared to 36% for retail prices.

Now that we’re in 2023, the trends for used cars seem to be prices going down and inventories slowly going up as demand decreases. Truck and SUV segments have seen the largest drop, and EV models are also slowly going down.

As previously mentioned, it’s extremely important to track the prices of the car you’re interested in before visiting used car dealerships.