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In the market for used cars, there’s some good news: Vehicle prices have been falling this year. That doesn’t mean you’re guaranteed a deal, but there are more ways to save now than when consumers paid top dollar for new and used cars during the pandemic.
As of January, used vehicle prices are down 11.6 percent from a year earlier, according to the U.S. Bureau of Labor Statistics consumer price index. Month over month they are 1.9 percent lower. The start of the new year typically brings a dip in prices as new car dealers unload excess inventory. That spills over into the used car market. Vehicle production is also picking up after months of supply shortages, alleviating some of the demand pressures.
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“Prices are better in the past year, but they aren’t as low as they were pre-pandemic. We’re still well above that level,” says Karl Brauer, executive analyst at iSeeCars.com. “The multibillion-dollar question is, Are we getting back to normal or is this the new normal?”
Even if enough new cars become available, it will take a while to meet the pent-up demand, which means finding deals still requires some effort. There are also rising interest rates to consider, which can gobble up any savings.
In this environment, you won’t save thousands of dollars on a used car, but there are ways to shave a little off the sticker price or to get more bang for your buck.
1. Use your leverage. There’s still a shortage of used cars, leaving dealers staring at emptier lots. That makes them eager for trade-ins and places buyers with a vehicle to swap in the driver’s seat. “Used car inventory is down by millions of units,” says Joseph Yoon, Edmunds’ consumer insights analyst. “If you have a car to trade, leverage that as much as possible.” Yoon says to get multiple offers from car dealers to maximize the trade-in value you get.