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Wednesday, November 30, 2022
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The Future of Used Car Prices

Business

Cars in a row at dealership | Image by Shutterstock

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Dealerships are gearing up for next year’s inventory. According to NBC 5, the increase in stock at Texas dealerships may impact the prices of cars, but not drastically.

During the pandemic, dealerships across North Texas saw their inventories plummet.

Yet the general manager of Clay Cooley Nissan, Hector Lebron, told NBC that dealership stock is now starting to rebound.

With a rising supply of cars, the hope is that it will meet or exceed customer demand, meaning lower prices and better deals.

At the same time, given the record-high car prices seen during the pandemic, while these might lower a bit, customers should expect cars to cost more than they are perhaps used to.

Lebron is a long-time expert in the automotive industry and an executive at the Irving Nissan location.

He told NBC 5, “Yes, there are still deals. Deals have always been out there in existence. The only difference is that you’re going to be paying more for the value of money… It’s non-negotiable because the fed has raised the interest rates.”

The Fed has been attempting to raise interest rates to solve inflation. However, this is affecting car loans and their interest rates. Combined with higher prices, cars are still more expensive than ever.

In October 2022, Fortune reported that the Consumer Price Index indicated that car and truck prices fell 1%; however, they were still 7% higher than they were a year ago. Between April 2020 and April 2022, the average used car price increased by $10,000.

Cox Automotive’s senior economist, Charlie Chesbrough, told Fortune that there is unlikely to be a drop in price to pre-pandemic levels, as the demand for new and used cars remains high.

Ivan Drury of Edmunds.com said that a price decrease would probably be seen anywhere from nine months to a year from now.

David Paris of J.D. Power suspects prices will start returning to normal in two years. He believes there will be a bottoming out of prices around 2025 at about $25,000.

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