After two long years of shutdowns and business closures, and despite a looming recession, the economy is starting to get moving again. As a result, demand for buying used cars has soared as the cars themselves were becoming more rare.
Less new car trade-ins were put onto the market due to a chip shortage that slowed down sales of new cars. While this shortage is likely to continue into 2023, it has abated to some degree as factories ramp up volume and setup new fabs for production. Even so, it may not be until 2025 when new car production reaches pre-pandemic levels.
Also, as mentioned in the videos below, there is a lot of pressure on car buyers to just wait it out and let prices continue to fall as rapidly as they rose. This leads to less people trading in their older vehicles which leads to less used cars being sent to auctions. However, now with prices starting to fall into a downward trend, this could soon change in a few months as all those buyers that waited out the market will be flooding into car dealerships.
One type of auction that is still flourishing are government auctions, such as police auctions, because certain market conditions do not apply to their supply situation. Either way, it is not recommended for inexperienced bidders to buy a car at one of these type of auctions. They tend to be more for car dealers and auto mechanics who are prepared to perform a lot of work to a vehicle in order to make it road worthy.
Watch Video: Used Car Super Bubble Implodes Overnight
This video documents recent trends in used car prices and shows why prices are being pushed down for the first time in a while — indicating a decline in the used car bubble. These show good news for potential car buyers that have been turned off recently by such high prices.
He mentions Manheim’s Used Vehicle Value Index, which you can see here:
Pricing trend reports show parabolic movement as prices that were historically high earlier this year in 2022 have started to finally cool off as more supply is coming to the market. Bank repo lots around the country are now starting to fill up as moratoriums on repossessions have long since been lifted. These repos are now slowly being sent to car auctions around the US.
Has Used Car Market Prices Peaked?
This video also posits a near future decline in used car prices, but also mentions a few reasons why there is still going to be some pressure on the market(with factors such as rising interest rates) — so do not expect things to be quite as good for car buyers as they were a few years ago.
One thing she mentions is the Fed’s analysis of auto loan market delinquency rates. If the economy goes into a recession, there may be less buyers looking for cars — meanwhile, many more repossessed cars are likely to enter the market at auctions. This scenario will further lower existing prices of cars.
Meanwhile, you may check out what is currently at public car auctions and also dealer auctions online by viewing our list of Online Car Auctions. Most locations will allow you to view photos of the cars for sale just to see what auctions currently have available. You may also want to check out eBay car auctions and see what the prices are like on there.
How Much Cheaper Are Cars at Auctions
While used car prices as a whole are still inflated, car auctions are still relatively cheaper and are slowly obtaining more and more inventory back to levels before recent years. In addition to the videos above, we recommend this video for a detailed explanation from a seasoned car wholesaler on the current state of car prices at auto auctions. Overall, used car prices in 2023 should be much better for car buyers.
Last updated on September 17th, 2024 at 08:41 am
