Here’s when you can look forward to used car prices finally going down
The average price of a used car is up by about $6,000, thanks to supply-chain issues, but prices may drop again by about 30%.
In just five months, the average asking price for a used car climbed from about $21,000 to over $27,000, according to Cox Automotive.KPMG analysts predict demand will taper and supply will increase by as early as October 2022.Still, KPMG notes continued interruptions caused by COVID-19 variants could disrupt the supply chain and make it difficult for automakers to source critical parts for new vehicles.
Also see: Why is it so hard to find an auto mechanic these days?The financial impact of declining used car values Consumers who have taken out loans to buy used cars over the past few months may be in for a shock if values tumble. A consumer is considered “upside-down” on a loan if they owe more on the car than it is worth, and that could easily happen to many if used car values slide by 30% over the course of a year.
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I'll admit to expecting car prices to drop this year rather than next year. The chip shortage has been easing for a while but the Omicron wave was a setback.