Used car prices fell 7% in 2023, and 21% from December 2021 to December 2023, according to the Manheim Used Vehicle Value Index.
“Used car prices really shot up during the pandemic. That was a time when the automakers were having trouble getting supplies and parts,” said Mac Clouse, a professor of finance at the University of Denver.
So demand for used cars went up, in part due to these supply chain issues with new vehicles.
Now that the production issues and auto worker strikes have settled, new cars are available again.
“A lot of the industry people are predicting that 2024 is going to be new car sales at the pre-pandemic levels, so the industry is predicting good things,” Clouse said.
Which means used car demand has dropped, and so have prices.
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New vehicle prices are down 3.5% from January 2023, according to a Kelley Blue Book analysis.
From December 2023 to January 2024, new car prices fell by 0.04%, according to the Consumer Price Index.
“While new cars are back, they’re still very expensive, and for a lot of people, used cars are what they can afford,” Clouse said.
However, interest rates on auto loans are still high. So, when should you consider buying?
“In the past it's always been a good time to buy was September, August," when dealers were trying to get rid of current models because the new ones were coming out — but that might not be true anymore, Clouse said.
You can still expect to pay a pretty penny for car insurance.
The Consumer Price Index showsthat car insurance is up more than 20% from this time last year, in part due to rising costs and more dangerous driving.
Car insurance premiums rise 26% in 2024, report finds
The average American will spend around $2,543 for an annual premium in 2024, according to Bankrate.
