Car Shoppers Can Look Forward to Cooling Used Car Prices This Labor Day Weekend, According to Edmunds

Experts say seasonality has returned to the used car market after being on hiatus and reveal which 3-year-old vehicles saw the largest price reductions in July compared to their peak value in 2022 

SANTA MONICA, Calif., Aug. 30, 2022 /PRNewswire/ -- Consumers who have been delaying purchasing a vehicle in 2022 could start to find some relief in the used car market this Labor Day weekend. According to the car shopping experts at Edmunds:

• Across more than 200 3-year-old vehicle models¹, Edmunds data shows that 92.8% experienced a price drop in July compared to their peak ATP in 2022.
• The average transaction price (ATP) for 3-year-old vehicles was $31,302 in July, a 4.6% decrease, or $1,526, compared to their peak ATP of $32,828 in January.
• Edmunds analysts note that the biggest contributor to this trend is traditional seasonality returning to the used car market after a long period of unprecedented disruptions to the automotive industry: From 2015 to 2019, the ATP for 2012 to 2016 model year (MY) vehicles consistently showed seasonal declines between January and July of 4.8%. But in 2020, the ATP for 2017 MY vehicles increased by 0.4%, and in 2021, the ATP for 2018 MY vehicles increased by 13.1%.
• Edmunds experts say that 2022 reflects declines more similar to pre-pandemic levels: As more of the calendar year passes by, used vehicles are getting older and gaining in mileage — and therefore commanding less than they did earlier in the year. Additionally, an uptick in the volume of near-new used vehicles (2 years old or newer) making their way to the used market as trade-ins also places downward pressure on prices of 3-year-old vehicles.

"Car shoppers can't expect to find anything close to the doorbuster bargains of pre-pandemic Labor Day sales, but they can at least look forward to used car prices softening across the board heading into the holiday weekend," said Jessica Caldwell, Edmunds' executive director of insights. "Although these price drops are not earth-shattering, they should be a welcome reprieve for consumers compared to the continued higher cost of new car purchases or leases."

To help consumers identify which vehicles are experiencing the biggest price decreases ahead of the holiday weekend, Edmunds analysts took a look at ATPs for 3-year-old vehicles in July and compared those to their respective peak monthly ATPs in 2022 (for both mainstream vehicles and luxury vehicles). Both lists can be found below.

"It's encouraging to see price peaks now showing up in the rearview mirror for the first time in a while, but possibly the most positive development for consumers is a reduction in pressure to buy immediately," said Ivan Drury, Edmunds' senior manager of insights.

"Until a few months ago, those unwilling to commit to a purchase in the moment were often beaten to the punch by the next shopper and left with even higher prices in the weeks and months that followed. Knowing that prices are trending down from all-time highs, consumers can breathe a small sigh of relief since they'll have more time to conduct research and visit a few dealerships before a purchase. But those hoping to take advantage of their trade-in should act quickly because those values are also starting to decline from record highs."

Shoppers can start searching for available used vehicle inventory on Edmunds here and determine their trade-in value on Edmunds here.

About Edmunds

Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California. Follow us on Twitter, Facebook and Instagram.

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¹ 3-year-old vehicles are defined as 2019 model year vehicles in this release

SOURCE Edmunds