Car Title Pricing Alert For 2023

So what is going on with used car prices and was this recent little blip and drop of prices just a head fake and it’s gonna only be a drop in the bucket it may be that if you’re in the market for a used car now might be the time to buy because they may go up again you might be expecting used car prices to crash but here’s some big headlines and some data behind the scenes that show why that might be the case.

Supply and Demand Issues
First of all according to CNBC there may not be a return to normal for a used vehicle Market there was a decline in price toward the end of last year so in 2022 but inventories remain low and the pause in production might make used cars back up on the upswing we’re seeing that already used car prices are surging again this is from March 30th so whenever you’re watching this this is you know a beginning of 2023.

Recent Trends in Used Car Prices
According to the article it says nice while it lasted for nearly a year the average used vehicle price has been edging edging it didn’t crash it was edging towards affordable for millions of people the relief felt belated and slight but it was welcome but supply of used vehicles failing to keep up with demand prices are creeping up again with signs of pointing to further increases well why is that well you got to remember during 2020 and 2021 new cars were not produced at the same volume that they were in the past so now 2020 you’re three years later a three-year-old used car is a 2020.

Production Gaps and Inventory Issues
They hardly made any new cars in 2020 so the amount and volume of available inventory is incredibly low because you’re going through that dip of where new cars weren’t produced at the same time demand for used cars is going through the roof people want to buy used cars why is that well here’s why new cars are now at fifty thousand dollars average transaction price right so the executives at Toyota says will be paying 50,000 average transaction prices for new cars soon really already I mean right now the average new car transaction price I believe is 47, 48 thousand dollars and it’s only going up and the used car market isn’t going to slow down either.

Affordability and Market Pressure
So there’s a lot of things that play that make the pricing of used cars to be under pressure on the upward side so if you’re looking for a used car that may be a problem it’s also comes in at the lower end of three or four thousand dollar range let’s take a look according to one dealer many customers can’t afford either new or late model use some would be would be buyers he knows are using tax refunds to make ends meet a used inexpensive car is now becoming more of a luxury what the market needs right now are vehicles that are three four and five thousand dollars behind the vehicle shortage and inflated prices is supply and demand it’s real simple right again they repeat the fact that new cars are at forty eight thousand dollars beyond the reach this is going to make a return to what they call normal notice normal is in quotes normal just means what it was four or five years ago That’s History it’s not happening anymore.

Historical Context and Current Market
Right in 2018 or 19 there were plenty of new cars being produced you could buy a really nice new car for thirty thirty-five thousand and in 2014 or 15 there were tons of cars produced so a three-year-old used car was easy to find in 2018. right if you’re in 2019 18 and you’re looking for a three-year-old car well 2018 minus three is 2015. 2015 there were I believe 12 million new cars produced maybe 14 million there’s plenty of them around well now fast forward to 2023 you go back to 2020 three years ago there weren’t that many cars produced and the new cars are a lot higher price so all these are coming together to make finding a good used car for a decent price a very difficult Prospect.

Interest Rates and Financial Impact
And with the fact that interest rates are high one of these articles showed that a used car interest rate now I believe it said it’s 11 let’s take a look I believe it was in this one where it talked about the percentage rate yeah 11.3 percent up from 8 percent a year ago so you went from 11 from 8 to 11 in one year and that’s going to have a big effect on your ultimate car payment you know if you get a three-year-old car you might be able to get a four-year loan and that’s going to be a lot higher payment than a five-year loan on a new car at 11 you know you’re back up in the six seven hundred dollar range per month for a used car new cars are even worse right now new cars are averaging about a thousand dollars a month for a payment on a fifty thousand dollar car.

Conclusion
So keep this in mind as you’re shopping and if you know you’re going to need a car in the next couple years now might be the time to buy because it’s it’s possible that the prices aren’t going to go any lower and they might start creeping back up.

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