Car shoppers have been seeing some pretty good news lately. But the aftereffects of a few rough years are still being felt somewhere. Used car listing prices rose last month.
The average price advertised for a used car in December was $26,446 — about $200 more than a month earlier, according to the Cox Automotive analysis of vAuto Available Inventory data. The price was still 3% lower than one year before. Cox Automotive is the parent company of Kelley Blue Book.
New car prices also rose last month, but only by 0.3%. Kelley Blue Book analysts expect 2024 to be a relatively normal year for most car shoppers, with price growth slowing as automakers are forced to discount cars to clear growing inventory.
Supply Rising
The nationwide supply of used cars was restricted all year but recovered slightly at the end. The total supply of unsold used vehicles on dealer lots across the U.S. stood at 2.39 million units at the end of December. That is up 4% compared to year-ago results and the highest level since the fourth quarter of 2022.
At the end of December, total days’ supply remained steady at 56 — just under the traditional target of 60 days.
“After bottoming out at a low historical level in the first quarter of 2023, the supply of used units generally rose throughout most of 2023, ending at roughly the year’s highest levels in both volume and days of supply,” said Jeremy Robb, senior director of Cox Automotive Economic and Industry Insights.
Used car supply could remain slightly restricted for years to come. Automakers built about 8.1 million fewer cars than expected during the COVID-19 pandemic. Those unbuilt cars will never reach the used market, constraining supply for years.
“Looking ahead, the retail used-vehicle market should continue to feel the pinch of lower new-vehicle sales in 2021 and 2022, keeping supply constrained,” Robb says.
