The scorching hot used car market may finally be cooling off
July 22, 2021. Summarized by summa-bot.
Compression ratio: 24.5%. 1 min read.
A used car dealership is seen in Annapolis, Maryland on May 27, 2021, as many car dealerships across the country are running low on new vehicles as a computer chip shortage has caused production at many vehicle manufactures to nearly stop. (Photo by JIM WATSON / AFP) (Photo by JIM WATSON/AFP via Getty Images)
For months, used car prices have been soaring at an unprecedented rate. That has led to some strange situations, like people selling used pickup trucks for more than they bought them for a year ago and even cars with more than 100,000 miles gaining a lot in value.
Wholesale used car prices -- what car dealers pay for the cars they sell to customers -- fell in the first two weeks of July, while used vehicle inventories at dealerships increased, according to Cox Automotive.
In addition, the retail price of used cars -- the amount consumers pay -- has continued to increase, but at a slower pace over the past month, according to a separate Cox Automotive report.
While it's not certain yet, Cox Automotive analysts think retail prices will start coming down over the coming weeks.
Wholesale used car prices are also beginning to taper off.
According to a recent Manheim Used Vehicle Value Index report, wholesale used car prices, overall, are still up almost 25% compared to a year ago.