A new report from Automotive News suggests that currently Used car prices are exploding will die in late 2022 and early 2023.
Using data and analysis from consulting firm KPMG, it is predicted that the average used car price will reduce about 20-30% when returning to a relationship as normal as new car price. This, of course, depends on vehicle supply, which KPMG believes will reach equilibrium around October 2022 and through 2023.
Even if it has to be the end of 2022 for new car supply to keep pace with demand, KPMG believes used car prices will start to trend down before that time. This is likely because KPMG predicts that the market will anticipate a larger supply of new cars and a drop in used car prices to go along with it.
The drop that analysts believe is coming will be a sharp one. The average used car price is up about 42% from January 2020 prices. That’s a huge swing, and if it does come back, it will have an enormous impact. People who paid for old car At Covid, supply prices will pay too much for the new value of their cars, and their investments will increase rapidly. It will be very painful.
Other analysts who are less alarmed are cited in Automotive News’ report. For example, Cox Automotive makes the point that used car prices will fall at a much more manageable pace, as they don’t believe we’ll reach pre-pandemic supply until 2025. That Cox is still at its peak. Used car prices will be from January to April 2022, then gradually decrease after that.
Even KPMG offers several alternative scenarios for its main prediction. One idea is that inflation continues to keep prices high indefinitely. And the other raises the possibility that the Federal Reserve’s response to inflation could have a rapid effect and completely stifle consumer demand.
Related videos:
