Used-vehicle prices surged in April, according to Carfax, though the jump could carry a few upsides for dealers.
The details: The month marked one of the largest monthly increases since Carfax launched its index in 2023, with used-vehicle prices rising 2.8% in April, about an $800 average increase, as all major segments posted gains.
Luxury vehicle prices rose more than $950 month over month.
Hybrids, EVs, and luxury SUVs were each up roughly $1,200 in April.
Pickup prices climbed $800 after remaining flat in March.
SUVs and used cars were up roughly $600 to $625.
Regionally, the South (GA, FL, AL, MS, LA, AR) saw some of the biggest jumps, with used luxury SUVs up more than $1,850 and used pickups up more than $700.
What they’re saying: “Supply and demand are both in play here,” said Patrick Olsen, with Carfax. “We know we’re millions of vehicles short in the used-car market because of big sales declines in 2020-2022, largely due to pandemic-era issues, including hard-to-get credit and supply-chain issues. That means there are more consumers chasing fewer used cars.”
Why it matters: Rising used prices add pressure to affordability challenges in the market, underscoring the need for dealers to be more strategic with used-vehicle inventory to remain competitive.
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Between the lines: Amid the pricing surge, stronger depreciation performance is lifting trade-in values, which could support consumer equity and help fuel the sourcing of used inventory.
Before COVID, a one-year-old vehicle sold for $50,000 would be worth $40,000 after one year and $25,000 after five years.
Today, a $50,000 vehicle is worth an average of $43,750 after one year and $33,000 after five years, per the Carfax report.
Bottom line: Higher used prices may create affordability pressure, but they also could improve margins and trade-in dynamics for dealers. If values hold, the used market may continue offering one of the strongest near-term opportunities for stores.
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