- The pandemic has caused supply-chain problems, which have increased the prices of new and used cars.
- Experts predict that supply constraints will ease in the second half.
- Although car prices are stable right now, there is a possibility of a decline in the future.
The pandemic destroyed supply chains and sent asset prices wild, throwing everything into chaos. This was not just for stocks, bonds, and cryptocurrency. Consumers witnessed home prices rise along with boat prices and almost everything else.
Used car buyers used to be able to lock in amazing deals, but this is no longer the case.
CNBC reports that used car prices have increased 16.1% compared to last year. New car prices have risen 12.6%. The average monthly car payment in June was $700, and in May, it was $47,000. These numbers are both high.
According to price analysis of used vehicle inventory by Cars.com (NYSE CARS), “median used-vehicle pricing has been on an upward trajectory since the inventory scarcity began. They’ve risen every month since January 2021, with only a short plateau in the summer.”
Forecasts for Car Price Trends
Paris thinks there may be a small pullback in car prices this summer. The industry will see an increase in sales through the end of the year. Paris says that the industry should see a stabilization in production during the second half of 2022 as supply constraints decrease.
Investors and consumers hope this will result in normalized production and fewer supply-chain delays. If this is the case, then we may see car prices drop in the near future. J.D. Power says that used-vehicle values will begin to fall to more normal by late 2022 and 2023. J.D. Power predicts that “used-vehicle prices will begin to decline to more normal levels in late 2022 and early 2023.”
KPMG, a consulting firm, expects a significant drop in used car prices. They anticipate that used-car prices will drop by 20%-30% in the next few months.
Kelley Blue Book concludes that the second half is “starting looking better” for car buyers. With inventory “slowly starting to recover, especially in the used market,”
when will car prices drop in 2022?
- Read also Are used car prices dropping in 2023?
