America’s used car dealers had about 2.3 million vehicles to sell at the end of October. That’s just 8% shy of the inventory they held one year ago, before the supply crunch began that has slowed sales all year.
That didn’t do much to bring prices down, though. The average used car list price was a record $26,971 in October, according to Cox Automotive. That’s 25% higher than one year before and 38% above 2019, pre-pandemic levels.
Cox Automotive is the parent company of Kelley Blue Book.
Prices Climbing Due to Several Factors
Used car prices have been climbing throughout 2021 due to a blend of causes.
As Americans get vaccinated against COVID-19 and resume travel and shopping habits, many are nervous about public transportation and looking to used cars.
Meanwhile, a worldwide microchip shortage has pushed new car prices to record highs. The average new car sold for more than $46,000 in October — an increase of more than $5,000 in just one year. That has sent some potential new car buyers to used car lots instead.
Finally, car dealers face shortages of the most affordable used cars. Americans bought fewer cars for several years after the 2008 recession. That leaves fewer older, higher-mileage cars for the used market today.
Car dealers measure their supply in a metric they call days of inventory – how long it would take them to sell out of cars at today’s sales rate if they didn’t acquire any more to sell. In October, dealers reported just 32 days’ supply of cars priced under $10,000. They had about 38 days’ supply of cars in the $10,000-$25,000 range and as many as 48 days’ supply of cars priced above $25,000.
Sales Nearly Back to Last Year’s Pace
Despite higher prices, Americans are still going used car shopping. We bought 1.65 million used cars during the 30 days ending October 25. That brings sales near to 2020’s pace – just 7% more were sold last October.
