The Expert Podcast

So what is going on with used car prices and was this recent little blip and drop a price It's just a head fake and it's gonna, only be a drop in the bucket. It may be that if you're in the market for a used car now might be the time to buy because they may go up again You might be expecting used car prices to crash, but here's some. Big headlines and some data behind the scenes That show why that might be the case First of all, according to CNBC, there may not be a return to normal for used vehicle market. There was a decline in price through the end of last year So in 2022, But inventories remain low and the pause and production. might make used cars back up on the upswing…

We're seeing that already used car prices are surging again. this is from March 30th So whenever you're watching this this is, you know a beginning of 2023. According to the article It says nice While it lasted for nearly a year The average used vehicle price has been edging edging It didn't crash It edging towards affordable for millions of people. The relief felt belated and slight but it was welcome. But. Supply of used vehicles failing to keep up with demand prices are creeping up again with signs of pointing to further increases.

Why is that? Well you got to remember. During 2020. And 2021 new cars. We're not produced at the same volume that they were in the past. So now 2020 you're three years later. A three-year-old use car is a 2020. They hardly made any new cars in 2020. So the amount and volume of available inventory is incredibly low because you're going through that dip of where new cars weren't produced. At the same time. Demand for used cars is going through the roof People want to buy used cars Why is that? here's why.

New cars are now at $50,000 Average transaction price. So the executives at Toyota says we'll be paying 50,000 average transaction prices for new cars soon really already or may Right now the average new car transaction prices I believe is 47, 40 $8,000. And it's only going up. And the used car market Isn't going to slow down either. So there's a lot of things that play… that make…the pricing of used cars… To be under pressure on the upward side. So if you look at for a used car, That may be a problem.

It's also. Comes in at the lower end a three or $4,000 range Let's take a look. According to one dealer. Many customers can't afford either new or late model use Some would be one would be buyers. He knows are using tax refunds to make ends meet use inexpensive cars now becoming more of a luxury. What the market needs right now are vehicles that are three four and $5,000. Behind the vehicle shortage and inflated prices is supply and demand It's a real simple. Right again they repeat the fact that new cars are at $48,000 beyond the reach. This is going to make. A return to what they call normal notice normal as in. Normal just means what it was four or five years ago. That's history. Not happening anymore Right?

In 2018 or 19. There were plenty of new cars being produced You could buy a really nice new car for 30 30 5,000. And. In 2014 or 15 there were tons of cars produced So a three-year-old used car was easy to find in 2018. Right. If you're in 2000 1918 and you're looking for a three-year-old car Well, 2018 minus three is 2015, 2015 There were, I believe 12 million new cars produced maybe 14 million… There's plenty. of them around.

Well now fast forward to 2023 you go back to 2023 years ago. There weren't that many cars produced and the new cars are a lot higher price. So all these are coming together to make finding a good used car for a decent price a very difficult prospect. And with the fact that interest rates are high One of these articles show that a used car interest rate Now I believe it said it's 11% Let's take a look. I believe it was in this one. Or talked about. The percentage rate Yeah 11.3%. Up from 8%. A year ago. So you went from 11 from 8% to 11% in one year… And that's going to have a big effect on your ultimate car payment.

You know if you get a three-year-old car you might be able to get a four year loan… And that's going to be a lot higher payment than a five-year loan on a new car at 11%. You know your backup in the six $700 range per month for a used car. New cars or even worse right now new cars are averaging about a thousand dollars a month for a payment on a $50,000 car. So keep this in mind as you're shopping. And if you know you're going to need a car in the next couple of years. Now might be the time to buy because it's PO it's possible that the prices aren't going to go any lower and they might start creeping back up.