Used cars sit on the sales lot at Autometrics Quality Used Cars in El Cerrito, California. (Photo by Justin Sullivan/Getty Images)
UPDATED 9:50 AM PT – Sunday, August 22, 2021
Used car prices have begun to level off after a months-long surge. In a recent report, industry experts said they expected prices to drop and inventory to increase heading into the third quarter of 2021.
According to Edmunds, the average used car price reached $25,000 for the first time ever in June. Prices have been up nearly 30 percent from June 2020 when the average price of a used car was $19,500.
The spike in prices has reportedly been driven by a shortage of microchips. However, Sonic Automotive President Jeff Dyke said there have been signs the market was leveling off.
“In my 25-year career, we’ve never seen this before, where you have an inversion like this where wholesale prices are really higher than retail prices, but all of that is coming to an end,” he explained. “…Inventories are repopulating. Prices will come down and they’ll settle as I said.”
Dyke went on to say used car prices have dropped by as much as $2,000 in July as the supply of new cars has started to increase.