The record rise in U.S. car prices may finally be over, according to two companies that offer autos online.
The prices of used cars declined last month, as per car-buying app CoPilot.
According to a report, used-car prices have increased at an annual rate of more than 50% in some instances during the pandemic.
The prices reached their peak two weeks after the Christmas holidays but have since dropped by about 1.4%, as indicated by CoPilot’s data.
TrueCar, an online marketplace helping car buyers connect with dealers, also reported a decrease in the cost of new cars. They dropped 2% in January, compared to December, but remained 16% higher than last year.
Some caution is required, added the report, as this isn’t the first time that there’s been an apparent peak. Prices for used cars posted monthly declines last summer but then continued to climb upward.
The auto industry is struggling with supply chain issues. However, some automakers believe that those issues are likely to ease. The shortage of semiconductors is not as bad this quarter as the prior one and should begin to decrease during the second quarter of the year, General Motors Co. Chief Executive Officer Mary Barra said on an earnings conference call last week.
The lack of chips slowed back the development of new cars. It’s also affected the market for used cars because buyers who couldn’t afford the most recent model sought an older model instead, which pushed prices up.
CoPilot also reported a decrease in the price of cars at least three years old or less since dealers have increased their inventory. The reduction in this segment is 2.1% from the peak at the beginning of January, whereas four-to-seven-year-old vehicles saw about 1%.
