Rates of Covid-19 throughout the US was not the only thing rising during the pandemic. The unexpected cost of used vehicles reached unprecedented highs leaving many wondering if affordable used cars still existed.
If you were one of the many lucky people who could afford to let go of your used vehicle, you likely got a high trade-in value that you could only dream of today. According to Business Insider, trade-in values for used vehicles hit an all-time high of $25,556 in June 2022 with prices peaking in April 2022 at an average of $31,300.
With these sky-high prices, some drivers opted for selling their vehicles and fetching a profit —of course, that is if you had the right vehicle. According to Kelley Blue Book, used vehicles that fetched the highest resale value in 2022 included the Toyota Tundra, GMC Sierra, Toyota Tacoma, Ford Maverick, and Chevy Corvette.
George Chamoun, CEO of ACV, a digital auto marketplace shared with Business Insider that for the longest time during the pandemic, all drivers heard was how valuable their used vehicles were and how much money they could get for them if they traded them in. Chamoun explains that while that was the case during the early and midpoint of the pandemic, things have changed in today’s market. “These used car values have been dropping over the last year. As the consumer goes into the dealership, it’s not going to be as high as it was last year at this time.” He adds, “many of these vehicles have dropped anywhere from 15 to 30% less year over year.”
What’s Driving Down Costs in the Used Car Market?
While the cost of a used vehicle is still relatively high, prices have cooled off significantly over the past couple of months. Factors that weren’t present during the pandemic have heavily influenced this decrease in prices today.
For starters, inventory is a lot higher than it was during the pandemic. This means if you’re going to trade in your vehicle, you’re not going to get as high a value as you would have when inventory was low.
The semiconductor chip shortage which was severe during the pandemic has now begun to stabilize itself. With that, the production of new vehicles has increased, pushing drivers back into the new car space, drivers who were otherwise shopping with used car dealers when there were no new vehicles to shop from. Finally, increased interest rates have also decreased demand which has influenced costs.
Did Your Vehicle Miss Its Opportunity
By and large, you likely won’t see those high trade-in values if you bring your vehicle into used car dealers in today’s market. Used vehicles five years and older have fallen 15% as compared to their peaks in the spring and summer of 2022.
Still, that doesn’t mean you’ve missed the boat entirely. If you have certain models including a Toyota Tundra, Toyota Tacoma, Tesla Model X, or a Chevy Corvette, you can look forward to higher resale values as compared to other vehicles. While you won’t get those record-high trade-in values, you can still look forward to significantly higher rates. For drivers on the fence, one thing you can count on is these high peaks likely won’t happen again in the future. If you’re ready to let go of your used vehicle, now might be the best time to do so.
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