U.S. used vehicles prices are up thanks to unique market conditions created as a result of the novel coronavirus pandemic, according to Edmunds.
In a news release, Edmunds said its data indicates that the average listing price for all used vehicles climbed to $21,558 in July — a $708 increase compared to June. Listing prices typically decrease during this time period (pre-COVID) due to depreciation.
“We’re seeing evidence of more typical new car shoppers gravitating toward the used car market than usual during the pandemic due to a combination of factors: consumers are being more financially responsible, interest rates and CPO offers have been extremely favourable, and inventory has been severely limited on the new side,” said Ivan Drury, Edmunds’ senior manager of insights.
He adds that consumers may be surprised by the uptick in prices, which is the result of increased demand for used cars. Data from Edmunds also show that price increases span across nearly all vehicle segments, with some of the largest increases seen in large and mid-size trucks, sports cars, and luxury midsize cars.
“It’s a seller’s market right now,” said Drury. “Although used vehicles continue to offer significant discounts compared to new, used-car shoppers will find themselves in the unusual position where they might not have as much negotiation power because demand is so high and dealers will be less inclined to be flexible.”
He adds that consumers may have to grapple with the idea that what they see (in terms of price) is what they will get.
