It appears that the car market is once again going through a phase. Used prices were strong for a while there, but the narrative has changed. Now, it appears that car parked on your front drive is losing value at quite a pace, and mine is too.
A few years ago, the car market was tripping out. Supply chains had seized up, so new cars were in short supply, and their prices naturally went up. With fewer new cars available, that pushed more buyers into the used market, and prices went up there too. There was a little bit of human craziness stacked on top, too. People panicked and tried anything to lay their hands on the vehicle they wanted. But fundamentally, it was supply and demand at play.
Fast forward to today. While some models are still scarce, normality has largely returned to car factories the world over. That’s had an impact on used car prices, which are finally coming down from their pandemic peak.
Take a look at the graph above from Cox Automotive. The average used vehicle price sits at just $25,571 today. That’s down a full 12% from May 2022, which recorded an average of $28,309 in comparison. While prices have seen a slight bump in the last month, they’re still a long way down on what they once were.
Data from Manheim tells the same story. The company’s Used Vehicle Value Index tracks used prices month to month, and the trend has been clear for some time now. The index began at a value of 100 in January 1997. As the average wholesale used car price climbed quickly during the pandemic, the index exceeded 260. Since late 2021, though, prices have been on a near-continuous decline. Today, the index sits at 199.1, almost halfway back to its pre-pandemic position of approximately 150. If all that sounds too complex, just look at what the line is doing and you’ll get the idea.
The sink in prices has become painfully obvious, particularly to those directly involved. Car commentator Doug DeMuro recently released a video on the topic himself, no surprise given he’s exposed via his auction business Cars & Bids.
“People are asking me all the time now,” said DeMuro. “One of the very first things they ask: is it collapsing?” He doesn’t use such calamitous terms, though. “This is normal!” he says. “It used to be, you bought a car, you owned it for a while, you drove it, it depreciated, and then you sold it for less than you paid for it.”
He notes that many customers that approach Cars & Bids are confused when they find out their car is worth less than a few years ago. For some reason, people have just baked the pandemic spike into their thinking, and they’re not realizing that used car prices more often go down than go up.
“New cars are coming back into stock, and used cars are becoming cheap again,” says DeMuro. “Not just cheap—cheap again, like they used to be.” He sees the drop in prices as a return to normality, not a collapse. “It was a great period to be in the car business, you were making a lot of money,” he says. He notes he was tinged with sadness as a car enthusiast, however, as nothing was getting cheaper or more accessible.
We’ve noticed these trends in The Autopian offices too. I’ve struggled to trim my own fleet. My Mercedes-Benz took a whole week to sell, even at a bargain price. I’ve had my BMW listed for a week with only two scam inquiries. It seems likely I’ll have to drop the price far more than I initially expected to get it gone.
Our own Stephen Walter Gossin is going through the same thing. “I’ve had my S-10 and New Yorker on sale for a combined total of over four months, have dropped the price by almost half on each and have had zero interest and zero showings!” he says.
What does this mean for you? Well, if you paid big for a vehicle a few years ago, you’re probably not gonna like the market price right now. That’s all the more true if you paid over sticker for something desirable like a Ford Bronco that is now in regular series production. Ditto the Cybertruck and other such examples.
But it’s not all bad news. If you’re buying right now, times are good. That car you thought you couldn’t afford two years ago is probably a lot cheaper right now. If you’ve been dreaming of something special, cast your eye across the classifieds. You might just find a rough diamond at an unignorable discount.
Image credits: usedcars.com via screenshot, Cox Automotive, Manheim, Lewin Day, Stephen Walter Gossin
I dunno man, the market for 90’s BMW’s is still pretty stupid, like stuff is still being listed for way too much. Stuff doesn’t sell fast though.
As a fellow BMW enthusiast who watches the market I’ve noticed that the good cars that are a reasonable price are still moving even if slowly, the overpriced shit boxes languish. I think a lot of people either bought on the bubble over the last few years thinking prices were going to keep climbing or just can’t reconcile themselves to the fact that the crazy price climbing has probably leveled off.
