Navigating the Evolving Used Car Market in 2022

Introduction

In recent years, the used car market has undergone significant transformations. From the shift to online purchasing and delivery experiences to changes in consumer preferences, the landscape of car shopping has evolved dramatically. To shed light on these changes, a panel discussion was hosted by AAA, Experian, and MotorVero, featuring industry experts who provided valuable insights into the current market dynamics.

2017 Buick Cascada

$18495

Gas

83815 mi

Good Deal  

0 (5)

Rolls-Royce Cullinan AWD

$359180

diesel

12000 mi

Good Deal  

5 (5)

2023 Acura MDX

$48995

Gas

19096 mi

Good Deal  

0 (5)

See More

Current Market Deep Dive

The panelists, including Edward Lyons, Director of Finance for AAA Northeast, and Kirsten Von Busch, Director of Product Marketing at Experian, along with MotorVero's Nick Woolard, Senior Director of OEM Analytics, and Matt Jones, Director of Corporate Communications, delved into the factors driving the current market trends.

--TOP ADVERTISEMENT HERE--

One of the key points discussed was the impact of new car inventory shortages, which have led to a significant increase in vehicle prices. This, in turn, has driven up demand and prices for used vehicles. Nick Woolard highlighted how dealerships that adopted aggressive discounting strategies early in the pandemic were able to attract buyers, while those that took a more conservative approach benefited from the subsequent inventory shortages and increased demand.

2021 Lincoln Aviator

$37520

Gas

52920 mi

Good Deal  

0 (5)

2016 Buick Cascada

$12243

Gas

77700 mi

Good Deal  

1 (5)

2017 Acura ILX

$64900

Gas

4600 mi

Good Deal  

0 (5)

See More

Kirsten Von Busch provided data on the average auto loan amounts, noting that in Q4 of 2021, the average loan was $37,000 with a $600 monthly payment over 70 months. This is a stark contrast to 2014, when the average loan was $18,500 at $350 per month over 60 months. This shift indicates that today's used car shoppers are often individuals who would typically be in the market for new vehicles, reflecting a change in consumer behavior.

--FIRST CONTENT ADVERTISEMENT HERE--

On the leasing front, Ted Lyons pointed out that many drivers are opting to buy out their vehicle leases. Given the significant increase in used car prices, the residual values set at the start of the lease are often much lower than the current market value, making buyouts an attractive option.

Mercedes Benz EQE

$102310

electric

12 mi mi

Very Good Deal  

0 (5)

Tesla Model X 75D AWD

$48000

electric

18036 mi

Good Deal  

0 (5)

2023 Tesla Model Y

$37391

electric

15121 mi

Very Good Deal  

0 (5)

See More

Navigating the Market Now and Moving Forward

With the market conditions remaining uncertain, shoppers are faced with the challenge of navigating higher prices and limited inventory. Matt Jones suggested that leasing could be a viable strategy for those looking to protect themselves from depreciation. Unlike traditional purchases, leasing accounts for depreciation upfront, making monthly payments more predictable and less risky.

--SECOND CONTENT ADVERTISEMENT HERE--

Leasing also offers flexibility; if the vehicle depreciates significantly by the end of the lease, the lessee can simply return the car without the burden of continued payments. Conversely, if the lessee decides to keep the vehicle, they have the option to purchase it at the end of the lease term.

2019 Acura ILX FWD

$21000

Gas

53000 mi

Good Deal  

0 (5)

Audi e-tron 50 Quattro

$119680

electric

10000 mi

Good Deal  

0 (5)

2024 Chrysler Pacifica

$49092

Gas

0 mi

Very Good Deal  

0 (5)

See More

Watch the Full Conversation

For a more in-depth understanding of the used car market in 2022, you can watch the full panel discussion hosted by AAA, Experian, and MotorVero here.

--THIRD CONTENT ADVERTISEMENT HERE--