Used Car Prices are Falling, But What Does That Mean for Drivers?

As of the summer of 2022, used car prices have slowly begun to drop, but not in the way you would expect. As prices of used vehicles fall at the wholesale level, here’s what drivers can expect.

The price of used cars, trucks, and SUVs is falling steadily at the wholesale level according to the Manheim Used Vehicle Index which is typically seen as the standard for measuring vehicle value.

According to their data, the used car market saw its peak at the end of 2021, and prices have begun to tick down since. Over the first half of the year, this downtick continued and eventually began to plateau after the summer of 2022.

While prices at the wholesale level have come down, this hasn’t necessarily translated over at the dealer level. Dealerships are continuing to mark up the cost of new and used vehicles. While prices are not as high as they were during the pandemic, used car shoppers are finding themselves in a bind.

So, If you’re looking to get into a used car over the next couple of months, what do these falling car prices actually mean for you? Here’s what consumers need to know.

Is Now a Good Time to Buy a Used Vehicle?

While car analysts note the decline in prices of used car models, this doesn’t necessarily mean that used cars are cheap right now. In fact, certain used models are worth more now than their suggested MSRP as outlined by a recent report from iSeeCars.com.

In addition to these higher prices, steady interest rate hikes have made it difficult for drivers to get into a vehicle at a price they can afford. For many, this is the perfect storm for an automotive market that is too expensive to shop for. As a result, many analysts and consumers indicate that now might not be the best time to purchase a used vehicle, especially if they don’t need it right away.

On the contrary, if you do have a high-value used vehicle like a Porsche 911, Jeep Wrangler Unlimited, or Toyota RAV4 hybrid, now might be the best time to sell it. For these car owners, you’ll likely be able to profit just as much as your used vehicle’s suggested MSRP value.

As Used Car Prices Fall, Here’s What to Expect

Falling used car prices are welcomed news for consumers who rode the wave of unprecedented car appreciation over the past two years. Pandemic uncertainties, including supply chain kinks and a limited supply of crucial components like semiconductors are slowly correcting themselves.

While fed interest rate hikes are the main roadblocks standing in the way of consumers looking to get a used vehicle, the future of the automotive market does look bright. If you’re planning to get a used vehicle, you can still snag some great savings at your local dealer. Working with private sellers can be another great way to negotiate affordable prices.

If you’re able to though, holding off until inflation levels begin to plateau and hopefully dip down might be a better move for drivers.