Used-car prices continue to fall, down almost 5% from September and nearly 9% from a year ago, according to a report by iSeeCars.
Analysts say some of the used-car pricing declines come from an influx of new cars on dealers’ lots. Others predict prices will turn around as people receive their income-tax refunds.
“The used-car market has fragmented over the past year,” reports iSeeCars Executive Analyst Karl Brauer. “While prices are still higher than before the pandemic, they have consistently dropped over the past year and at an accelerated rate in the past six months.”
Brauer recommends dealers carefully consider models and pricing before buying at auction. Other analysts advise dealers to consider consumer preference data in their markets and look for alternative sources for used cars.
The iSeeCars finds the Tesla Model 3 saw the biggest six-month price drop: $11,302, or 21.5%, since September. Nissan Kicks prices declined $3,050 or 13.4%, while Nissan LEAF models dropped 12%, losing $3,072 in value. Those three models make up the top three used models with the greatest six-month drops.
AutoTrader Executive Editor Brian Moody told Wards Auto that many cars on the list are high-priced but that consumers are seeking low-priced used cars because of current economic uncertainty.
Kevin Roberts, director of industry insights and analytics for CarGurus, told Wards that the iSeeCars analysis of used-car pricing aligns with his findings. He reports that prices will ebb and flow as the market recovers from the “chip shortage and retail downturn caused by the pandemic.”
TrueCar industry analyst Zack Krelle reported that consumers’ search for affordable options includes their need for shorter loans, especially as interest rates for used vehicles approach 11%.
“While we are expecting a slight increase in retail prices to materialize this month, the longer-term trend has been down (about 10% lower year-over-year). The decreases have not been entirely uniform, with some pockets holding their value more than others,” he told Wards.
He added that many late-model vehicles saw the largest percentage decreases in pricing year-over-year.