Used Car Price Slide Halted in April

The yearlong trend of falling used car prices came to a halt in April with a slight increase of just under 1% for the first month of Q2.

Prices for previously owned vehicles rose 0.69% from the start of March, according to automotive data provider ZeroSum. However, as new vehicle prices have continued to rise steadily, used vehicle prices have falling 9.05% since April 2022.

The average price for a used vehicle now is $30,801, the company said, adding in “April 2022, the average price was $33,866, so even with this month’s increase the average used car price is still well below the prices we were seeing in 2022.”

More vehicles in the system

While prices rose on a month-over-month basis, inventories also rose. In fact, inventory levels have increased 17% since Feb. 1, moving from 1.5 million vehicles to an expected 1.7 million by the end of April, the group noted.

“Used vehicle inventory has increased for the second month in a row, up 6.99% from March,” ZeroSum noted in a report. “The availability of used cars sits at 1,698,479 at the beginning of April, and … by EOM this number will be 1,764,115.”

Despite more vehicles in the system, used vehicle sales for April 2023 are expected to reach about 3 million, down 1% from a year ago and down 6% from March 2023, TrueCar, the digital auto matchmaker, noted. 

The average interest rate on used vehicles is 10.79%, down from 11% in March 2023. The average loan term on a new vehicle for April 2023 is about 69 months and the average loan term on a used vehicle is about 70 months. 

There has been a steady increase in used car inventory and a slight increase in price which should make for a better selling market, aiding dealers, ZeroSum noted. 

“But dealers should be cautious, this slight upward swing in price is the first we’ve seen in a year and doesn’t necessarily indicate that the price will continue to increase in the coming months,” the website said.

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• Source: https://www.thedetroitbureau.com/2023/04/used-car-price-slide-halted-in-april/