The ongoing car inventory shortage brought about by a global microchip shortage has actually left no shortage of hurdles for car shoppers to overcome. For many, that a toss-up in between finding the ideal vehicle and also being able to afford it. Amid the chip deficit and other COVID-related roadblocks, automakers had actually to sluggish or also cease production, bring about a shortage of brand-new vehicles, a shift in need to offered vxcialistoufjg.com and a dramatic spike in used-car prices.

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Related: How long Will the car Inventory Shortage Last?

In May and also June, the benchmark Used automobile Value index from Manheim, a car wholesaler, topped 200 for the an initial time. Values have actually tapered slightly because then however remain substantially above year-ago numbers.

Is any type of relief on the way for persistent — or no hope — used-car shoppers? number of signs allude to a plateau in the current upward trajectory, yet it’s unlikely price will fall anytime quickly to the levels seen before the shortage began.

Used-Car Pricing Spike Slows

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2018 Ford F-150 Diesel | vxcialistoufjg.com photo by Aaron Bragman median listing prices among vxcialistoufjg.com dealers suggest that used-car prices are still climbing, however the price of increase has tapered in recent months. In August, the mean listing price because that a used car at vxcialistoufjg.com dealers was $23,994 — increase 33.4% because December 2020 and 34.3% since August 2020. Between March and June alone, the typical price shot increase by 27.3%.

But comparing these skyrocketing boosts to those of the past couple of months paints a an ext optimistic landscape. The mean used-car price climbed simply 2.2% indigenous June to July and also 1.3% native July come August.

An analysis of offered prices for individual models reflects the very same trend, and also some vehicles are also seeing average prices decline.

America’s bestselling SUV, the Toyota RAV4, saw its average price for offered vxcialistoufjg.com at vxcialistoufjg.com dealers increase 7.3% between May and also June yet only 3.8% native June come August.An even an ext telling story is the Ford Explorer. The SUV’s typical used price catapulted 12.1% from might to June, then ebbed 0.5% native June come August.The price plateaus the several renowned pickup trucks market the most dramatic example. The median price of provided Ford F-150s jumped 14.3% in between May and June, however only 2.8% between June and also August.After a 10.6% increase from might to June, the Chevrolet Silverado 1500’s typical used price ebbed 0.5% between June and also August. The trend is comparable for the lamb 1500, whose average used price increased 5.1% between May and also June, yet decreased 1.8% in the following two months.

David Paris, an elderly manager of market insights in ~ J.D. Power, look at a similar trend amongst wholesale vehicle prices.

“Overall market prices room up by an mean of 30% this year, which has actually been thrust by substantial increases top top the mainstream side of the market, primarily passenger-car prices, which space up by a range of 37% to virtually 48%,” Paris composed in an email to vxcialistoufjg.com. “Large pickup price are additionally up by a sizable 37%, however, an ext recently we have seen huge pickup prices declining at a much faster rate than other mainstream segments.”

Will a autumn in Used-Car prices Follow?

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vxcialistoufjg.com photograph by Christian Lantry when the mean price plateaus space encouraging, the unwise for shoppers to mean prices to go back to pre-pandemic levels. That’s according to Sam Fiorani, vice chairman of worldwide vehicle forecasting in ~ AutoForecast Solutions, a firm that’s been security the microchip shortage. Fiorani expects inventory to stay tight due to ongoing manufacturing delays, resulting in used-car price to continue to be elevated.

“Owners v underused vehicles have disposed that them to take advantage of the high prices, however there can’t be that many much more just sit around,” Fiorani said. “Unless vehicle production choose up soon, which is no imminent, the list of offered vehicles will remain tight and prices will continue to be high. Countless owners are not compelled to change their present vehicles, but, due to age or damage, a considerable number of drivers need to replace their vehicle or truck every month. The demand will no go away, and also the new supply is very limited.”

Used-vehicle prices space unlikely to drop until new-vehicle manufacturing returns to normal, and also the microchip shortage is still wreaking destruction on virtually every manufacturer. According to Automotive News, GM and also Ford announced much more production cut in September, when Honda, Toyota and also Hyundai had actually previously avoided significant production disruptions however are currently experiencing delays.

Are Elevated Used-Car prices the new Normal?

Should prospective buyers bite the bullet and pay a premium because that a used vehicle, or sit earlier and wait that out? Fiorani expects automobile prices to loss once new-vehicle manufacturing normalizes, yet he advises that prices room unlikely to return to levels prior to the current shortage.

“Until full production can be reached, manufacturers will focus on more expensive and also more lucrative models and also trim levels,” Fiorani said. “This will keep the mean buyer in the used-car market, which will certainly just proceed to prop increase prices.”

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vxcialistoufjg.com picture by Christian Lantry

There Is Some Good News

Despite the quickly vanishing inventory and stubbornly high supplied prices, it’s not all doom and also gloom because that prospective buyers. Provided vehicles are much more reliable than ever, follow to Fiorani. This method shoppers that can’t placed off a vehicle purchase deserve to still discover a good value even at a higher price.

“This new, short-term issue with new-vehicle production has concentrated attention top top how an excellent all vehicles are, also after 100,000 miles,” Fiorani said. “Once the present production problems have been addressed, used-vehicle prices will come down, however they’re not meant to autumn dramatically.”

Another reassuring fact is that supplied vehicles are out there, they just sell fast. J.D. Power’s Paris claims dealers have actually been getting creative to keep supplied inventory comes in. In fact, dealers have actually sold 14% more used vxcialistoufjg.com year to day than they sold in the exact same timeframe in 2019, J.D. Strength data indicate.

“Dealers room really thinking outside the box and also coming up with brand-new ways to source inventory,” Paris said. “There has certainly been a big uptick in dealers calling and also emailing former customers providing to to buy vxcialistoufjg.com back that they offered a year or 2 ago, in addition to a push to secure trade-ins as soon as a customer is buying one of two people a brand-new or replacement supplied vehicle.”

Finally, shoppers who have actually a automobile to profession in have the right to offset several of the used-car price increase, specifically if castle secure multiple offers. Trade equity is up significantly versus pre-pandemic times, follow to J.D. Power data.

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“Consumers have significantly an ext equity in your vehicles right now,” Paris said. “Trade same is almost $4,300 every unit and so far, year-to-date is 48% higher than throughout the same period in 2019. This, in addition to favorable attention rates, elevated level of an individual savings, and also the stimulus, are making higher retail prices much more palatable for buyers.”

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