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The Used Car Market Is Still Healing
The Used Car Market Is Still Healing-October 2024
2024-02-19 EST 22:09:32

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The used car market pretty much ever since the pandemic started, but according to one new study we’re pretty much back to normal.

The study, , is ostensibly about the “best” states to be in the car market, as measured by market days. Market days, in this context, mean how many days it would take for the used car supply to be depleted at current levels of demand.

The higher the number, the higher the used car inventory. It’s apparently good to be a used car buyer right now if you live in Alaska:

Image for article titled The Used Car Market Is Still Healing

More interesting to me, however, is the graph below, which shows how market days have changed in the U.S. since the pandemic started. I’m not quite sure where CoPilot gets the number 40 as the “healthy market” number of market days, but the trend is quite clear, and follows the behavior you would expect.

Image for article titled The Used Car Market Is Still Healing

In the beginning of the pandemic, the market day number jumped as people clung to their money out of economic uncertainty. In the middle of the pandemic people started buying used cars again — and quite a lot of them — because they were cheaper than new cars. And new car inventories had also been depleted.

By the end of this graph, where we are now, used car inventories are actually up slightly compared with where we were in February, before all the shit started. That’s surely in part because new car inventory has been rebounding. CoPilot also offers the following reason:

Despite increased car prices, the supply of used cars is also higher than it was a year ago by the measure of market days supply, or the number of days it would take to run out of dealer inventory at the current level of demand. One reason for this is that when the pandemic first hit, manufacturers delayed lease returns by incentivizing extensions. Those gently used, highly optioned, low-mileage cars are now coming back into the market, helping to fill up dealer lots. Under normal conditions, this influx of near-new supply would lead to lower prices for consumers, but the reduced availability of new vehicles has more consumers open to the idea of a used car. With more buyers in the market, prices for used vehicles have remained high.

I will show you one more graph, this one illustratingthat it’s a bad time to be in the market for used trucks and vans specifically:

Image for article titled The Used Car Market Is Still Healing

CoPilot says that it used data from a “proprietary dataset of more than 1.3 million used car listings” in the U.S., and I have no reason to think that it’s skewed in anyway, or that CoPilot has a reason to do so. Which is just to say, take all of this data with a grain of salt. And individual purchases, of course, will vary pretty widely no matter where you’re buying a car.

That said, CoPilot went to the effort of ranking metropolitan areas of at least a million people in terms of market days. You can see the results of that if you’re so inclined. Rochester and Buffalo, New York, are first and second, for whatever reason.

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