Market Analysis Reveals Potential Plateau in Used Car Pricing Trends

Nearing an Apex: Used Car Prices Show Signs of Plateauing

According to the recent 2023 Intelligence Report from CarGurus, average listing prices for used cars experienced an increase in May. However, it appears that prices may be approaching their peak. By the end of May, the average listing price (ALP) reached approximately $30.9k, reflecting a 0.4% rise. Nevertheless, towards the end of the month, prices started to decline, indicating that the wholesale price decreases reported since April are now influencing retail prices. While prices have been on the rise this year, they remain 3.1% lower compared to the previous year. However, they still stand at an impressive 49% increase compared to pre-COVID levels.

Electric Vehicle Inventory Challenges Continue

The report also sheds light on the ongoing challenges associated with finding electric vehicles (EVs) at dealership lots, despite growing consumer interest. As of the end of May, a significant portion of both used and new car dealerships faced difficulties in stocking EVs. Specifically, 72.9% of used car dealerships and 52% of new car dealerships did not have any EVs available for sale. Moreover, the availability of EV inventory remains highly concentrated, with California accounting for 27.3% of all new EV inventory and 21.7% of all used inventory. Texas follows as the next closest state, with only 7% of the total inventory for new and used EVs. These challenges in inventory distribution need to be addressed to further accelerate EV adoption, particularly considering that 67% of shoppers consider the in-person test drive as very or extremely important in their buying process.

CarGurus' 2023 Intelligence Report reveals intriguing insights into the used car market. While used car prices demonstrated an upward trend in May, there are indications that they may be approaching their peak. Additionally, the report highlights the persistent challenges in accessing electric vehicles, with limited availability and concentration in certain states. Addressing these inventory challenges will play a vital role in promoting wider EV adoption, considering the importance shoppers place on in-person test drives during their buying process.