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.
It all started with Gran Turismo. From those early PlayStation days, Sean was drawn to anything with four wheels. Prior to joining the Roadshow team, he was a freelance contributor for Motor Authority, The Car Connection and Green Car Reports. As for what's in the garage, Sean owns a 2016 Chevrolet SS, and yes, it has Holden badges.
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.
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