Used Car Price Trends for 2023 (Updated Weekly) (2023)

FAQs

Will used-car prices go down in 2023? ›

Prices could drop up 5% for new vehicles and 10% to 20% for used vehicles in 2023, according to a report in November from J.P. Morgan. The basis for the prediction is that demand has stabilized and vehicle inventory is improving.

Americans planning to shop for a new car in 2023 might find slightly better prices than during the past two years, though auto industry analysts say it is likely better to wait until the fall. Since mid-2021, car buyers have been frustrated by rising prices, skimpy selection and long waits for deliveries.

As new-car production improves, demand for used cars will ease up and prices will continue to fall in the new year. The firm estimates that used-car prices will drop 10%-20% in 2023; new cars, on the other hand, are predicted to see a modest decrease of just 2.5%-5%.

The BLS reported in its January CPI report that new vehicle prices rose 0.2% (up 5.8% year-over-year)and used vehicle prices fell 1.9%, (down 11.6% y-o-y). While used prices have fallen for seven straight months, new car prices have steadily risen every month since March 2021 (based on revised CPI numbers).

Used car prices have likely peaked, but new car prices are set to remain elevated through end-2022. In 2023, prices are expected to decline by 2.5% to 5% for new cars and by 10% to 20% for used cars.

The end of the year — October through December — can be a good time to do your car shopping, as well. October is when new vehicle models head to showroom floors and dealers want to unload existing inventory, while November latches on to Black Friday deals, including autos.

But 2023 may finally bring some relief. As demand stabilizes and inventory improves, prices are expected to ease. Prices could drop up to 5% for new vehicles and 10% to 20% for used vehicles, according to a report in Novemberfrom the bank J.P. Morgan.

Key points. If your car is reaching the end of its lifespan, you may consider buying a new vehicle in 2023. Chip shortages, less inventory, and rising interest rates have resulted in drivers spending more money on new cars.

December saw a record drop in used-car prices

According to a January 2023 report by CoPilot, a personalized app for car buying, used-car prices fell in December for the sixth consecutive month, dropping 8.8% since January 2022.

Although used car prices are finally starting to decline, it could be years before the market returns to a pre-pandemic normal. A recent study conducted by the car insurance comparison site Jerry found that the used car market won't recover in the foreseeable future.

Will car prices drop again soon? ›

Based on recent industry data, the prices that car dealers pay wholesale for used cars dropped 14.9% during 2022, which means consumers should also start seeing lower prices on the lot. Money expert Clark Howard also predicts the conditions will continue to improve gradually each month throughout 2023.

CNN reported that it is likely that prices for new cars will begin to decrease over the next few months due to increasing supply. However, prices are not likely to drop to pre-pandemic levels anytime soon.

As new-car inventory begins to stabilize, J.D. Power forecasts that used-vehicle values will begin their descent to more normal levels by late 2022 and into 2023. “We do expect used prices to cool once new-vehicle production and inventories begin to recover,” Paris said.

The months of January through April are generally slow-selling ones and have the smallest discounts off MSRP. In fact, the month with the smallest amount off MSRP is February, with an average discount of about 5.7%.

In terms of the best time of the year, October, November and December are safe bets. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals. All three goals begin to come together late in the year.

Your rate may vary based on credit score, credit history, and loan term. Leasing is relatively similar to having a long-term car rental. If you've got the money on hand, buying a car is often the better option. Drivers can purchase a leased vehicle at the end of their term if they choose.

Traditionally, the end of the year can be a good time to find a deal on a new or used car, and you can still save some money with time and effort. However, car buyers may not get the same savings in 2022 that they usually see due to a few factors impacting car prices and monthly payments.

Which car should I buy in 2023? ›

“Over the course of the next two years, we're going to see used car prices retreat back to more normal levels. So by the time we get to 2025, that's really when used prices will bottom,” J.D. Power's Paris said. And even when prices do “bottom out,” they aren't likely to return to pre-pandemic levels.

The main reason for this is the shortage of new cars, but another major factor is the average cost of cars being sold – alternatively-fuelled cars are grabbing a larger slice of the new car market every month, and these cars tend to be more expensive than petrol- and diesel-powered cars.

Key takeaways: New and used vehicle prices are at an all-time high, but the amount of new cars available has declined since 2019. The reason why cars are so expensive right now is largely due to the pandemic. It resulted in a global chip shortage, the rise of inflation, a shortage of workers, and less inventory.

Used vehicle prices in the U.S. increased 0.8% from November to December but plunged 14.9% from one year prior, according to the Manheim used-vehicle price index released Monday, marking the biggest-ever annual decline for the index, which tracks the prices of used vehicles sold at wholesale auctions.

Used Car Prices Will Fall in 2023, but Older Cars Will See the Biggest Declines. After reaching absurd highs in early 2022, used vehicle prices have already fallen. They'll continue to ease in 2023, just not by as much as consumers would hope.

Based on your pricing homework, you should have a good idea of how much you're willing to pay. Begin by making an offer that is realistic but 15 to 25 percent lower than this figure. Name your offer and wait until the person you're negotiating with responds.

What is the cheapest day to buy a car? ›

Head to the dealership between the 16th and 20th of the month. Don't lock in the deal just yet. Instead, wait until the last two or three days of the month to negotiate.

Best day of the week to buy a car

Studies have shown that car buyers get better deals shopping on Mondays than any other day of the week. This is likely because car dealerships are generally not very busy early in the week which means the sales staff has more time to negotiate.

The best time to buy a car is when dealers are most motivated to hit big sales targets. That means you should shop during the end of the month, the end of the sales quarter, the end of the year, and holiday weekends like Black Friday. Weekdays, when dealers aren't getting as many customers, are also good.

Used vehicle prices are expected to come down further this year amid rising interest rates and improved availability of new cars and trucks, according to Cox Automotive. The firm expects wholesale used vehicle prices to end the year down 4.3% from December 2022.

If you're looking to buy a 2023-model-year vehicle, you may not have to wait around for long. That's because we're already seeing a handful of 2023 cars, trucks, and SUVs hit the market this spring.

Today's average used car price is about the same as the average new car price as recently as 2010. While the prices of late model used cars are down only 5% off their peak according according to Edmunds, the price of older used cars, those five years or older, have fallen 15% or more from their peaks early in 2022.

In fact, the month with the smallest amount off MSRP is February, with an average discount of about 5.7%. Things get better in the summer months: The introduction of new cars drives down prices on outgoing models. And finally, the discounts improve the most the closer you get to the end of the year.