David Paul Morris | Bloomberg | Getty Images
The prices of used cars seem to be stuck in high gear despite low consumer demand.
Last month, sales of used cars under 10 years old were 27% lower than in March 2021, according to the car shopping app CoPilot, which tracks dealership prices across the country. At the same time, the average price jumped 40% to $ 33,653.
For almost all new cars – those 1 to 3 years old – sales in March fell 31% from a year earlier, with an average price of $ 41,000 37% higher, CoPilot research shows. In the first two months of 2022, prices in this age group fell by almost 3% before rising again in March amid continuing production challenges for new cars and uncertainty over the war in Ukraine.
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The result is that consumers are taking their time to buy a used car. The average time spent searching for one has increased from 89 days in March 2021 to 93%, reaching 171 days, bringing the inventory of 1- to 3-year-old car dealers back to pre-epidemic levels.
However, prices are not falling because dealers are facing less supply of new cars and many new car buyers may end up with a used car instead, according to CoPilot.
Co-pilot CEO and founder Pat Ryan said, “Lots of empty new cars across the country, dealers are keeping the price of new used cars high.”
Pre-epidemic, roughly 76% of vehicles will be sold for less than $ 25,000. Now, cars in this price range are only 35% of inventory. Meanwhile, prices above $ 40,000 are 25% of what is available in the dealer lot, compared to 5% in a typical year.
“The car’s consistently high-priced silver lining is what allows consumers to sell an extra car [an] Opportunity to cash in at 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 cars for a profit,” he said.