Experts and industry insiders have weighed in on what to expect in the coming months, highlighting various factors that are influencing the market. This article delves into the predictions for used car prices, the impact on buyers and sellers, and the broader economic factors at play.
TL;DR
- Used car prices are expected to continue their decline throughout 2024, benefiting buyers looking for more affordable options.
- Experts predict that SUVs and sedans will see the largest price decreases, while other vehicle types may experience more stable prices.
- Dealers are anticipating a challenging market, with many expecting a decline in trade-in values and overall used car prices.
- Economic factors such as increased production levels and inventory surplus are contributing to the downward trend in used car prices.
- Regional variations will play a significant role, with urban and rural markets experiencing different price trends based on local demand and supply.
Predictions for Used Car Prices in 2024
Expert Opinions on Price Trends
Vehicle shoppers and dealership owners alike still aren’t sure what to expect from used car prices. More than eight out of 10 used car dealers (84%) anticipate a decline in used car prices and values this year, according to Startline research. This sentiment is echoed by various industry experts who predict that cars, trucks, and SUVs will continue to fall in price throughout 2024.
Factors Influencing Price Declines
Several factors are contributing to the anticipated decline in used car prices. These include an increase in new car production, which reduces the demand for used vehicles, and a higher inventory of used cars on the market. Additionally, economic conditions such as rising interest rates and inflation are making it more expensive for consumers to finance vehicle purchases, further driving down prices.
Expected Market Stabilisation
While prices are expected to decline, some experts believe that the market will begin to stabilise towards the end of 2024. This stabilisation will likely be driven by a balance between supply and demand, as well as potential economic improvements. However, certain used car segments may still experience fluctuations, with some falling faster than others.
The question everyone is asking is, when will car prices go down? Let’s explore used car price trends that have emerged so far in 2024 and expert predictions on pricing through the rest of the year.
Impact on Buyers and Sellers
Advantages for Buyers
The used car market is collapsing in 2024, which brings several advantages for buyers. Falling used car prices mean that buyers can get more value for their money. Additionally, lower prices can make it easier for buyers to afford higher-end models or newer vehicles that were previously out of their budget.
Challenges for Sellers
While the declining prices are good news for buyers, they pose significant challenges for sellers. Falling trade-in values can make it difficult for sellers to get a fair price for their vehicles. Sellers may need to adjust their expectations and be prepared for longer selling times.
Trade-In Value Considerations
Sellers should frequently research their car’s value using online tools like CarEdge Sell, Kelley Blue Book, or Edmunds. This will help them stay on top of recent trends and negotiate better deals. It's important to note that used car values are changing by the week, so staying informed is crucial.
Before taking out a high-APR loan, check the latest 0% APR offers for new models.
Market Trends in Early 2024
Q1 Price Movements
Used car prices have been falling, just like many experts predicted. Over the first nine weeks of 2024, prices gradually fell each week. This trend indicates a consistent decline in the market, which is expected to continue throughout the year.
Vehicle Type Variations
Different types of vehicles experience price changes at different rates. For instance, cars, trucks, and SUVs continue to fall in price, but the rate of decline can vary significantly between these categories. Dealers need to consider these variations when making inventory decisions.
Wholesale Price Changes
Wholesale prices have also seen a decline, making it an ideal time for dealers to stock up on more inventory. The average used car sales prices in Australian dealers fell a further 0.9% during May 2024 and are now 6.8% lower on average than this time last year. This trend is likely to influence retail prices as well.
Dealers may find great vehicles at more affordable prices than last year or the year before. If you’ve been waiting for car prices to fall to stock up on more inventory, now is an ideal time to do so.
Dealer Expectations for 2024
Survey Insights
More than eight out of 10 used car dealers (84%) anticipate a decline in used car prices and values this year, according to Startline research. This sentiment reflects a broader uncertainty among vehicle shoppers and dealership owners alike, as they still aren’t sure what to expect from used car prices. The question everyone is asking is, when will car prices go down?
Dealer Strategies
Dealers are preparing for the anticipated price declines by adjusting their inventory and pricing strategies. Many are focusing on offering more competitive prices to attract buyers in a market where used SUVs and sedans are expected to see the largest price decreases. Additionally, some dealers are increasing their marketing efforts to highlight the value of their offerings.
