Used car prices drop, still expensive in many states

The pandemic economy has turned everything upside down, including skyrocketing used car prices. But if you’re in the market for a used car, there could be (temporarily) good news: a new report shows used car prices have fallen steadily over the past four months. This is a welcome respite from escalating costs, driven by inflation and supply and demand.

But while things are moving in the right direction when it comes to costs, not all states are seeing the same price drops. In some states, buying a used car is more expensive than in others. Here’s what you need to know.

According Money.com, the price of a used car is finally falling, “but that doesn’t necessarily mean it’s a good time to buy”. Citing data from research firm Edmunds, the publication says the average price of a used car has fallen below $29,300 after a few months of falling prices. However, while the price is down from the all-time high average of $29,969 in December 2021, it is not down much.

“We’re still a long way from what anyone who has bought a used car in the past will be able to identify with,” Edmunds chief information officer Ivan Drury says per Money.com.

Another big part of the affordability puzzle is rising interest rates on auto loans. As Money.com explains, auto loan interest rates hit 8.8% in July, representing a typical monthly payment of about $564. In July of last year, when interest rates were a little lower at 7.5%, the average monthly payment was $502.

The publication explains this, noting that in December 2021, when used vehicle prices were at an all-time high, people were still paying less than they are paying now. “The typical monthly payment was actually $23 cheaper than it is now,” Money.com said, thanks to interest rates.

However, it is also important to note that not all states experience the rising cost of a used car in the same way. According iSeeCars.com’s latest analysis of more than 1.8 million used car sales in July, used vehicle prices are up nearly 11% from a year ago, but that’s on average – and the range is from less than 1% increase over last year to nearly 17% in other states.

States where used car prices have jumped the most over the past year:

  • South Carolina with a year-over-year change of 16.8% or $5,277
  • New York with a year-over-year change of 15.8% or $4,595
  • Island of New Jersey with a year-over-year change of 15.2% or $4,486
  • Connecticut with a year-over-year change of 14.3% or $4,138
  • Massachusetts with a year-over-year change of 14.1% or $4,176

States where used car prices jumped the least over the past year:

  • Oklahoma with a year-over-year change of 0.8% or $278
  • Alaska with a year-over-year change of 1.3% or $542
  • Rhode Island with a year-over-year change of 3.4% or $1,038
  • Hawaii with a year-over-year change of 5% or $1,562
  • Mississippi with a year-over-year change of 5.1% or $1,663

To see full used car price details in each state, including which vehicle is the most expensive in your state, check out iSeeCars.com.

About Melanie Tweed

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