Used Automobile Prices Fall, Driving Down Overall Inflation

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Used automobile prices have plummeted up to now yr, reaching their lowest point since 2021.

The value declines come after a protracted supply crunch in the brand new vehicle market caused used values to skyrocket.

Not way back, the rise in used automobile prices was one among the key reasons the general inflation rate was so high. Now, used vehicles at the moment are the No. 1 category driving down inflation within the economy, based on an evaluation of consumer price index (CPI) data by automobile shopping app CoPilot.

The June CPI report showed used vehicle prices are down 10.1% up to now yr, after falling 1.5% within the last month.

Why are used automobile prices falling? CoPilot CEO Pat Ryan explains that the provision of recent vehicles is up about 50% since July 2023, which has had a spillover effect on the used market.

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“Consumers have finally found themselves with more options to purchase recent, quite than used, and are capitalizing on it after years of pandemic-driven vehicle shortages,” Ryan said in an email. “Consequently, a number of the price pressure within the used market has eased.”

Based on Cox Automotive, the common list price for a used vehicle is $25,251, a 7% decrease from a yr ago. It’s also the bottom average price because the summer of 2021.

Despite the recent declines, used cars are still about 30% dearer than before the pandemic. Also, high rates of interest for automobile loans are pushing up buyers’ monthly payments. (In the primary quarter of 2024, the common used monthly payment was $523, per Experian, in comparison with $414 in 2021.)

“Affordability stays difficult for consumers, and provide is more constrained at lower cost points,” Scott Vanner, a senior analyst at Cox Automotive, wrote in a report.

Finding deals on used cars

To seek out a good deal on a used automobile, experts recommend expanding your vehicle search beyond local dealerships with online automobile search tools.

You may as well get monetary savings by taking a look at vehicles in lower demand — dealerships shall be more willing to barter if a automobile has been on their lot for just a few weeks.

Certain segments of the used vehicle market have seen steeper price declines up to now yr. Based on CoPilot, average prices for used SUVs, trucks and electric vehicles are down greater than the remaining of the used market: