- America’s car dealers ended March with just a 37-day supply of used cars for sale, a low number after three straight months of inventory declines.
- Low inventory traditionally means higher prices, but a key indicator of near-future pricing actually dropped in early April.
America’s car dealers ended March with just a 37-day supply of used cars on the lot. That’s a relatively low figure, coming after three straight months of declines.
The numbers come from Kelley Blue Book parent company Cox Automotive, which also provides much of the software that powers dealership operations and operates the country’s largest used car auction service. That gives it deep insight into the market and what car shoppers should expect.
Used-car sales always accelerate in spring, as many Americans use their tax refunds to solve transportation problems. Americans typically buy more used cars in March than in any other month.
Related: Is Now the Time to Buy, Sell, or Trade-In a Used Car?
This year has been no exception. But strong March sales met a slow wave of shortages moving through the used-car market. America’s automakers built about 8.1 million fewer cars than planned at the height of the COVID-19 pandemic, thanks to factory shutdowns and supply chain problems. That means a slight shortage of 3- to 5-year-old used models.
Nationwide, dealers ended March with just 1.95 million used models in inventory – the fewest since 2019.
Prices May Not Soar
- Used car prices rose slightly in March.
- But they might actually dip soon – the wholesale prices dealers pay to restock have dropped in recent weeks.
The average used car buyer paid $25,390 in March, up slightly from February.
But there are some indications that prices could drop soon despite restricted supply.
Dealers restock their used-car lots from two sources: cars Americans trade in when buying a new car, and used-car auctions. Cox Automotive also owns Manheim, the largest used car auction service.
Its Manheim Used Vehicle Value Index tracks those prices. We typically see retail prices follow the same pattern as the index, with a 6-to-8-week lag.
The index fell 1.1% in the first two weeks of April, suggesting that a small drop in used car prices should come in late spring.
