Used car prices trends for 2022 have been interesting. In 2021, unlike any other time in history, used car prices increased. What used to be a depreciating hunk of metal, was an appreciating asset that nearly had a better rate of return than Bitcoin. With used car prices remaining volatile, it’s never been more important to track the value of your car.
As of June 2022, used car prices have begun appreciating again. During the first quarter of 2022 used car prices dropped nearly 5% on the wholesale markets. Now they are rising again.
The ongoing chip shortage and ensuing new car shortage has created incredible demand for used vehicles. This has recently been exacerbated by the conflict between Russia and Ukraine. Because of this, used car prices on the wholesale and retail markets have increased to unprecedented new heights. We’ve heard from many YAA members who have seen their car’s value increase incredible amounts.
👉 Bookmark this page. Just like we did last year, each week we’ll update this URL with the latest used car price trends. Our hope is that by being informed of the trends in used car prices you can make smart financial decisions about when to trade-in, sell, or buy a car.
Without further ado, let’s dive in.
Used Car Prices 2022 – June 2022 Update
Unless you’re in the 1% of Americans who drive an electric vehicle, you’re feeling the pain at the pump. In fact, everyone is feeling the effects of record gas prices as goods and services raise prices to account for fuel costs. Analysts at Black Book are seeing the impacts of gas prices on America’s used car sales. Here’s their overall assessment of the situation:
“Fuel prices appear to still be having a heavy influence on the demand in the wholesale marketplace. Compact Cars continue to perform very well along with Sub-Compact Crossovers, but the gas-guzzling Full-Size SUV segments continue to experience the heaviest depreciation, as demand in the lanes wanes for these vehicles.”
In January, February and March of 2022 we finally saw used car prices decline on the wholesale and retail market. In April, used car prices leveled off, and now in May we have seen the market reverse and used car prices are increasing once again. Some segments have seen significant increases. What types of used cars are dropping, which are increasing? Is now a good time to buy a used car? Should you sell your car now, or wait for prices to go back up? How high will prices go back up? Let’s answer those questions and more.
How much have used car prices increased so far in 2022?
Through April , used car and SUV prices declined by ~5%. This was more depreciation than we’d expect in a “normal” year for the same time period. The rate of depreciation increased in February from January, however the trend reversed in March and April. Now, in May and June, we have seen a reversal, with used car and SUV prices increasing week-over-week on the wholesale market.
The latest data from mid-June shows nearly universal price increases in the car segment.
This is because rental car companies have been bidding up the price of used cars at the auctions as they try and stock up their fleets for the Summer travel season. The winter is typically when used cars depreciate the most. We ended last year with used cars appreciating.
Not every vehicle is made the same. We are finally seeing the impact of rising gas prices. Compact and sub-compact cars are appreciating rapidly in the wholesale markets. This is because consumer demand for these vehicles is high. Rental car companies are also very interested in purchasing these vehicles.
Sub-compact and compact cars have appreciated each week for over a month now. Their weekly gains have been anywhere from .5% to 1% each week. Consumer demand for “affordable” used cars, plus rental car companies purchasing newer used compact cars has forced their prices higher and higher.
On the other end of the spectrum, gas guzzling vehicles had been taking a beating. Compact luxury crossovers and SUVs continue to appreciate, however compact crossovers remained flat this week.
As always, full-size vans appreciated even more (now ~76 weeks in a row of appreciation). Since the onset of the pandemic, full-size vans have appreciated more than 60%. We recently learned that production of Ford Transit Connect vans would be halted in Ukraine. There is no sign that van prices will depreciate again anytime soon.
Year-Over-Year Prices Remain High
Used car prices in 2022 are off to a more stable start than we saw in 2021. Still, we appear to be settling in at a new normal of higher prices. The graph below looks at trends in wholesale prices of 2-6-year-old vehicles, indexed to the first week of the year.
Older used cars are appreciating
A new phenomena we have begun tracking is that older used cars are appreciating more rapidly than younger used cars.
This is primarily a function of consumer demand. Retail customers that want to purchase a car at a sub $20,000 price-point are being forced to look at older used vehicles because the new ones have increased in value beyond their budget. This is scary, crazy, and a whole host of other words …
What’s causing used car prices to increase so much?
There are two culprits for why used car prices have continued to increase rapidly.
First, the ongoing chip shortage and lack of new car production.
Second, rental car companies are bidding up used cars at auction like crazy. With many manufacturers abandoning their fleet sales this year, rental car companies are going to the auto auctions and spending like crazy to buy vehicles.
Is now a good time to buy a used car?
Yes. If you NEED to buy a used car in the next six months, now is a good time to go to a dealership and negotiate on a used car. Dealerships are incurring a lot of floorplan expense, and as used car values decline they are getting nervous of holding onto inventory for too long.
Just like pre-pandemic times, you can go to a dealership and negotiate on a used car. Be sure to use our email scripts, leverage the market days supply, and your knowledge that wholesale prices are falling.
When should I sell my car to get the most money?
We still think that used car prices will increase again in the spring time. If you don’t need to sell a car right now, we would suggest waiting until the spring. The chip shortage is not over, and until there are enough new cars manufactured we expect used car prices to increase.
To sell your car for the most money, be sure to read this guide.
How much did used car prices increase in 2021?
Depending on who you ask (Cox Automotive, Edmunds, CarGurus, or Black Book), retail used car prices increased anywhere from 32% to 36% in 2021.
Black Book shows a 35% increase in retail used car prices for 2021 (the purple line). For comparison, the orange line shows a 7% appreciation for used car prices in 2020, and the blue line shows a 3% depreciation of used car values for 2019.
Here’s a month-over-month table showing used car price trends for 2021:
|Month||Average Used Car Price|
This data, supplied by Cox Automotive, shows the incredible ascent used car prices took in 2021.
Used van prices increased the most
Different types of vehicles have appreciated more than others. Vans have increased in value the most of all used cars. Take a look at this chart and data from CarGurus.
In 2021 used van prices increased over 56%, whereas CarGurus’ data showed a more modest (yet still insane) 34% increase for used car prices in general.
Used van prices have increased the most across vehicle segments for a few reasons:
- Vans are typically lower profit new vehicles for automakers, and as a result of not having enough chips to produce new vehicles, automakers are drastically limited production of new vans;
- Many people have taken to converting vans into their living quarters;
- Many businesses that previously would have bought their vans from fleet sales are going to the used market to find supply.
For these reasons, and many more, used van prices have increased the most of any segment of vehicle.
Wholesale used car price trends are even crazier
Every used car has two prices; the wholesale price, and the retail price. As consumers we typically concern ourselves with the retail price, and with good reason, unless you have a dealer’s license you can’t buy a car wholesale at an auction.
That being said, wholesale used car prices are the lifeblood of car dealers, and the used car price trends we saw on the wholesale side in 2021 were truly unfathomable. While retail used car prices increased ~36% in 2021, wholesale used car prices rose 52%.
There is an obvious interplay between wholesale and retail prices. As wholesale prices increase, we can expect retail to prices to do the same. Here at YAA we are concerned that retail prices will stay highly elevated for a long time (potentially all the way through the fall of 2022) because car dealers will not want to discount their inventory that they grossly overpaid for earlier in the year.
Thanks to our friends at foureyes, we can share with you this real-time updating data set on used and new car prices.