Customer Reactions
Customers are likely to respond positively to the lower prices, but there is still a level of caution. Shoppers are looking for the best deals and are more informed than ever, thanks to the wealth of information available online. Dealers will need to be transparent and provide excellent customer service to build trust and secure sales.
The used car market trends have dramatically shifted over the last four years, and dealers must adapt to these changes to stay competitive.
Economic Factors Affecting Used Car Prices
Production Levels
The production levels of new cars significantly influence the used car market. When production is high, the supply of new cars increases, leading to a potential decrease in new car prices. These factors don’t just affect the new car market; they also drive price trends in the used car market. As new cars decrease in price, used cars generally do, too.
Inventory Surplus
An inventory surplus occurs when the supply of used cars exceeds demand. This surplus can lead to lower prices as dealers attempt to clear out excess stock. Following an unremarkable spring buying season, used car sales are weakening and inventory is piling up. After several weeks of back and forth, last week saw wholesale prices drop -0.49% in just seven days. Zooming out to the past month, we see that wholesale markets where dealers acquire and sell vehicles, used car prices are down one percent. That’s not much, but it’s the trend that matters.
Incentives and Discounts
Incentives and discounts offered by manufacturers and dealers can also impact used car prices. When new car incentives are high, consumers may opt for new vehicles over used ones, leading to a decrease in demand for used cars. This shift can result in lower used car prices as well. Understanding these trends provides valuable context for today’s used car market. While current prices are higher than historical norms, they are gradually decreasing.
Elevated used car loan rates are a critical factor to consider when making purchasing decisions.
Regional Variations in Price Trends
Urban vs Rural Markets
Understanding these trends provides valuable context for today’s used car market. Urban markets often see quicker price adjustments due to higher demand and more frequent transactions. In contrast, rural markets may experience slower changes in prices, influenced by local demand and supply dynamics.
Regional Economic Conditions
Regional economic conditions play a significant role in used car price trends. Areas with strong new vehicle supply lead to positive used car market conditions, offering more choice and improved affordability. Conversely, regions facing economic downturns may see a slower decline in used car prices.
Local Demand and Supply
Local demand and supply factors are crucial in determining used car prices. For instance, regions with a high concentration of commuters may see higher demand for fuel-efficient vehicles, impacting their prices differently compared to areas with less commuter traffic.
For people looking to buy a used car, you’ll likely find your dollar going further and potentially be able to buy a newer model than you expect. The continued drop in used car prices is likely to extend into 2024.
Future Outlook for Used Car Market
Long-Term Predictions
The long-term outlook for the used car market suggests a continued decline in prices. Experts predict that this trend will persist throughout 2024, driven by various economic factors and market dynamics. Dealers and buyers alike should prepare for a market where affordability becomes a key feature.
Potential Market Risks
Several risks could impact the future of the used car market. These include economic downturns, changes in consumer demand, and potential disruptions in the supply chain. Dealers need to stay vigilant and adapt their strategies to mitigate these risks effectively.
Opportunities for Buyers and Sellers
Despite the challenges, there are significant opportunities for both buyers and sellers. Buyers can take advantage of lower prices to purchase newer models or higher-end vehicles. Sellers, on the other hand, can benefit from increased demand as more consumers look to buy used cars due to their affordability.
The future of the used car market is online, with digital platforms playing a crucial role in connecting buyers and sellers efficiently.
The future outlook for the used car market is promising, with increasing demand and evolving trends. To make the most informed decisions when purchasing a used vehicle, it's crucial to have access to comprehensive car history reports. At Carify, we offer detailed reports that include everything from finance checks to odometer comparisons. Don't miss out on the best deals and ensure your peace of mind by visiting our website today.
Conclusion
As we move further into 2024, the trend of falling used car prices appears set to continue. This ongoing decline is largely driven by increased new car production and higher vehicle inventories, which are pushing down prices for both new and used vehicles. While this is advantageous for buyers looking to get more value for their money, it poses challenges for sellers and those looking to trade in their vehicles. The market is expected to stabilise with only subtle price shifts, offering a mixed bag of opportunities and challenges for all stakeholders involved. Keeping an eye on market updates and forecasts will be crucial for making informed decisions in this evolving landscape.