Yeah, I’m happy to see that the idiots with their automatic 525i’s being listed for $10k aren’t finding any buyers. I also see old BMW’s selling for less and less each time on BaT, like I was watching an auction for a 2002 and it sold 3 times on there for a decreasing amount of money. Nature is healing~
Haha yeah I saw a pretty good deal on a e36 M3 recently, a little scruffy, but 1 owner, 98K miles with a lot of maintenance receipts, sent it to a buddy to see what he thought, it was gone by that afternoon, only to reappear from a different seller the next day for $4K more. It’s now been sitting for weeks and I’m relishing the would be flipper getting burned. Not least because he hasn’t fixed a thing on it besides get it detailed.
Of course I was the fool who paid $1-$2k too much on my ’83 533i in 2022, though I think if I keep it long enough it will appreciate a la 2002 prices, but I don’t know that it’s a forever car for me.
At least an 83 533i is a car worth keeping around, unlike some of the junk BMW is making nowadays. I had an 84 533i for a little while, and I’m still sad about that car getting totaled, I rather enjoyed driving it and working on it. I still have an older BMW (95 525i) as my daily driver so that’s cool.
This makes me feel so much better. I’ve been shopping for a very specific car, but every single one for sale at a dealer is listed for $10k+ over what they’ve been swapping for on BaT and I feel like I’m taking crazy pills. If Bring a Trailer is the place to go for a “good deal” then I feel the market really must be in a weird place. Also, not one of the cars I’ve been looking at has sold in the three weeks I’ve been looking…
I wonder where they get these figures on average used car prices, I get the feeling they are getting them from dealers and ignoring the private market where a hell of a lot of old cars still trade for under $10k
It was great for some back in 2021-2022 – I had a Mazda Millenia S that I ultimately had to donate to charity because, when everyone wanted to pay top dollar for used cars, no one wanted to touch what I was selling.
I had a Millenia S in the early 2000s, only modern car I took a terrible drubbing on in cost of ownership. In hindsight I bought a poor example, but in general it seemed like a wonderful idea that failed in execution, at least over the long term.
Well… this viewpoint certainly seems spot-on for the mainstream of 3-5 yr old used appliance cars but my experience is that some fairly broad niches still exist.
For starters, the $500-2000 beater/bomber 1st car/sacrificial car is extinct. As a result I see people paying $2500 for rotten hulks with the intention of letting their 16 yr old finish them off, or getting their recently rehabbed butt to an interview. Often these folks are overpaying for the most mundane vehicles on the belief that the popularity of such is due to inherent quality and reliability. 2006 impala for the win!
Second, the sub 15k market is still thin on supply and grossly overpriced. Many lots don’t play in this league at all. Many owners of “$10k” cars are in no position to upgrade right now so their current rides are off market. What is for sale is largely $5kcars priced at $13k.
This brings me to the niche I’ve been hitting. Fully depreciated lux cars are still up compared to their rock-bottom of a few years ago. And, they can still sell at a profit in the nearly empty $5k slot. I just sold a 19 yr old flagship for 10% over what I paid in 2018. Drove it 6 years with only routine pm and sold in 1st day for a “profit” ignoring inflation. Got another one I’ve owned 7 years and expect it will sell 10-50% over my investment. These cars were a screaming value when purchased and still stand out as desirable options when compared to the rusted and busted mundane junk being offered at this price point. They truly have found a floor and have held value despite use.
Not to wish for disaster, but I’m excited by the possibility of buying a couple more “retired” luxobarges at blue collar prices. Bring on the glut of S-class and 7-series! V-12s for all!
Maybe it is because I’ve been shopping for Toyota/Lexus hybrids, but I haven’t noticed this at all.
I’m in the market for a used ND2 Miata. Hopefully this price reduction affects them too and not just the more consumer focused cars.
After years of missing a manual transmission and a removable roof, I sold my ’17 F-Type R AWD Coupe and bought a ’22 RF Club with 4k miles on it for $32k a couple months ago.
