Have you checked your Carvana offers lately? You may be in for a welcome surprise. Used car prices are trending upward in early 2023, and if you’re thinking about selling your car, now might be the time! After seven months of steady price declines, January saw a return to higher appreciation.
To test this hypothesis, we crowdsourced data from CarEdge community members like yourself to figure out just how much cash offers from Carvana, CarMax, Vroom, and others have increased.
What’s driving used car price trends, and how are wholesale markets translating to trade-in values and Carvana offers? When is the best time to sell a used car? We’ll dive into that and more.
Used Car Price Trends: It’s a Seller’s Market
According to the latest data from Cox Automotive, wholesale used car prices increased month-over-month in January. From December 2022 to January 2023, seasonally-adjusted used car prices at wholesale auctions rose 2.5%, but remained 12.8% lower than one year before. Only part of January’s rising car prices can be attributed to typical seasonal trends. According to Cox Automotive’s Manheim Used Vehicle Value Index, the non-adjusted used car prices were up 1.5% in January, showing that factors other than seasonality are at play here.
Black Book data shows a similar trend across the broader market. For the first time in nearly 8 months, used car prices increased at wholesale auctions.
“The overall market moved back into positive territory last week for the first time since the middle of June of last year. The newer, 0-to-2-year-old units experienced even larger increases than the 2-to-8-year-old units that are typically featured in our report. The overall market for the younger units increased +0.12%, compared with the 2-to-8-year olds that increased +0.03%. Older model years, 8-to-16-year-old units, increased only slightly less than the newest model years, with an uptick of +0.10%.” – Black Book Market Insights – 2/14/2023
Used car depreciation is slowing down, although the extent varies from one vehicle segment to another.
Why are car prices rising again?
Seasonal factors are increasing demand as we get closer to spring buying season, but CarEdge’s Ray Shefska thinks there’s more to the story here. “There’s a shortage of the preferred used cars: 2-6 year old cars with lower mileage. Dealers are still willing to fork over more cash at auctions for the used cars that sell quicker. They anticipate a coming shortage of inventory in the warmer months, and are willing to pay more to get cars on their lots today.”
Fears of a recession are subsiding somewhat, and that’s contributing to dealers raising their expectations for the health of the used car market this spring and summer.
Carvana offers are rising fast
Typically, car market trends at the wholesale level take months to translate to retail prices. That’s not the case this time around. Here are some before and after comparisons of Carvana offers received by CarEdge Community in recent weeks.
We were shocked to find that Carvana’s offer for this 2014 Toyota Camry had increased by $2,117 in just four weeks.
Carvana’s offer for this 2017 Kia K900 increased by $1,837 in about one month.
This 2017 Toyota Avalon gained $383, or about $125 per week over the past month.
Ready for a real shocker? This 2015 Chevrolet Corvette gained $1,256 in just seven days.
This is especially noteworthy since sporty and luxury cars have depreciated faster than any other vehicle segment in recent months. Now, they’re quickly gaining value. Thank you to our CarEdge Community for sharing these offers with us.
Even if you checked your offers from online car buyers just days ago, we recommend seeing your updated offers with CarEdge. Your car has likely gained value in the past week. Compare multiple quotes without annoying phone calls.
Sell your car soon
Your car is worth more than it will be in a few months. It’s tax season, and car buyers are about to have a chunk of cash in hand. The increased demand isn’t ubiquitous, at least not yet. Newer, mainstream brands are appreciating more than luxury cars right now.
Ford CEO Jim Farley told investors that Ford expects overall transaction prices to fall by about five percent. “You think about that as a combination of incentives and lower dealer margins. We’re starting to see dealer margins come down now as demand from the industry is easing a bit,” said Farley.
Interest rates remain high, and may climb further. Will the Federal Reserve continue to raise the cost of borrowing money at the next meetings in March and May? Most analysts expect at least one more 25 basis point hike in the near future. With that said, the cost of financing is likely to become an even greater burden to car shoppers in the months ahead, and that could soften the market yet again.
If you’re considering selling or trading-in your vehicle, you’re likely to get the best deal in February and March.
Compare offers without selling your data
The used car market has changed a lot in recent weeks. Even if you’ve recently received online offers from Carvana, Vroom, or others, you’ll want to see your car’s updated offer. It’s likely that your car’s value has risen.
Sadly, most popular online car buyers and quote tools make money by selling your information to third parties. CarEdge will never sell your data. Get the best offer when you sell your car, WITHOUT giving your data away. Compare quotes from CarMax, CarGurus, EchoPark and others with CarEdge, and get your offers in minutes.
Has your car’s value gone up in recent weeks? Let us know in the comments below, or join the internet’s fastest-growing automotive forum, the CarEdge Community.
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