After a strong start to the year, there has been a gradual decrease in the demand for used cars since the beginning of Q3. This trend, combined with the surge in used inventory due to the strong growth in new car sales throughout 2023, has resulted in six consecutive months of declining prices for used cars. Additionally, new car prices have seen a modest decline in the last quarter, possibly indicating a near-term peak.
In December 2023, the average price of a used vehicle decreased by 2.4% compared to November, reaching $36,863, representing a 1.7% year-over-year increase. New vehicle prices stood at $67,259, reflecting a substantial 14.2% increase compared to the same period last year, though experiencing a slight 0.3% decrease on a month-over-month basis.
Looking ahead to January, with the continued rise in inventory levels and a slight dip in demand, it is anticipated that used car prices will be lower than those of the previous year for the first time in over 3.5 years.
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