It was the best deal I could find for an ND2 while getting the Recaro/Brembo/BBS packages in an RF Club. I found several RF Clubs with BBS wheels and Brembo brakes that didn’t have the Recaro seats, which are like $5k on their own if you try to buy them separately.
I normally like buying heavily-depreciated cars, but outside of salvage-title messes, that wasn’t really an option when looking at ND2’s. Even with 40k+ miles on them, the ND2 RF Clubs with Recaros weren’t going for less than about $26k, so I took the unusual (for me) approach of looking for the newest/lowest-mileage/but-still-kinda-depreciated ones I could find for under $35k and found my sweet spot.
If not for the must-have Recaros, I saw RF’s in the low 20’s and even the high teens for rougher, high-mile examples.
Ive been keeping my eyes open for a mid life crisis Miata. Prices are coming down, but not at the same clip as other models.
This is great news. Especially because it should ease inflation numbers slightly which should ease interest rates.
If you’re upset because the car you bought has lost value, wait until you find out how much your fridge, microwave, rugs, TV, and lamps are worth. The market is collapsing!
My car has certainly seen a drop in value. I’ve been planning on trading it, but it might not work out as well as I had hoped.
I should have just gone through with a trade at the peak, when it was worth basically what I paid for it new, but the dealer I was working with couldn’t get in quite what I wanted.
Anecdotally, BlackBook value on the Mazda2 I traded in earlier this year is up from like $4k in January to over $5300 currently, although I’m not sure I see it in auction results, but then it’s either weird data from a single relatively low volume model (prone to more aberrations from a single irregular data point), or someone’s assuming an incoming recession where perceived budget cars get worth a whole lot more (look at the Geo Metro spike about 15 years back).
Still, I intend to own its replacement long enough that any better deal I could’ve potentially gotten from waiting a few months ends up effectively a rounding error.
That manual/sunroof VW Alltrack that I didn’t buy when I bought my JSW TDI instead, a week before covid, is probably more expensive now than it was then!
Good.
Here’s hoping the dealers in my area eventually get the memo. Most of them seem to be sitting on piles of inventory, refusing to believe the bubble has finally maybe not popped, but deflated a bunch. I know we haven’t gotten back to off-lease Accords for 18k, but it’d be nice to not have to sift through a bunch of 3-5 year old cars listed at 90% of their original MSRP.
Same in my area. I need a new truck but will keep limping mine along until dealers stop charging condominium prices for them
Dealers are going to keep selling “scarcity” to uneducated buyers for as long as they can. It is the perfect tool for them. Installs a sense of urgency in the buyer, and raises the expectations for how much it will cost.
I guarantee there is some CJDR sales guy talking about their inventory like it is 2021 right now, and trying to pretend there isn’t a full lot of vehicles stacked up behind them (that overflow lot down the street full of Gladiators…that isn’t us…unless you liked one of the colors you saw…then maybe we can get one for you).
For real, we’ve been shopping for a lightly used Mazda CX5 and the local dealer’s site said they have 98! in inventory when I checked to see if they had anything the other day. Yet they still have them priced within spitting distance of new even with 30K-50K miles on em.
Can we please tell the 80-series Landcruiser owners this? I’ve been scoping them out for a while, and they keep going up. I should probably just jump on one, but I have a hard time spending 15-20k on something I’m only going to drive occasionally and off-road at that. I’m not looking for a showpiece either, just something mechanically sorted and rot-free. Dents and patina are welcome on this type of vehicle.
Those aren’t used cars, those are classic cars. Whole other market.
Land Cruisers aren’t cars…they’re family members. They will outlive you; they will outlive your children.
My 4Runner is like 90% of that, I just REALLY like the 80 series style and solid front axle. Last of the breed for Toyota USA.
As an officemate with a guy in the exact same position as you who has more or less said exactly what you did a few times over the last couple years, you pretty much just answered your own question, lol.
Honestly, good luck though! Bite the bullet and enjoy it if you have the means and your heart will thank you.
The answer being “just do it and shut up about it”? Haha.
