WRIGHTSVILLE, Pa. — According to JP Morgan Research, lower used and new car prices in 2023 are due to 2022 prices hitting their peak.
While many remain optimistic, local car dealerships say the market has budged—but not enough for a clear change.
Global supply chain issues, chip shortages and more have been hammering the car industry for the past three years, and those problems will continue to persist.
However, according to JP Morgan, in the U.S., the Manheim Used Vehicle Value Index, which measures the prices dealerships pay for used cars at auctions, hit a high of 236.3 in January 2022 and has since fallen to 204.5 in September 2022.
While many are optimistic about a decline in prices to come, Kamal Narouz, co-owner of Car Logic of Wrightsville, said the prices haven’t budged.
“We have seen a slight correction in the market, but demand is still strong and has not been—the prices have not gone down by 10%, I would say a little bit but not anything to mention,” said Narouz.
Research reveals that lower prices won’t translate when it comes to supply and demand. Interest rates, along with other rising costs, are up and haven’t shown any sign of decreasing due to the Federal Reserve's raising interest in 2022.
Narouz tells FOX43 the demand for cars hasn’t slowed; the only increase is people financing.
“As prices increase, your average customer that would normally come in and buy a car in cash is now financing a portion of it because prices have gone up, but the demand itself has not gone down and people still need used cars,” said Narouz.
If you are planning to buy a used car, keep in mind these few things:
Think before you buy: Thinking about the car that best fits your lifestyle for commuting and traveling is best. Gas mileage and the distances currently on your odometer are important to pay attention to.
Buy domestic: Domestic brands tend to have slightly more inventory than others.
Check car history: Dealerships and garages should provide a history of the car before purchase. Checking the history allows buyers to know exactly what they’re signing up for and what could be a problem in the future.