Used Car Values Show Signs of Cooling Down After a Period of Record Highs
Monday, September 20th, 2021
Used vehicle prices and trade-in values are finally trending downward after rising all year and skyrocketing this summer, according to the car shopping experts at Edmunds. Edmunds data reveals that the average value for all vehicles traded in during the month of August dipped to $21,058, a 1% decrease compared to $21,261 in July. The average transaction price for all used vehicles also decreased, dipping to $26,308 in August compared to $27,245in July, a drop of 3.4%. Edmunds experts say that used vehicle demand is declining because consumers who had an urgent need for a vehicle likely already bit the bullet this summer and made their purchase, and those who can stand to hold off on a purchase are likely biding their time until better deals are available.
"Minor percentage decreases aren't typically a marker of big news, but considering the meteoric rise we've seen in used prices and trade-in values over the last few months, it's safe to say that this is a notable milestone," said Jessica Caldwell, Edmunds' executive director of insights. "The used market may have finally hit a peak in August, but the industry is still facing a long and uncertain road ahead. New vehicle inventory is still very thin due to the global chip shortage, and challenges created by the Delta variant are placing further pressure on production timelines. The supply chain is so fragile at this point that it's possible that we could see used vehicle prices and trade-in values creep up again."
"If you currently own a car but also know that you need to make a replacement purchase soon, we'd strongly advise you to consider selling now to maximize the value of your trade-in," said Ivan Drury, Edmunds' senior manager of insights. "Your used car's value is one of your biggest negotiating tools in today's challenging market. Waiting any longer to sell or trade in could cost you hundreds, if not thousands, of dollars as we approach the new calendar year, when depreciation typically accelerates."
Consumers can check on the value of their own used vehicle on Edmunds by getting a free online appraisal.