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Used Car Prices in 2024 Here’s What the Experts Say

As a car dealer, the main concern you may be facing right now is the unpredictability of used car prices in 2024. One minute they could be higher than ever, and the next they could be crashing down, leaving you with a huge profit gap.

We all know how frustrating it can be to buy a car for a certain price, only to find out that it is not worth as much as you thought it would be.

So, are used car prices going to drop in 2024?

I have gathered some expert predictions to give you a clear insight into what lies ahead.

Normalcy is Welcome

used car prices 2024

As we enter 2024, the used car market is expected to experience a gradual return to normalcy, as indicated by the latest market insights from Cox. This anticipated stability can be attributed to a convergence of several factors.

Firstly, the expected surge in new car sales will ensure a consistent influx of used cars into the market, as people trade in their older models for newer ones. Secondly, the increasing lifespan of vehicles, thanks to technological advancements, means that owners are holding onto their cars for longer periods, thereby resulting in a denser used car market.

Furthermore, the burgeoning popularity of electric vehicles, led by industry giants like Tesla, could potentially devalue internal combustion vehicles, thereby reducing overall used car prices.

However, this trend will likely be a dealer’s biggest win fall. There will be more used EVs in the market, meaning consumers will be more willing to switch to these eco-friendly alternatives. This opens up a new revenue stream for dealers, as they can tap into the refurbished electric car market and cater to this new demand.

I was an early adopter of the used EV market in 2019 allowing us to make huge profits in 2020.  Following the outbreak of COVID-19 in early 2020, the market value of electric vehicles soared to unprecedented levels. Recognizing this, I decided to reduce my holdings in the used Tesla market.

I recommend gradually transitioning into the electric vehicle (EV) segment of the pre-owned car market. This strategic approach allows for a smoother integration while capitalizing on the growing demand for EVs.

You can never go wrong with diversifying your inventory, and the growing demand for used EVs presents a unique opportunity for dealers to do just that.

The Era of the Sellers Market has Come to an End

With the market dynamics shifting, 2024 marks the end of what was once a seller’s market in the automotive industry. The rise of electric vehicles has prompted a significant change in the landscape.

As more affordable EVs enter the market, the demand for gas-powered vehicles is expected to decline. In turn, this will lead to a decrease in used car prices as well.

However, it’s not just electric vehicles that are causing this shift. The rise of ride-sharing services like Uber and Lyft has also affected the demand for used cars, especially among younger generations who are opting for these convenient and cost-effective alternatives.

As the seller market ends, dealers must pivot their strategies and focus intently on customer service. In this new buyer-centric market, building relationships, understanding customer needs, and providing value beyond the sale become more important than ever.

Dealers who adapt quickly, embracing this shift toward superior customer service, will see continued success in the used car market. Those who resist and cling to outdated sales tactics may find themselves struggling to survive.

Tesla Is Still the King of EVs

used car prices 2024

Another factor that could lead to a decrease in used car prices is the rise of electric cars.

With governments across the world making efforts to reduce carbon emissions, electric cars are becoming more popular by the day. As more people switch to electric cars, the resale value of internal combustion vehicles could drop, bringing down used car prices overall.

Traditional automakers have poured more than half a trillion dollars into electrifying their lineups, as indicated by the data from Caredge. Regrettably, a significant portion of these investments are focused on the luxury segment.

Tesla, on the other hand, has been producing affordable electric vehicles since its inception, making it a leader in the EV market and driving down used car prices for traditional gas-powered vehicles.

Tesla’s market share will decrease as it chases volume and faces increased competition from established automakers, but its impact on the used car market is set to remain strong. As more and more consumers opt for electric cars, it will become increasingly challenging for dealers to sell traditional gas-powered vehicles, further driving down prices.

Conclusion:

While it’s impossible to predict the future with certainty, expert predictions show that used car prices may reduce as time goes on.

While there may not be a significant drop, market normalization will lead to a stabilization in prices. Additionally, the new car market will also play a vital role in affecting used car prices in the coming years.

To ensure your dealership’s continued success in the evolving market, it is advisable to adapt your strategy and capitalize on the potential growth in the used EV market, projected to increase by an impressive 25%. Embracing this opportunity will help you remain profitable in the used car industry. By staying well-informed and flexible, you can maximize your advantages and achieve a competitive edge.

As my tagline suggests, staying ahead of the curve is crucial. Falling behind is simply not an option.

Craig

I'm a business strategist specializing in pre-owned cars, with a passion for music, food, and wine. Remember, staying ahead of the curve is crucial for success!

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