WASHINGTON, D.C. – Now that spring car-buying season has swung into full gear, many people are going out and attempting to score a deal on a pre-owned vehicle; unfortunately, they’re not likely to find one, as a new report indicates prices in the market are remaining stubbornly high and are refusing to budge.
Edmunds’ new report, “Used Market Enters Uncharted Territory Post-Pandemic,” notes that despite the fact that the prices of used cars have come down slightly from their high point during COVID-19, they still remain at historically high levels. Average pre-owned vehicle prices in the first quarter of 2023 dipped 6.4 percent year-over-year, but are nonetheless 44 percent higher than they were just five years ago.
The average Q1 transaction price for a used vehicle was $28,381, which represents a considerable leap over 2018, when that number was $19,657. This could prove troublesome for inflation-weary Americans looking for a cheap vehicle amid the skyrocketing prices of new cars, with the number of pre-owned vehicles under $20,000 sold in Q1 making up only 30.6 percent of the market; five years ago, that number was 60.5 percent.
According to Edmunds Analyst Ivan Drury, “After experiencing a meteoric rise in value, used-vehicle prices have slightly inched back toward Earth with the return of price drops and seasonal depreciation but remain significantly higher than they were pre-pandemic.”
Edmunds places the blame for this issue on several different factors, including fewer off-lease and off-rental cars finding their way to the pre-owned marketplace, in addition to fewer consumers trading in or selling their vehicles in favor of keeping them on the road longer to save money.
One positive aspect of the current pre-owned vehicle market, the report noted, is that used cars are retaining their value for longer than they did prior to the pandemic, so when the time comes that consumers do wish to sell or trade in their current ride, they are more likely to get a better deal in the process.
Joe Mcdermott is a staff reporter who keeps his eyes peeled for interesting automotive news. He works mainly for our subsidiary, The Published Reporter® as well as our IT firm, SEARCHEN NETWORKS®. Mcdermott, one of our first and thus veteran reporters, is also a data analyst for select independent news and media organizations in the United States.