If you’re in the market for a used vehicle, some auto industry experts are recommending waiting until the end of the year to make your purchase.
“The cars that dealers have now are used, they used to buy them when we had very high used car prices in 2022. Now it is 2023, I think the prices will remain stable for a while and then when they fill them with cars with cheaper cars that are being sold at auction – now the prices will start coming down,” said motormouth Zack Spencer YouTube channel.
Unlike the past few years, which saw the cost of pre-owned vehicles increase due to a lack of new car inventory, Daniel Ross of Canadian Black Book said that older cars are expected to fall to more normal levels and estimated that Used vehicles are depreciating about 2 percent. percent per month.
“Typically it’s about 10 to 12 percent overall that we see vehicles depreciate in value in a typical year,” Ross explained. consumer affairs,
“We’re hoping that we’re now getting back to depreciated values rather than appreciating values in the used market.”
Most trends are rising interest rates and slowing consumer demand.
“We hear a lot on the mortgage side that have gone up, but it’s not unusual for financing rates to be five or six percent when they used to be zero or one and a half or one and a half 24 months ago,” Ross said.
Stocks of vehicles in general are expected to replenish as potential buyers take a closer look at their bottom line.
“So the new cars we’ve been waiting on, people have been ordering for a year, a year and a half, two years,” Spencer said. “Those cars are now going to come at very high interest rates. So, people who were waiting for those cars may not be able to buy them now.”
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Analysts also expect that higher fuel costs will continue to influence consumer choices when it comes to choosing a vehicle.
Right now, Ross said pick-up trucks and full-size SUVs are in low demand. “With higher gas prices and increased borrowing costs, there is now less demand in the market to get those expensive cars up and running,” he said.
In contrast, Ross said used compact SUVs and small vehicles are retaining their value and not declining in value as rapidly as larger vehicles.
Pricing for older vehicles has started to drop, he said, but it’s best to wait before buying.
“If you can wait this year, it might be worth it. Prices have started falling. They’re probably going to have relative stabilization this year so timing is important,” Ross said.
“The cost of borrowing is very high now, whether it goes down in 12 months, 18 months, we can only guess, but if you have to buy a vehicle in the used market, aim for a smaller vehicle for now , if you can get away with it.”
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