If you’re planning to buy a used car, you might want to act fast. Dealers paid more for used cars at auction in January than they did in December, which means higher prices are on the way for consumers.
According to Cox Automotive, the parent company of Kelley Blue Book and Manheim Auto Auctions, wholesale used car prices increased by 0.4% in January compared to December and are now 0.8% higher than they were a year ago. Since wholesale price changes typically affect consumer prices within six to eight weeks, expect higher used car prices by April.
How Much Are Used Cars Going Up in Price?
Used car prices were already climbing before January’s increase. In December 2023, the average used car price was $25,565, reflecting a 0.25% rise from November. While January’s exact retail figures are still being analyzed, the rise in wholesale prices strongly suggests further increases in February and March.
Why Are Used Car Prices Increasing?
Several factors are contributing to the increase in used car prices:
- Higher Wholesale Prices – Dealers are paying more at auctions, which translates to higher resale prices.
- Tariff Concerns – President Trump has threatened a 25% tariff on goods from Mexico and Canada starting March 1, which could raise the cost of both new and used vehicles.
- Market Demand – Demand for SUVs, pickup trucks, and luxury vehicles remains strong, pushing their prices up.
Are Any Used Cars Getting Cheaper?
Yes! While most used cars are becoming more expensive, some sedans are actually seeing price drops. In January, prices for midsize and compact cars fell, while SUVs, trucks, and luxury vehicles saw price increases.
If you’re in the market for a budget-friendly used car, a sedan might be your best bet.
Should You Buy a Used Car Now or Wait?
- Buy Now If You Need a Car Soon – Prices are expected to rise further by April, so locking in a deal now could save you money.
- Wait If You’re Shopping for a Sedan – If current trends continue, sedan prices may stay stable or drop slightly in the coming months.
- Keep an Eye on Tariffs – If the 25% tariff goes into effect on March 1, new and used car prices could rise significantly, making early 2024 the cheapest time to buy.
Used car prices are trending upward, and higher costs could be coming by spring 2024. If you’re looking for a truck, SUV, or luxury car, consider buying sooner rather than later. However, sedan shoppers might find better deals in the coming months. Stay informed, compare prices, and make your move before costs climb even higher.
FAQ’s
Why are used car prices rising?
Used car prices are increasing due to higher wholesale costs, strong demand for SUVs and trucks, and potential tariffs on imported vehicles.
When will used car prices go up?
Since wholesale prices increased in January, retail used car prices are expected to rise by April 2024.
Are any used cars getting cheaper?
Yes, prices for midsize and compact sedans dropped in January, making them a good choice for budget-conscious buyers.
Should I buy a used car now or wait?
If you need an SUV or truck, buy now before prices rise further. If you’re looking for a sedan, waiting could lead to better deals.
How will the 25% tariff affect used car prices?
If enacted, the tariff could significantly raise the price of new and used cars, making early 2024 the best time to buy.