It should come as no surprise to hear that used-car prices have been skyrocketing the past couple of years, mostly as a result of supply-chain issues that formed late in the pandemic. Indeed, it seems like prices for everything from food to fuel to appliances are all higher now than in the past couple of years, but this trend is even affecting used cars.
A slightly higher grocery bill is not necessarily a problem, but if you are in the market for a used vehicle, you could be in for some sticker shock. On average, most people who are in the market for a used car could be paying an additional $10,000 or more than the typical depreciation value of most used cars out there. That is an increase of roughly 43 percent, according to data taken from the “Return to Normal” index, recently published by the car-shopping app, CoPilot.
Essentially, the average price for a used car is more than $33,340, a 0.5 percent bump from May’s index price. Fortunately, it is not as high as the peak—which was $172 higher, in March—but, still, the average price for a used vehicle should be closer to $23,300, under normal depreciation.
The interesting thing is that consumer buying is strong right now, in part thanks to carryover from the new-car market. Recent supply chain issues have led to a shortage in computer chips, which means fewer new cars are being made, but that, apparently, is not stopping those who need new wheels.
CoPilot CEO Pat Ryan comments, “Despite signs of a slowing economy, rising interest rates and high fuel prices, the used-car market is holding firm.”
Of course, the premium buyers are paying, these days, depends largely on the age of the vehicle. Newer vehicles (<3 years old) are currently priced about 45 percent higher than “normal”. Vehicles between 8 and 13 years old, on the other hand, are only about 43 percent higher than normal. Still, that is not much of a difference.