I have the means in that I can buy one in cash, but I have this mental block that since I don’t own a home, I don’t deserve to own anything extravagant. Considering that I’m in my mid-40’s already and housing prices have essentially doubled in the last few years, I’m sure that ship has sailed, but I can’t help myself from hoarding most of my cash “for a downpayment”.
If I sell the 4R and get a more economical DD it might make more sense.
True story!
Last October, my son convinced my wife to sell her 2022 Kia Carnival that she bought in 2021 (just before our two kids got their drivers licenses and realized she didn’t need) and get an old LC/4 Runner/Lexus LX/GX because the Kia would soon plummet in value and the Toyota truck would hold its value. Now we’re rocking an LX470 (100 series LC clone)! Smart kid and cool wife! We paid sticker plus $600 for “pinstripes” for the Kia during peak chip shortage) and sold it to CarMax for $2,000 less than we paid two years and 10,000 miles later. Crazy times.
Nice. Yeah, the Hundos are nice. I looked for one before I got my 4R, but it was tough to find a good one in the northeast. There’s just something about a Landcruiser, they just have such a nice, solid feel to them. I know a few guys with built 200s, they have such a quality feel to them in comparison to my 4Runner, which is itself a very solid vehicle.
What I found remarkable is how well Sportwagen values have held up. I got mine for $13,500 in early 2020. I checked cars.com the other day and there were only six for sale within a 100 mile radius. Many were listed for over $12k and had twice the miles on them as mine. And my local VW dealer emailed me asking to sell my car…they only wanted to give me $6k for it. I guess it’s somewhat of a niche car, but I figured it wouldn’t hold as much value since the newer Golf wagon also exists. Not that I plan on selling, but interesting nonetheless.
A friend of mine got an All-Track pre-pandemic. The dealership happily cut him a deal and sent him on his way…post-pandemic, years later, he still gets mailers and dealerships offering to pay him more than what he bought it for, even though he’s put miles on it
“Not just cheap—cheap again, like they used to be.”
Not yet they’re not. Those graphs show “like they used to be” is still a long ways off.
Yeah, but with inflation, $25,500 is the new $22k
Correct. And now accounting for the higher average price paid for new.
Happy to have bought 2x new cars in Feb/Mar ’21. Sure, we missed out on higher trade values that followed but we got the cars we wanted, in the trim we wanted, in the int/ext color combos we preferred, no electronics or features deleted due to chip shortage, etc.
While I like Doug DeMuro, he sounds like the male version of a bad Katherine Hepburn impression. And yeah, the used market is really weird.
Its okay to grow to dislike someone.
It was a wild ride while it lasted. Was able to trade both a Sprinter van and a Forester for an MSRP 4Runner near the peak, getting 96% of Sprinter original MSRP after 2 years and 84% on the Forester after 5.
Wow I was looking for a good used car just a few weeks ago, ended up going with a Scion FRS from a private party because there was nothing good near me. This is so funny, you buy a car and then prices plummet.
To be 100% clear, the current Mannheim index is 25 points higher than its predicted value based on long-run trends of 150. So still 15% – 20% inflated. And this “crash” has been slower than the spike that precipitated it.
So it is a crash, but it’s a more honest assessment to call it a return to normal.
I really missed the boat on swapping out our 2014 Elantra GT. I found exactly the car I wanted as a replacement, for a decent price(A3 E-tron Prestige for $25k), and CarVana was offering $12k on the Hyundai. I missed out on the other car so we hung onto it. Then in early 23 it got too thirsty, developed rod knock and spent 6 months getting a warranty job. In better shape than ever and the highest offer I’ve gotten is $5600.
The Hellcat is the one that really surprises me. The first ones were supposed to be instant collectibles and now they’re in the mid thirties.
They made way too many of them to be collectable, despite every Charger/Challenger owner thinking they have some kind of limited production treasure on their hands. Seriously, I’ve seen guys at car shows with homemade plaques describing their “special edition” and it’s a Daytona or Rumble Bee or something that was a mass-produced package.
Nothing except the original Demon and Demon 170 will ever trade for big money IMO.
