Will Used Car Prices Go Down in 2023?
The price of used cars has been rising strongly since the middle of 2021. It could be said that the rise in prices presents an increasingly vertical line that seems unstoppable. But, at some point you will have to stop. Will car prices go down in 2023?
Used car experts and specialists have many opinions on this, but nothing is too clear.
What happened during the pandemic in the automotive sector?
To find out if car prices will go down, you have to go back to the beginning of the pandemic, the coronavirus, confinement, fear, insecurity, the news.
And it is that, during the pandemic almost everything was closed. And even those businesses and companies that did not close were forced to lay off workers, reduce the hours of the workday and, in addition, in some sectors they lost customers.
The first actions: fewer workers and reduced hours caused failures in the logistics chain of the automotive sector, which on average produced almost 9% fewer new cars.
And second, they had fewer customers. The reason is that in times of uncertainty we only consume products of maximum necessity, such as those in the shopping cart. But a car, which, although necessary, is always seen as a luxury or a great investment, is the first thing we take out of our heads.
Who was going to buy a new car in the most uncertain year? better wait a bit… And those who really needed it because they didn’t have another or theirs had just become unusable, went to a second-hand one.
What was the consequence? The demand for second-hand cars increased, especially after the pandemic and therefore… their prices began to rise, while new cars maintained their price and reduced their sales.
Will the price of cars go down? We analyze the reasons
And now, after the pandemic, will car prices go down? No, a drop in prices is not expected among new cars or among used ones. In fact, these do not stop rising in price even now, long after the pandemic.
The logistics sector and times
The reason is that the delays that the automotive sector has suffered are still being reflected. There is not enough supply at dealerships due to poor logistics and lack of staff. In other words, a customer is often looking for a car to test drive and it simply isn’t available. And it is that since the pandemic, many fewer new cars have been manufactured.
Also, wait times are longer and customers get desperate waiting weeks to get a new car.
Therefore, used cars now have two advantages: there is more variety and there is more agility in the purchase.
Best quality used cars
Likewise, it is now easy to find used cars in very good condition, similar to that of a new car.
The reason is that many people, fearing the pandemic, decided to sell their new or pre-owned car and continue using the old one or start using public transport.
The consequence has been that the fleet of second-hand cars in very good condition has increased, and therefore there are more interested users: the prices are somewhat lower and the car is identical and has a new odometer.
For this reason, the demand for used cars is increasing and, consequently, prices. Without the counterpart, the prices of new cars fall.
Less variety among new cars
Also due to factory closures and logistics and profit issues noted above, fewer new models have gone on sale. Therefore, those passionate about the motor world find less incentive to buy in 2022 or 223 new cars.
Maximum savings for consumers
On the other hand, upper-middle, middle and lower class families decided to tighten their belts during the pandemic and many still continue to do so. Times are still uncertain and it is not the time to buy a new car, so those who really need it, go to a second-hand car to save.
Used cars can drive up prices
But this is turning against the population, because the more second-hand cars are bought, the more sellers can raise prices without repercussions.
Therefore, to the question, will car prices go down? the answer is clear: No. Not at least during 2023 and probably not during 2024 either.