Used Car Prices Average Nearly $28,000, but That Could Soon Change
Prices for used cars have been trending upward for months. And recently, they’ve skyrocketed. But there’s hope that car shopping will soon get less painful as prices begin to fall back toward more reasonable levels. If so, it would become much easier to get your hands on one of the best pre-owned vehicles without breaking the bank.
Used car prices have seen steep increases
Car buying has always been a pain. But lately, prices for used cars have gotten out of hand. In fact, they’re 35% higher than they were at the beginning of 2021.
Though it might be hard to believe, the average price for a pre-owned vehicle these days is $27,500. That’s already higher than it was in November, when the average price was $27,000, Car and Driver reports.
Supply is the main factor driving up used car prices. The COVID-19 pandemic, supply chain issues, and the chip shortage have led to a significant decrease in the production of new vehicles. As dealers have had fewer new models to sell, they’ve also received fewer used vehicles as trade-ins. The result is that the law of supply and demand has affected the prices of not only new cars but also used models.
But experts predict a dip in prices soon
If you’re thinking of purchasing a vehicle soon, you might want to hold off a bit longer. Automotive News reports that used car prices might drop soon. Experts predict that “a 20 to 30 percent plunge in used-vehicle prices is in the cards.”
A renewed balance between supply and demand for new and used vehicles will help drive the downward trend in prices. According to Automotive News, the consulting firm KPMG believes this equilibrium will happen between October 2022 and 2023, but used vehicle prices will begin to fall before then.
“In every scenario, we expect the market to anticipate the turnaround in the new-car supply situation ahead of time and begin repricing used cars before new-car lots are full and used-car demand returns to normal,” KPMG says.
The best used cars in 2021
Given the current state of prices for used cars, you should carefully consider any purchase you make in that arena. After all, at these prices, you’ll want to get the most bang for your buck. To help, CarGurus put together a list of the best used cars in 2021.
If you’re looking for a small SUV, the 2017 to 2021 Mazda CX-5 took first place in that category. The CX-5 is known for its high safety ratings and decent gas mileage of 25 mpg in the city and 31 mpg on the highway.
Prefer a sedan? Consider the 2017 to 2020 Hyundai Elantra. This compact four-door boasts above-average reliability ratings, especially if you stick with models from the current generation.
Finally, if you need hauling and towing chops, check out the 2016 to 2021 Toyota Tacoma. The base model packs a 2.7-liter four-cylinder engine producing 159 hp and 180 lb-ft of torque. This midsize pickup truck also comes with rear-wheel drive and a six-speed automatic transmission.
Whatever used car you choose, let’s hope the experts are correct and that prices begin falling before you have to shell out excessively for your purchase.
