Used car prices have been through the roof lately. The good news is that thankfully, prices are starting to come down, and Michigan residents can expect to pay less for used cards in 2023. I’m lucky, in that I purchased my pre-owned car in December of 2019, right before the pandemic and chip shortage, so I got a fantastic deal compared to what my car would have cost just a year or two later.
A new report from Joseph Gunther IV at Gunther VW Fort Lauderdale states that “as the demand stabilizes and the inventory improves, prices are expected to ease.” Also, “consumers can expect to see a reduction of up to 10% in used car prices.”
The current average price for used cars in Michigan is $33,597. According to Mr. Gunther, this price will drop to around $30,237 later this year. That will result in Michigan buyers saving up to $3,360. Mr. Gunther also states that the supply of vehicles on lots is expected to increase, dropping prices.
New car prices are still really high, though. The average transaction price is currently $48,861. That’s high. But, it marks first time since July 2021 that the average paid price fell below the average manufacturer’s suggested retail price (MSRP).
The high cost of new cards is because of the high cost of raw materials and the shortage of computer chips. With new car prices being so high, consumers have flocked to used vehicles. How much prices drop will depend on factors such as the war in Ukraine, which has exacerbated supply chain interruptions, and the chip shortage, according to Mr. Gunther. Find the full study here.
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