Has the Used Car Bubble Burst?

With the prices of used cars coming crashing down over the last two years, has the used car bubble now B U R S T ??

Many industry experts are warning that the value of used cars will come crashing down after the two years of record highs. 

With production of new cars having come to a near grinding halt over the last couple of years, supply chains of new cars have all but dried up. Added to this  behavioural changes after the pandemic mean people are moving away from mass transport. These factors have caused used vehicle prices to skyrocket over the last few years. 

Why have secondhand car prices been so volatile?

Rising interest rates and lead times easing up on new cars, mean the used-car market is definitely experiencing a slowdown. 

However, what is surprisingly bizarre is that a few second hand models still command extraordinary prices. Vehicles like the Toyota Land Cruiser, Ford Ranger Raptor, and Suzuki Jimny are still commanding top dollar. Other not so in demand secondhand car models are back to their pre-pandemic levels.

Craig Moore is an auto industry veteran of over 30 years at Craig Moore Wholesale Cars. He says “The used-car bubble has definitely burst”. He says that higher end and high-demand cars are still holding their value. However the run-of-the-mill cars are either back to pre-pandemic prices or on their way there very quickly. During the pandemic, Mr. Moore struggled to find even one or two good cars every week. But now he’s getting flooded with calls from people wanting to sell their cars. This gives him the luxury of cherry-picking the best ones. So secondhand car yards have pivoted from being car parking lots, to dealerships moving used cars with lightning speed!

Another expert in the used-car business believes that prices have dropped by 15% in the past 3 months. Are you thinking of trading in your old vehicle? If so, you should be prepared for lower trade-in offer prices. Even the dealers themselves are unsure where the market will bottom out. And, they need to recoup some of the losses incurred during the pandemic.

Thinking of buying or selling a used car?

But, if you’re in the market for a second hand vehicle, there’s good news! Most dealers are very motivated to shift their stock and may offer you a great deal. Rather than having the vehicle sit in their used car dealership like a parking lot. Moody Analytics data reveals that the value of the used car market has fallen by 12% from the peak in May 2022. And it’s expected to dip further. That’s thanks to the rising cost of living and the reduced waiting times for new vehicles. No car dealer wants to just park a car in their showroom and watch it. They would so much rather sell it you!

You can definitely expect to negotiate yourself a deal! So, keep your eyes peeled and your ears to the ground! It could be your lucky day to pick up a bargain on a used car to park in your garage. And once you have your new car, make sure to protect your parking spot with a parking bollard from thatsmyspot!

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