I can’t imagine it helps that Hellcats are based on an even larger mass-produced car with prices starting in the low 30s. And if I really want a Hellcat and can’t find one, I can easily throw some parts at it. I’m sure Hellcats will command value but it’s going to be a long while.
I suspect not for decades if ever.
The consequence of cars being called “instant collectables” is that tons of them are stored away with no miles by owners, or driven only to shows.
Think of how many Boomers were going to retire on their low-mileage C5s that are now worth $10-12K.
“Think of how many Boomers were going to retire on their low-mileage C5s that are now worth $10-12K.”
I can’t wait till these hit the market. I would love to scoop up a low mile c5 to beat the hell out of.
The time is now, I’ve casually been looking, you can get a clean C5 for $10K-$15K all day long, and a clean Z06 will run you $22K. Very curious to see if these keep dropping or if this is the bottom.
I think there is still room to drop. At least for the low mileage ones. FIL just bought a C5 with about 5k miles on it for around $20k. He calls it a “50th anniversary” car and acts like that’s special but it’s not a special model just one that was built in 2003.
As those types of people are no longer in the market, I think the really pristine ones will drop some more. They’re like new, and I would be happy to use up that newness.
Ha yeh I saw a couple of those at local small dealers who of course were going on and on about it being 50th anniversary edition, eye roll. Otoh maybe it’s age I’ve been surprised the C4s haven’t dropped even lower, especially the later LT1 and LT4 cars, which actually seem to be coming up.
I have a C4 but with the LT5. I don’t get the sense that they were “collected” like the C5 so maybe just not as many nice ones sitting around out there. C5 is squarely within a generation that was coming into money and for some reason thought the way to spend it was to buy a nice car and not drive it.
They did make actual 50th anniversary editions. Only in Burgundy color. I think they limited production to 10,000 units (lol).
Yea, a few decades, like when these cars are 50 years old is what I had in mind.
I didn’t think about the instant collectible aspect and the number of owners letting these collect dust in their garage. So maybe there’s a small handful that’ll gain value.
I had an aunt who was going to retire on her Hummel figurine collection. It didn’t work out.
While in hospice, my dad was very lavish towards us with his Hummels, sharing them out and talking about how much they were worth. We all said thanks and hugged him and so on – let him go off thinking he’d left us something valuable.
Hellcat owners are the new, “it’s rare!” Corvette owners.
Charger/Callenger prices will rise as more and more of them get wrapped around telephone poles on the way out of cars and coffee.
They will not. V10omous is right in that it’s the new C5 Corvette…
Keep in mind the 05-06 Ford GT is considered an anomaly, in that there were 8000 of them produced for the entire planet.
There are OVER 100,000 Hellcat powered vehicles produced. Yes, some will be destroyed, but not more than 90 percent of them. They will be destroyed at a similar rate as C5 Corvettes.
Granted, there were ~250,000 C5 Corvettes made, which is why they’ll never go anywhere. Somewhere around 98% would need to be destroyed for the remaining 2% to have a chance at being desired.
Maybe – first-gen Mustangs aren’t exactly rare and they’re reasonable valuable to people.
Personally, I find the C5 revoltingly ugly, but my opinions seem not to be valued by the population at large.
First gen Mustangs existed in a time when nothing was considered, “collectible.” Ferraris we now covet were left to rot.
Now people think everything is “collectible.” It’s like when I grew up, my parents bought me baseball cards because they were “collectible.” They assumed their kid would be the only one with the next Mickey Mantle card — along with millions of other parents. I have a few that are worth a few hundred bucks, but nearly all of them are worth a penny each.
Even today, First Gen Mustangs aren’t worth much. About $55K for one in great shape (so adjusted for inflation, doubled in value), unless you have something genuinely rare. Doubling in value over 60 years isn’t anything worth talking about.
— —–
EDIT: As someone with actual collectibles (to where I have riders on my insurance policies to cover them), you need something that is rare enough, and desirable enough that demand exceeds supply.
