FOX Business' Jeff Flock reports on the latest news coming out of the auto industry as data shows insurance prices are rising year-over-year.
The gap between the new and used car markets is wider than ever, according to new data from Edmunds.
car shopping guide latest analysis Data released this week shows that the average price difference between new and used cars exceeded $20,000 for the first time in history, with the average selling price of a new car in the third quarter at $47,542, compared to the average price of a used car. is $27,177.
While new car prices continue to rise, the value of used cars has fallen, resulting in the largest difference ever between the average price of a new car and the average price of a used car. (Bridget Bennett/Bloomberg via Getty Images/Getty Images)
Edmunds said used car prices fell 6.2% year over year last quarter, but given that the average price of a used car is still up 31.4% from the third quarter of 2019, this decline is due to consumer spending. He said that it is not very safe for people.
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Ivan Drury, director of insights at Edmunds and author of the study, told FOX Business: “While the value of used cars has declined at a steady pace, there has been a decline in the value of used cars from shoppers who had intended to buy a new car but are now able to do so. “We are far from seeing a sharp decline because demand is increasing.” The supply of used cars is limited because people can't afford to buy them, and at the same time fewer trade-ins are being sold for new cars, so rental agencies aren't selling as many used cars that are nearly new, and off-lease vehicles are being sold. Supply is also low. It's a market. ”
Used car prices fell last quarter, but are still up more than 30% from 2019. (Scott Olson/Getty Images/Getty Images)
He explained that in the used market, the biggest declines in value were concentrated in the latest used cars. Because the near-new used car's biggest competition is a brand new version on the other side of the lot. New car incentives are starting to increase, creating a trickle-down effect on used car prices.
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Dealers are also seeing an increase in used car sales. Data shows that used cars sit for an average of 36 days before being sold.
As prices continue to rise, new cars are sitting at dealerships longer than they have in the past three years. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
Meanwhile, new car delivery times are on average 57 days, the longest in more than three years. That means average discounts on new cars, which rose to $1,744 last quarter, could continue to rise as automakers look to move inventory faster.
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Drury said the increase in lot periods coincides with lower sales of 2024 models and a boost in holiday sales.
“This will lead to increased incentives, but it will be up to the automaker to decide whether that incentive is cash on the hood, special financing or a subsidized lease,” Drury explained. . “Each approach appeals to different consumers, but the overall theme is that savings are just around the corner.”
