KTRH Local Houston and Texas News

KTRH Local Houston and Texas News

KTRH-AM covering local news from Houston and across Texas.

 

Used Car Prices Dropping

When Covid closed global manufacturing plants, electronic chips were worth more than the sum of their parts, and ships sat ashore waiting for a harbor to dock at, prices for used cars went crazy. Some fools were paying more for used cars than the sticker price when it sat on the lock.

The cost of a used car has dropped 14% in the past year, the trend continuing in a downward motion. According to the Kelly Blue Book the average price for a new car in 2023 is $48,094, and on a 7 year note at around 10% that means you’ll have a monthly payment just under $900. At least that comes with a warranty but that’s a lot of money before you add insurance, gas, tires, tolls, and other daily expenses of driving.

A used car is a crap shoot. Someone got rid of their car and you may have bought their problem or benefited and bought good fortune. Time will tell. What you gained in patina you may pay in pain and repair costs but you aren’t going to have the massive costs of a new car.

Ivan Drury is Director of Insights for Edmunds, a website that sells new and used cars, offers appraisals and reviews of makes and models, opening the discussion with the Fed raising interest rates and what that’s doing to used car prices. It’s not directly affecting the prices, he points out, but most people finance a major purchase over time and the escalation of those rates has direct bearing on what you’ll ultimately sink into the cost of the car.

To be clever about buying a used car, Drury suggests a trip to the dealership to see if they are offering any “used cars” with very low milage they can attach interest incentives to. A vehicle they used for test drives. It’s odometer establishes it’s not exactly new, but the low milage without a previous owner and clean accident report at a very low interest rate means you could have found the best deal you’re going to find.

In December Edmunds pegs the average used car price at $29,533. There are a lot of variables, but for context is down almost $1,600 from the record $31,095 of April 2022.

photo: Getty Images


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