Are Used Car Prices Dropping In 2025?
Used car prices have dropped by more than 5% in 2024 compared to the past year. This is great news if you plan to buy a used car this year. However, there has always been a lot of fluctuation in the used car market in the past few years. That’s why many buyers wonder whether this downtrend will continue in 2025. Let us dig into the used car prediction report to find out whether are used car prices dropping in 2025 or if it’s just a temporary blip in 2024.
Used Car Market Developments In 2024
From 2021 to 2023, new and used car prices skyrocketed because of a chip and semiconductor shortage during the pandemic, which prevented many customers from buying the vehicles they wanted. In the used car market, from 2020 through the crazy peak at the end of 2021, auction prices spiked by a mind-boggling 66% or $9943.
After years of increasing used car prices, we’ve finally seen used car prices dropping in the recent months of 2024. According to the Consumer Report, used car prices sharply declined from 5% to 10% or even more in 2024 compared to previous years. Specifically, the prices on 4 to 7-year-old used cars are down around 19%, and used cars from 8 to 13 years old decrease 18%. If you’re in or were in the market for a used car in 2024, it’s good news since used car prices are said to have the lowest point in the last 3 years.
>> Related post: When Is The Best Time To Buy A Car? – Find Out The Answer Here
Are Used Car Prices Dropping In 2025?
2024 is almost wrapping up so if you still haven’t had time to buy yourself a used car this year or you’re going to purchase a used car in 2025, do you wonder that are used car prices going down in 2025 like 2024? Should we buy used cars today, tomorrow, or in the next year? Everything will be clear up in this part:
Backed by the latest data and trends, we predict that used car pricing will remain stable compared to 2024 or may slightly decrease in 2025. That can be great news for used car shoppers. Used car prices have been failing from their historic highs in 2024 and reverted to lower price points where they belonged. They are still not as low as they should be, but it’s a step in the right direction.
For slower-selling new cars with a higher supply in 2024, 2025 will likely bring lower prices for both new and used cars. Most analytics predict a slight drop in used vehicle prices in 2025. There’s some relief in sight for car shoppers when buying used cars in 2025. Inventory is up and prices for new and used vehicles will drop, especially for electric vehicles and used luxury vehicles.
Why Are Used Car Prices Going Down In 2025?
Ups and downs are the evitable parts of each industry. Everything that has a rise also has a fall. Used car prices may keep declining in the first few months of 2025 but what’s behind this drop?
The effect of the shortage of new cars caused by stalled semiconductors after the pandemic is gradually improving. The increase in the number of new and used car inventories gives car buyers more options when purchasing vehicles.
From 2019 to 2022, the semiconductor production was disrupted which caused a shortage of new cars, customers who were planning to buy new cars ended up buying used cars instead. The State of the American Driver report said 35% of buyers bought used cars in 2022 since they couldn’t find a new one.
A lot of effort was made to recover used inventory from the pandemic. So that is why we’ve seen the broader drop in used-car pricing in 2024 and this trend will continue for 2025 thanks to gradually improving new and used car inventory.
Another factor contributing to dropping used car prices is that wholesale prices are declining. Wholesale values are decided by demand and when demand drops so do prices. After the pandemic, inflation and high interest have made car buyers more cautious about large purchases like a vehicle. This overall economic uncertainty contributes to the slowdown in the used car market. This caution may cause reduced demand and put downward pressure on prices as dealers. The overall economic uncertainty also contributes to the slowdown in the used car market.
Essentially, a combination of increased supply of new cars, higher borrowing costs, and general economic concerns are converging to drive down used car prices.
Watch more:
Shopping For Used Cars? Now May Be The Time To Buy
Is it a good time to buy a used car? Yes, 2024 and 2025 may be the right time to invest in a second-hand car whether privately or through a car dealer. Here’s why:
- Lower prices: As we discussed, used car prices are declining, meaning you can potentially get a better deal than you would have a year or two ago.
- More inventory: With new car production increasing, there’s a better chance of finding the used car model you want.
>> Read more: This Is What Happens To Unsold Cars At Dealerships
However, our recommendation for buyers in today’s market is to act quickly and make a wise decision if you plan to buy a used car in 2024 and the next year. Continuous fluctuations in the used car market and the global economy make it difficult for us to accurately predict car price trends in the long term.
Here are our tips for making a smart purchase:
- Do your research: You should buy a used car from trusted dealers and compare the prices from different dealerships or commercial car websites to get the best deal, especially If you are a first-time buyer.
- Check thoroughly a car history, documentation, and maintenance report of used cars.
- Have the car inspected by a mechanic: This will help you avoid buying a car with hidden problems.
Good luck with your car search!
