The price of the average used car has declined for the first time since last February. At the end of January, the average used car in America sold for $27,633 – down $572 from where it stood in December. The decline is the first in a calendar year.
The move mirrors a change in the new car market, which also saw a price drop in January.
That price is still 29% higher than in January of 2021.
Improving supply gets credit for the change. America’s car dealers had about 2.55 million used cars for sale at the end of January. That’s a slight improvement. They had 2.38 million one month before.
Maybe Not for Long
More cars available for purchase means lower prices, but that trend might not hold for long. There is traditionally a demand surge around tax time.
“Used vehicles are starting to see some inventory build-up ahead of the prime selling season as tax refunds come in,” explains Charlie Chesbrough, Cox Automotive senior economist. “The inventory volume and days’ supply are both above last year, though sales remain low. Spring should see strong demand.”
Cox Automotive is the parent company of Kelley Blue Book.
Cheapest Cars Still Hardest to Find
Shoppers looking for an inexpensive used car still face the greatest challenge.
A slowdown in the new car market means a shortage of used cars years later. After the 2008 recession, Americans bought fewer new cars for several years. That leaves dealers short on the older, higher-mileage used cars they sell for lower prices.
Car dealers measure their supply of available used cars in a metric they call “days of inventory” – how long it would take them to sell out of cars at the current sales pace if they didn’t acquire any new ones.
The lowest price segments — under $15,000 — had the lowest inventory and lowest days’ supply at under 40. Price segments from $25,000 and up had the biggest supply in both volume and days’ supply — between 61 and 69 days’ supply. In between segments had between 49 and 57 days’ supply.
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February 22, 2022 at 11:05PM
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Average Used Car Price Drops - Kelley Blue Book
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