Used Car Prices Drop Faster Than Expected, Now 21% Below 2021 Peak
The wholesale price of used vehicles fell 7.0% by the end of 2023, a steeper decrease than projected, meaning that prices are almost 21% below their peak during the pandemic in December 2021. The last two weeks of 2023 saw significant declines in the three-year-old used vehicle market, with average prices falling 1.4% in December. The price drops were seen across all segments with notable decreases in the luxury segment (6.9%), pickup segment (6.5%), and SUV segment (6.1%), but the most significant drops were in the compact car segment (11.7%), the midsize car segment (8.1%), and vans (7.9%). However, this led to an increase in sales conversion rates. Despite strong sales, Cox Automotive predicts the used vehicle market will continue to depreciate faster than usual because of the pandemic’s price bubble.
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