New data shows that not only are used-car prices decreasing month by month, but also year by year, as the cost of buying a used car is now, on average, lower than it was a year ago.
Reporting by Moody’s Analytics says that “month-to-month declines have now turned into year-to-year declines, with the index below its previous year value for three consecutive months”.
Associate Economist Catarina Noro says the price on average for a used car is now 6.3 per cent lower than it was a year ago, with a 0.6 average drop between January and February.
Increased new-car availability is part of the reason for easing prices in the used-car market, though the problems caused by the pandemic in terms of supply issues still plague the industry, and used-car prices are still significantly higher than their 2019 equivalents.
“Our index in February is 59 per cent higher than during the same month in 2019, one year before the pandemic,” the report by Noro says.
“Nevertheless, we are expecting that used-vehicle prices will continue to come down during the next months, on the back of better supply-side conditions and as global growth slows down in 2023.”
As mentioned, some of the key issues in terms of supply from the demand continue to ease, with semiconductor availability on track to improve significantly.
“In December, the global semiconductor lead time – the time it takes for a semiconductor to reach the end consumer – had the largest month-to-month decline in several years, falling by one week to 24 weeks.”
Moody’s Analytics says it expects to see used car prices “fall by slightly more than 10 per cent over the year”.
Keyword: Wait months for a new car, or buy one now as used car prices continue to decrease? - report