Posted on 12/09/2021 11:12:22 AM PST by blam
Those holding off on purchasing a used car, expecting prices to come back down, might be in for a surprise. A new Cox Automotive report said used car prices may never return to pre-pandemic levels.
Philip Nothard, insight and strategy director at Cox Automotive, said used car prices show no signs in reversing as there is no “tsunami of used stock” on the horizon and warned secondary markets had lost around 1.4mln vehicles. He said prices might stabilize in mid-2022 as the market reverts to some normalization but said a new benchmark for used vehicle values has been established and may never return to pre-pandemic levels.
Nothard said the lack of supply and snarled supply chains of new cars “will, without a doubt, have a bearing on the sector for years to come.”
Nothard said: “Back in July, we asserted that the used car market has never been more critical to the overall health of the automotive industry than it has been in 2021. The last few months have given more weight to this suggestion.”
“While prices have now increased for eight consecutive months, recent signs point towards a potential softening in the market. And while it remains the case that prices overall have continued to rise, the situation is becoming increasingly complex, with some models starting to see significant price decreases.
“Moreover, some figures we’ve observed are misleading, as it doesn’t represent live market data where many models that saw an increase at the start of the month, which dropped off by the end.
“It’s important to remember in the final month of the year that this is traditionally a slow period as retail activity slows ahead of Christmas. Prices are expected to drop in line with usual market cycles, so current prices still reflect a high demand with a low supply market. With prices as they are, dealers are becoming increasingly cautious, but as the year draws to a close, they will require stock for the new year, so prices are unlikely to drop significantly.
“We expect current market conditions to continue throughout Q1 2022, and it’s entirely possible that we are seeing a revised benchmark for the used vehicle.”
Manheim’s wholesale used car indicators showed that vehicle prices increased by 3.9% month-over-month in November. This brought the used car Manheim Used Vehicle Value Index to 232.5 (a new record high), a 43.5% increase from a year ago.
The Manheim Market Report said, “values saw weekly price increases decelerate and reverse over the course of November.”
As used car costs continue their vertical move higher and might never revisit pre-pandemic levels, this suggests the used car component of the Consumer Price Index (CPI) has more room to rise in November. CPI will be released on Friday and is expected to provide an update on the state of inflation that is now deemed persistent inflation as Fed Chairman Jerome Powell said last week it was time to retire the narrative “transitory.”
Consumers will have to get used to paying high prices for used cars. This will affect the working poor, the most, who have had their credit scores tarnished during the pandemic downturn. Thanks, Powell.
Queue the next Cash For Clunkers proposal from our always wrong president.
Looking at the chart, used car prices have only returned to any prior level once since 1995, and that was in 2009. So it’s no surprise they won’t return to pre-pandemic levels.
Wasn’t 2009 cash for clunker year?
duh..
even with out the new car shortage there is inflation.
I’ve been trying to source parts for a couple of different cars all week. It’s getting really tough to find anything, much less get here in less than 3 weeks.
We are so backed up, I’m not sure catching up is even a possibility anymore.
AS someone very familiar with the auto industry I disagree with the premise of this article.
Used car prices are up because there is a shortage of new cars due to the scarcity of micro chips. As soon as production returns to normal on new cars the price of used cars will decline.
Remember Mohammed Obola’s “Cash For Clunkers” Program, where hundreds of thousands of perfectly good cars were senselessly destroyed with acid?
I predicted the US car market would never recover from that absolutely vile man’s intentional harm of American families who could have benefitted from the use of those cars.
Unfortunately, I was right.
Think of how much of a difference it would be had we NOT destroyed all those functional cars.
The democrats are truly Satan’s children, and I hope the Divine Wrath of Almighty God is upon their nasty heads soon enough.
https://m.youtube.com/watch?v=qTYL-h5_hb4&t=3s
https://m.youtube.com/watch?v=EjwQECLvIKE
https://m.youtube.com/watch?v=X0IcIxhd8ks
Just wait until new ICE-powered cars stop being produced by the major automakers in favor of Auto-by-Mattel.
I saw a blurb the other day that in Western States (think where conservatives live) people are buying up old school American Iron. My guess is full framed, waggoned axled, Small Block V8’s w/ 1st or 2nd gen EFI, stuff they can fix with the least amount of computers. They see $h!t that we don’t and want to be prepared and they don’t want to get sucked in the EV vortex and will do anything to hold out on it IMHO...
The Democrats will Rig Everything now until they’re sent to Prison
I’ve been trying to find headlights for my 13 Lexus GS 350 F Sport for months. When I do find them, the asking price is $3,000+ a pair.
“Used Car Prices May Never Return To 2019 Levels...”
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What will I ever be able to buy at 2019 levels?
Well, I guess I will be keeping my 2007 Ford E350 V8 for a few more years. Need to tighten up the struts though, they are starting to wiggle a little. Not bad for 199,000 miles though.
That’s kind of a silly statistic.
The used car prices are only skyrocketing because new models are in short supply.
Most people I know are reducing the number of cars they own because they’re all working from home and it’s cheaper to just share the one car then maintain insurance and payments on 2
The was a move to get rid of vehicles without tracking devises
When they say “used car market/stocks” are they referring to used car dealerships, private sellers or both?
Because their are plenty of used cars available from private sellers in So. Cal.
I have never understood why somebody would purchase a used car from a “dealer” since typically it is comes as is without a warranty, or only comes with a 6 month limited warranty or an extended 1 year warranty for an inflated price.
There’s a whole lot that will never be the same as it was in 2019.
With Biden demanding new cars have breathalyzers and remote kill switches installed, older cars will remain at a premium.
The price of new cars is going to skyrocket with the mandated electrification (hybrid and battery).
This will cause more owners to hold onto their current vehicles, driving up used prices even more.
The auto industry could be heading for rough times ahead.
I drive my 1993 Ford Ranger (257,00 miles) every day.
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