I have a car of which is less than one of 830 sold in the country. It’s desired, but not more than demand. After 9 years, market is 90-95% of what I bought it for. Unless demand for that car seriously ramps up, it really won’t move much. Adjusted for inflation it has depreciated. I don’t expect any movement on it for at least another 10 years, and even then, it’s likely not going anywhere.
A car I want was one of 100 sold in the country. 1 of 100 (75 coupes, 25 roadsters). It is absolutely considered the most desirable one they made. Where are values after 8 years? 85-90% of what they cost new. Despite being that rare, there just isn’t the demand.
If there was so much demand for Hellcats, Dodge would’ve sold a lot more than 100,000 Hellcat-engined vehicles. They wouldn’t be sitting on lots right now. Something that is lot-rotting is not going to ever appreciate adjusted for inflation.
It is the new C5 Corvette.
I want to revisit this point as well, as someone who has valuable collectible cards (things like Beta Moxes from MtG).
Those cards that are worth a penny each are actually worth $0, and are only worth a penny in a very specific context. They are worth that penny only when you are selling an ENTIRE SET.
Why? Because when you are selling an entire 1988 sets of Topps baseball cards, the value you are selling is time saved of not having to complete the entire set. You are delivering everything at once, saving someone the time to have to fill the holes in the set they are trying to complete.
What is the actual Mark Jabroni card worth by itself? ZERO. Actually, it’s worth LESS THAN ZERO, because it is literally taking up space that better possessions could occupy.
It’s like all the rando Beta and Unlimited MtG cards I have. It might be worth something if I run into someone who needs that card to complete a deck for playing wtih. Outside of that, the effort to actually get what it’s worth is extremely serious. Heck, even if my MtG cards have been appraised for damn near $100K, the effort to actually get that $100K would likely take 6 full-time months of effort. 1000 hours. Which is why I still sit on them, and still play games with them from time to time.
This is a fantastic point. I used to buy and sell vintage cameras as part of my job at a photo repair shop so I think I’m pretty familiar with collector dynamics. There’s a common misperception that rarity=value, but it’s more like
rarity x desirability = value.
Which to get back to cars is the one reason the Hellcat may not fall as low as the C5 in price. I don’t think it’s crazy to argue the Dodge has a higher desirability factor at least vs a base model C5. But I don’t know that it will be any more collectible than the C5 Z06-which already commands a solid premium over a base car.
Maybe it is just my observations, but first gen Mustangs seem to be the only “base model” cars I see getting preserved or restored and making their way to the auction blocks still as base model cars. So they end up being more affordable. Yes, some are turned into fake GT500s, but a lot of them aren’t. A lot of people love first gen Mustangs.
In contrast, every Mopar you see on the block is a Hemi or some special edition (or a clone of one of those). Every Camaro or Chevelle is a SS (or clone).
A lot of the reason for this is a LOT of people had a first gen Mustang. I’ve met a lot of random people over the years who had a 64 1/2 in the family. Heck, I think 20+ years ago I was playing The Sims Online regularly with some gal from Oklahoma and she was restoring one that was in the family.
There’s a lot left because a lot were sold, and they weren’t anything special because most sold weren’t special. More than any other generation About 3 million 1st gen Mustangs were sold, compared to 2.6 million Fox Bodies, 1.5 million SN95s, 1.1 million Mustang IIs, 1 million S197s and only 670K S550s.
You can finally find a highly depreciated luxury car again – you just have to wait out the dealers and sellers that still seem to think their 40k mile 3 year old luxo-suv is worth 95% of what the MSRP was. I’ve been tracking drops of upwards of $1000 a week on some cars because they are massively overpriced to begin with, but if you are smart you can track list prices of specific cars on cargurus, autotrader, et al. and snap one up once it’s been languishing on the market for 60+ days.
Fewer, please. 🙂
“With less inventory available”
You mean that the Chevrolet Tahoe Billy bought and financed at 9.99% APR over 84 months isn’t going to be a viable retirement strategy?
But check out the Zestimate on his Double-Wide….
Got to time it just right for when it is time to get rid of the Dale Edition Monte Carlo SS.