Coronavirus just lopped 10% off the value of your car
Dealers report a gap between wholesale values and retail prices, which may dip through June, due to the COVID-19 pandemic.
If there's any good news, used cars should be a lot cheaper in the months to come.
New car sales took a nosedive in Q1 of this year as the coronavirus pandemic took shape, though there's a glimmer of hope the losses may be softer than previously anticipated in April. But what about used cars?
Automotive News reported Monday dealers find themselves in an odd situation where retail prices are off by just 1%, while wholesale values are down between 10% and 12%. Yes, the novel coronavirus, which causes COVID-19, likely sucked at least 10% of your car's value away, according to data from Cox Automotive.
The discrepancy between prices and values has dealers in a quandary as many fear taking on too many used cars that won't sell for prepandemic prices. However, Cox Automotive said it may also be a time for dealers to mark prices down, sell current used car inventories and take on fresh inventories at lower values.
Although used car prices are pretty stable at the moment, data from JD Power forecasts prices to drop 7% through June before a slow recovery. The dip in prices better matches additional data surrounding values currently, but the price recovery also takes into account a gradual recovery in the market through the latter half of this year. With COVID-19, most goals have quickly become moving targets.
