Used Car Market Analysis: June/July 2023
In this post, I analyze the recent turmoil and challenges posed by falling car prices, which are creating a complex and challenging environment for used and pre-owned vehicle dealers. Read on for strategic insights into this ever-changing market.
The End of the Bubble
The automotive bubble has withered, creating opportunities for used and pre-owned car dealers. For example, an analysis of the Compass Longitude price chart suggests that those who resold this model in April last year (2022) could have made a profit of R$115,000. Today, the same vehicle could be worth R$105,000, a decrease of R$10,000 in just one year. With the introduction of popular cars, this downward trend in used and used car prices is intensifying.
Used Car Price Trends in Recent Years
Car depreciation has been steep in recent years. This article offers important insights to help used and semi used car dealers assess the market situation and adjust their business strategies accordingly.
Pandemic and Input Shortages: Their Impact on Used Car Resale.
The automotive market has undergone major changes in recent years, with car prices rising sharply. In 2020, the pandemic resulted in shortages of electronic components and other essential inputs for vehicle production, limiting the amount of new cars available and creating high demand in the used and pre-owned car market.
High Prices: The Effect of New Car Shortages on Used Car Resale
With the reduced production of new cars, demand outstripped supply, inflating prices. In this scenario, even those who had money available faced difficulties in purchasing a new vehicle, causing the used and used car market to appreciate.
Falling Prices: The Effect of the Increased Supply of New Cars for Used Car Dealers.
But car price charts show a surprising trend from January 2023 onwards: prices began to fall. As demand for new cars slowed, sales fell to below pre-pandemic levels, and many automakers shut down their operations as inventories rose.
The Impact of the Popular Car Program for Used and Semi-New Car Dealers
The popular car program also has a significant influence on the demand for used cars. Many consumers decided to wait to see if they could get a better deal, which affected the sale of used and used-to-own cars.
Buy or Sell Used Cars?
With falling vehicle prices, used and used car dealers are asking themselves: is it the right time to buy or sell a car? For those thinking of expanding inventory, prices are falling and the scenario indicates further devaluation. Therefore, the decision to buy more vehicles for resale should be based on a careful analysis of the financial situation of the business.
On the other hand, for those thinking of selling, now might be the time, given the continuing downward trend in car prices. It is crucial to be aware that prices may continue to fall, so it is a decision that needs to be well thought out. But keeping the vehicle in stock without correctly adjusting the price could mean a lot more damage ahead.
In summary, buying or selling vehicles should be a calculated decision that takes into account the current financial situation of your used and used car dealership business and the demands of the market.
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