The car market has been wonky over the past couple of years. New car prices saw a huge increase in the past year as did used cars. However, Kelley Blue Book recently posted that there is a little light at the end of the tunnel when it comes to the latter.
Used car prices are down month over month
Kelley Blue Book reported that the average used car price in America was $28,012 in June, which is down by $300 in comparison to May of this year. That may not sound like much of a drop. However, we would rather see the average price decrease instead of increase at this point.
Chris Frey, senior Industry Insight Manager for Cox Automotive, recently noted, “The used car market is doing just fine. While the used market has been a bit softer than usual this year, it is not experiencing stress. In fact, the market is moving toward pre-COVID 2019 conditions.”
We can only hope that’s the case, considering the average used car price in 2019 was about $17,500, according to Cars.com. As we can see, there’s a long way to go before we get to pre-COVID 19 prices.
The supply of used cars has increased slightly
The slight decline in used car prices has everything to do with the available supply. The overall supply of used cars increased in June, reports KBB. Car dealers nationwide measure their inventories by a metric called “days in inventory,” which reflects how many days a dealer would take to sell out all of its used cars if no more were available.
According to this metric, the nationwide average day’s supply was 49. When comparing that to the 48-day average at the end of May, it’s clear that dealer stock has increased a little. Again, it doesn’t sound like much for now, but KBB did report that the overall number is up by 27% compared to a year ago.
Cheap used cars can still be hard to find
Despite the dip in used car pricing and the increase in dealer inventory, cheap used cars can still be tough to find right now. Dealer inventories for cars priced under $10,000 are sitting at a 33-day supply, while cars priced in the $15,000 to $25,000 range are in the 40s.
Buyers with higher budgets should easily find cars priced between $25,000 to $35,000 as those cars are in the 50-day range. However, cars priced over $35,000 are far more available than the rest, with a 62-day average supply.
Anyone currently in the market for a used car may have the best luck by perusing their local classifieds for private party deals. Although used car prices are still elevated across the board, plenty can be found on sites like Craigslist or Facebook marketplace. Check out some of our used car shopping tips for more insights on buying a used car from a dealer or a private party.