Used cars have depreciated slightly—when to expect the car market to be normal again

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Automotive analysts predict new vehicle prices will remain elevated — and possibly continue to rise — while used-car prices may moderate slowly.

Instead, new-vehicle prices — already at record highs — will remain elevated, automotive experts say. At the same time, used-vehicle pricing should moderate as the Federal Reserve continues raising interest rates to curb inflation. Analysts... This article is reprinted by permission from NerdWallet. Instead, new-vehicle prices — already at record highs — will remain elevated, automotive experts say.

And natural disasters like Hurricane Ian, which wreaked havoc in the Southeast, can potentially leave hundreds of thousands of cars totaled, further crunching supply and driving up prices.New-car prices continue to rise The average new-vehicle transaction price in August was $48,301, according to Cox-owned Kelley Blue Book — a record number fueled by low inventory, high demand and a shortage of incentives.

But if new-car demand falls, sellers may offer discounts to “sweeten the pot a little bit to pull customers in,” Chesbrough says. He adds that car buyers should see more normal pricing as the new-vehicle supply recovers.New cars’ new normal Pre-pandemic inventory levels are unlikely to return any time soon if ever, automotive experts say.

Chesbrough predicts that consumer habits could change following the pandemic. For example, instead of same-day purchases on the lot, customers may opt to order customized vehicles and wait for delivery.Used-car prices inching down Used-car sales have defied logic, with some used vehicles fetching higher price tags than their new counterparts, mainly due to scarce inventory.

Demand, however, may increase as buyers with lower incomes and below-average credit scores turn to used cars because they’re priced out of buying new vehicles.

 

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What Hurricane Ian has done to the used car marketOne estimate says the storm destroyed between 30,000 and 70,000 cars. Used car shoppers should be vigilant about the risk of buying a flood-damaged car.
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