WASHINGTON, D.C. – January saw a few interesting developments in terms of the U.S. automotive market, as prices for pre-owned vehicles experienced a sharp drop while the cost of new vehicles, on the other hand, continued to show an upward trajectory.
Reports indicate that prices for new vehicles increased 0.2 percent in January, with an overall increase of 5.8 percent from the same period of time one year prior. In contrast, prices for pre-owned vehicles in January dropped 1.9 percent and 11.6 percent year-over-year, continuing a monthly trend of diminishing prices that has lasted for seven straight months now.
Meanwhile, new car prices have continued to climb steadily since March 2021.
While the cost of new vehicles have been higher than usual for some time now due to pandemic-era supply chain issues making the availability of tech used in their manufacture scarce, the decrease of used car prices run contrary to their value during COVID.
When new car availability was at its lowest and prices were skyrocketing, consumers desperate for new wheels turned to the cheaper pre-owned market; however, that increased demand soon jacked up prices there as well, but the recent decrease of used prices can be attributed to several factors, experts say.
First of all, the resolution of the supply chain issues holding up new car production has resulted in an increase of inventory and renewed demand…and decreased reliance on used vehicles.
But another reason for lowering used car prices could be blamed on the fact that dealers may have been purchasing as many as possible for the upcoming spring buying season – a time when many Americans utilize their tax refunds to help with new purchases, such as cars – and as a result, the increased inventory is driving prices down.
Christopher Boyle is an investigative journalist, videographer, reporter and writer for SEARCHEN NETWORKS® and The Published Reporter® as well as other independent news and media organizations in the United States. Christopher works on a wide variety of topics and fields, has been featured in print and online in a variety of publications, from local to national, and helps keep a keen-eye on what’s happening in the automotive world for Auto Buyers Market.