The average American used car buyer paid $27,256 in May — $457 higher than April’s average price. The increase came even as the supply of used cars for sale improved during the month.
The total supply of unsold used vehicles on dealer lots across the U.S. stood at 2.19 million units at the close of May, according to Cox Automotive. That was up from a revised 2.11 million at the end of April, but down 11%, or 277,000 units, from the same time a year ago.
Cox Automotive is the parent company of Kelley Blue Book.
There may be a short-term price dip ahead, analysts tell us. The wholesale prices dealers pay for the used cars they later sell have fallen nearly 8% in recent months. When wholesale prices fall, retail prices usually follow within six to eight weeks.
But, in the longer term, used car prices will likely stay high for several years. Automakers built about 8.1 million fewer cars during the height of the COVID-19 pandemic, resulting in fewer cars available to enter the used car market.
Related: Why the Used Car Market is So Bad, and Won’t Get Better Soon
Consumers also changed their leasing behavior, with millions buying their leased cars rather than returning them to dealers and starting a new lease. That has choked off another common supply of used cars.
Some dealerships have more used cars for sale than others. Among the non-luxury used vehicles with the lowest inventory were Honda, Subaru, Toyota, and Mazda. Luxury used vehicles with the lowest were Acura, Infiniti, and Lexus.
Dealers face a shortage of the higher-mileage, older cars they sell for under $10,000. They reported just 31 days’ supply of those at the end of May. At the other end of the scale, they averaged a 58-day supply of more recent used cars priced over $35,000. See used cars for sale
