Used Car Prices Expected to Hit Historic Lows This Summer
The economic shutdown has already caused used car prices to drop 3.5% since March, but bigger drops are yet to come.
The economic shutdown due to COVID-19 this summer has resulted in a turbulent year for used car markets, with average listing prices of 2016-2018 models decreasing by 3.5% since March 1, 2020. However, prices aren’t done dropping yet, and are expected to hit the lowest levels since the 2008 recession by the end of the summer.
CoPilot has analyzed their proprietary database of over 6 million car listings from more than 55,000 dealerships to identify which used cars will have the biggest price drops.
Buying too early could mean paying thousands more for the exact same car. Take advantage of massive price drops this summer by using CoPilot’s used car price tracking tool to be alerted whenever prices drop to their expected low-point.
The Impact of the Economic Shutdown on 2016-2018 Used Car Prices
In a nutshell, used car prices have started to drop, and are expected to decrease much more before the end of the summer. Nationally, listing prices of 2016-2018 used vehicles decreased 3.5% on average since March 1, 2020, but CoPilot is expecting additional drops of 7.7% on average across all 2016-2018 models.
Factors affecting used car prices
A combination of factors are resulting in used car prices falling*:
- Wholesale car prices are down significantly
- Record numbers of off-lease and rental vehicles will hit the market this summer
- New car incentives will have a corresponding impact on the used market
20 Used Cars With the Biggest Upcoming Price Drops
While these cars haven’t dropped in price yet, these are the models we’re expecting to drop the most this summer. The list contains price drops of up to 22% from current retail price, with some luxury models expecting to drop over 15% such as the Infiniti Q70 and Jaguar XJ.
Expected Used Car Price Drops: Nationwide
2016-2018 Models
March 2020 vs. June 2020
Used Car Price Drops by Segment
The amount of supply available before the recession is one of the best predictors of price drops. Family vehicles such as wagons, minivans, and crossovers have all shown fairly substantial drops of 3.5% - 5%, while niches with smaller manufacturer output, like coupes and convertibles, have dropped only 1.5%.
Trucks, however, paint a different picture. As most of the domestic light truck manufacturers in the U.S. remain closed due to COVID-19 lockdowns, demand for new models has shifted to used models, resulting in fairly flat pricing prediction curves. While prices for trucks have dropped by 2.4% since March, further drops are NOT expected due to an imbalance of demand to supply. If you’re looking for a light domestic pickup truck, we recommend waiting until later this year when manufacturing resumes - there are likely to be large new car incentives, so your best chance of getting the best deal on a new or used truck is likely to be later this winter.
Price changes by used car segment
2016-2018 models
March 2020 - June 2020
Brands With the Biggest Price Drops
If you’re brand loyal, these are the manufacturers with the largest price drops across all of their models. Luxury makes like Volvo, Tesla, and Lexus make the list, as well as popular commuter models like Kia, Hyundai, and Hondas.
Brands with the Biggest Price Drops
2016-2018 models
March 2020 - June 2020
With multiple market and economic factors impacting the used car market simultaneously, CoPilot expects this summer to be the best time to buy a used car this decade. Since prices are likely to shift rapidly as the market continues to correct, timing will be much more important than it normally is when car shopping - missing the ‘sweet spot’ by even a single week could end up costing you thousands of dollars on some models. To help you stay up-to-date with the best deals, we built a tool to help track the large price changes we’re expecting this summer. Most importantly, it will alert you whenever used car prices have reached their lowest point so you know you’re getting the best deal possible.
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