Used Car Prices Finally Start Declining in 2022
It has been a turbulent time in the used car market in recent years with prices shooting up, but it appears that now prices are starting to come back down again which will be a positive for motorists during the cost of living crisis. This post will take a look at how much used car prices have fallen, why they were so high in the first place and what kind of cars are becoming more affordable. Read on to find out more.
Prices Dip in June
Whether it was used Audis, Mercedes or Kia, prices for used cars finally stopped climbing in June of this year after a couple of years of rising prices. Used car sales fell by as much as 13.3% in June with the market gradually starting to correct itself. Stock levels have fallen and demand remains high (although cooled), but it is not expected that there will be a crash. It is thought that the economic uncertainty has cooled off the market with many motorists looking to delay making any large purchases.
Why Were Prices Climbing?
To understand why prices are coming down, you first need to understand why they were continuing to climb. Used car prices skyrocketed in the last two years due to pent-up demand following the COVID-19 pandemic along with the global semiconductor shortage. With the production of new cars significantly hampered, more and more motorists turned to the used car market and this meant that demand was extremely high while supply was low.
The economic turbulence has now balanced things and prices are starting to come down but still remain high. The semiconductor shortage will last into 2023, but demand for used cars is cooling with many people looking to avoid making large purchases during times of uncertainty.
Types of Cars
Interestingly, it seems that some types of cars are coming down in price while others are rising. Petrol and diesel costs are starting to come down while the cost of electric cars in the used car market remains high. This is because demand remains high for electric cars at a time when many are looking to make the switch to reduce their impact and save money during a fuel crisis.
It seems that the used car market is finally cooling off and balancing out after what has been a bumpy few years. Although costs remain high for now, things are moving in the right direction at last.