Viewing 1 post (of 1 total)
  • Author
  • #45541

    Our top picks

    Top Picks
    Tips and guides


    My NerdWallet

    Used Car Prices Are Dropping What Does That Mean for Car Buyers

    Advertiser disclosure You’re our first priority. Every time. We believe that everyone should be able to make financial decisions without hesitation. And while our site does not include every company or financial product that is available on the market however, we’re confident that the advice we provide as well as the advice we offer and the tools we create are objective, independent, straightforward — and free. How do we earn money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on our site) However, it doesn’t affect our suggestions or recommendations, which are grounded in hundreds of hours of research. Our partners cannot pay us to guarantee favorable ratings of their goods or services. .

    Used Car Prices Are Dropping What Does That Mean for Car Buyers
    The prices of used cars saw a huge decline in December, but buying a car now can still be prohibitive for certain buyers.
    by Whitney Vandiver Writer | Car ownership, car maintenance Whitney Vandiver writes for NerdWallet about ways car owners can save money on ownership as well as maintenance. She previously wrote in the petroleum and gas industries, where she was recognized in national newspapers as well as international magazines. Whitney started writing because of love and believes that stories that celebrate or assist the LGBTQ+ community the most satisfying to create. In her spare time, she enjoys walking, reading, and walking her Irish wolfhound. Her home is in Houston.

    Feb 1 Feb 2023

    Edited by Julie Myhre-Nunes, Assistant Assigning Editor Auto loans Consumer credit, auto loans Julie Myhre-Nunes is an assistant editor assigned to NerdWallet. She has worked in the field of personal finance for over ten years. Before being hired by NerdWallet, Julie oversaw editorial teams at NextAdvisor, Red Ventures and Quote.com. Personal finance insights from Julie have been highlighted by Forbes, The Boston Globe and CNBC through the years. Julie’s writing has been published in USA Today, Business Insider and Wired Insights, among others. Email: .

    A majority of the products we feature come from our partners who pay us. This impacts the types of products we write about and where and how the product is featured on a page. But, it doesn’t influence our opinions. Our opinions are entirely our own. Here’s a list of and .

    After more than a year of overheated prices The used-car market began to cool by several temperatures in December.
    The new trend offers some relief to car buyers. However, inventories have not yet reach pre-pandemic levels, and consumers still miss the purchasing power they enjoyed in the year 2019.
    While experts say the used car market for this year is expected to continue to grow the consumers must have realistic expectations about what car buying will look like in 2023.
    December saw a record decline in used car prices
    According to a report published in January 2023 from CoPilot which is a personal app to help you buy a car, used-car prices decreased in December for the sixth consecutive month, dropping 8.8 percent from January 2022. For a better understanding this was the biggest annual drop the used car market has experienced since the last month of the Great Recession in June 2009.
    However, they’ve left a long way to go before they’re within the same territory as they are today — the average used-car price still rang in at 30.1 percent higher than the market average.
    It’s a market that’s experiencing “more of a slow returning to normal than what is typically declining,” says Joseph Yoon an analyst for consumer insights at Edmunds, an online car guide. “The prices are still very highly, extremely overvalued.”
    Interest rates still hamper used-car affordability
    One factor that has influenced the prices of used cars has been the Federal Reserve’s abrasive interest rate hikes in response to inflation rising.
    According to Edmunds the average cost of a used-car loan increased from 8.76 percent in July, to 10.25% in December. As loan rates become more expensive people who finance vehicle purchases will find they’re paying higher fees vehicle, despite lower prices on the sticker.
    What this means for car buyers
    Consumers planning to buy a used car this year might be relieved to see lower costs for windshields but will still find they have to navigate a distended car market. Potential car buyers should anticipate various trends when looking for a used car this year.
    Cheaper prices compared to 2022
    As demand for used cars decreases, prices will remain in decline. As per J.P. Morgan Research, prices for used cars could fall as much as 10% to 20% in 2023. Should it is the case that the Fed continues to raise rates of interest, prices for vehicles are likely to continue their downward trend.
    However, not all cars will be priced at the same time. Smaller cars and pick-ups have seen the least changes in price since January 2022, according to Cox Automotive, an auto data company — while the luxury vehicles and SUVs have had the largest price drops.
    In the event of a continuation of an ownership cost higher than normal
    When used car prices fall, tempting potential buyers, the surge in interest rates will mean that those who need to finance their purchases will likely continue to feel the pressures from the market that is soaring.
    Buyers of cars who take advantage of lower prices and make finance purchases in the midst of higher interest rates might pay more for a car during the term of a loan. In addition to a higher monthly installment, they may be faced with negative equity in the future, finding themselves .
    Variable trade-in value fluctuations
    Based on J.D. Power, a firm that conducts research and data that tracked trade-ins in December, vehicles were able to receive an average value of just $786 value for trade-ins than the vehicles traded last June. Since dealerships are expected to earn less from sales of used cars the value of trade-ins will continue to fall when compared to last year’s.
    Car owners who are looking to sell their current cars should be prepared for lower prices than those last year.
    “It’s likely to result in a significant drop of what you’ll receive from the trade-in value versus the price if you were searching for an auto in September,” says Terrance Gandy, the used-car sales manager for Route 44 Toyota in Raynham, Massachusetts.
    Increased but relatively low inventory levels
    As automakers work towards production levels that are pre-pandemic and used vehicles are becoming more affordable, consumers’ demand will continue to be high due to the car shortage in the times past, as per J.D. Power. This may reduce the stock of used vehicles because more people are choosing to purchase vehicles after waiting out used-car prices that reached their peak in September.
    “Even the prices do go downwards,” says Yoon, “for the next few years we’ll be a million of cars short of used automobile inventory.”
    However, it will let certain consumers to have a better chance in negotiations over trade-in deals.
    “They have a greater chance of getting a deal right now, because dealers must remove these new cars off their lots,” says Gandy. “The ball is at your disposal if you do have a trade-in because dealers are in need of your vehicle.”

    About the author: Whitney Vandiver is a writer at NerdWallet which is currently focused on the maintenance of vehicles and car ownership. She’s previously written about small-scale businesses and payments.

    In a similar vein…

    You can even go deeper into Auto Loans

    Find out more money-saving strategies – straight to your inbox
    Sign up and we’ll send you Nerdy content on the topics in finance that are important to you and other ways to help you get more out of your money.

    Make all the right money moves

    Bank Credit Cards Finance Planning Finance News Insurance Investing Loans Mortgages Small Business Taxes Travel
    Download the application
    Disclosure: NerdWallet strives to keep its information current. This information may be different from what you will see when you visit a financial institution or service provider’s site or a the website of a specific product. All financial products, services and shopping products are offered without warranty. Before evaluating offers, review the financial institution’s Terms and Conditions. Pre-qualified offers aren’t binding. If you notice discrepancies on your credit score, or any other information on your credit report, you should get in touch with TransUnion(r) direct. NerdWallet Compare, Inc. NMLS ID# 1617539 California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812. Property and Casualty insurance services offered through NerdWallet Insurance Services, Inc. (CA resident license no. OK92033) NerdWallet(tm) | 55 Hawthorne St. – 11th Floor, San Francisco, CA 94105

    NerdWallet USA


    (c) 2023 NerdWallet, Inc. All Rights Reserved.

    Here is more on $255 Payday Loans Online Same Day visit the internet site.

Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.

Main Menu