Edmunds reposted this
Q2 used car data is in the books, with somewhat predictable results, but also heavy implications for the market going forward, or at least some subsets of the market. New data from Edmunds reveals that the overall used vehicle market has been performing in a more predictable fashion lately thanks to shifts in new-car market trends. As inventory has steadily recovered in the new-vehicle sector over the past year, discounts and incentives on aging new car inventory are now beginning to be reflected in the used market. With new-car prices trending downward, values of newer used vehicles have correspondingly declined: Used vehicle values fell by 6.8% year-over-year from $29,742 in Q2 2023 to $27,472 in Q2 2024. But even as the overall market normalizes, there’s one subset of the market that is wreaking havoc on owners seeking to trade in their vehicles as well as dealers aiming to forecast an accurate selling price. Spoiler alert: we’re talking about secondhand EVs. Here’s a quick rundown of what’s going on 👇 💲 Automakers have been utilizing virtually every incentive under the sun to move stale new-EV inventory. Whether via cash incentives, MSRP reductions or heavily subsidized leases that also allow the use of the Inflation Reduction Act tax credit, the trickle-down effect on the used vehicle market has been pronounced. 📉 Used EV values have undergone a major course correction, falling 20.5% year over year from Q2 of 2023 and 38.5% from Q2 2022. 🎇 This downward trend in EV values marks an abrupt turn in the trajectory of the used EV market, which had a runup in prices with the introduction of competitive products. We seem to have reached a point where used EVs values are succumbing to more mainstream market forces. ❗ This trend has some heavy implications for EV owners: In a recent Edmunds analysis of negative equity trends in the automotive industry, the data showed that EV owners with negative equity owe more money on their loans than owners of internal combustion engine (ICE) vehicles. The not-so-great news: Even though automakers are reducing production and coming to terms with EVs commanding less of a price premium than previously thought, the debut of new, lower-priced EVs over the next few years will unfortunately only exacerbate the EV value conundrum since these cheaper market entrants will compete with similarly priced used EVs. The good news: Consumers who are prepared for all the lifestyle considerations that come with an EV could get a killer bargain on used electric transportation. For more details, check out the Q2 2024 Used Vehicle Report here: https://edmu.in/46NNta7 #EdmundsInsights