Used car prices have now hit record highs, adding stress on car companies when it comes to shipping out new models.
In a Used Car Report published by car review site Edmunds, the average used car prices hit 2.2 percent higher from 2017 and 18 percent higher than the same period five years ago, in part due to rising gas prices, off-lease vehicle support, and increased demand for a larger variety of vehicles.
As a result of increased used car prices, consumer demand has slowed for SUVs over compact cars, with compact cars (e.g. Civic, Corolla) now costing 3,9 percent higher compared to 2017, with nearly identical figures for subcompact cars like the Nissan Versa and the Honda Fit.
"Used-car shoppers are typically more price-sensitive to changes in the market, but this is the first time in years that we're seeing renewed demand for smaller vehicles," said Ivan Drury, senior manager of industry analysis at Edmunds. "With rising fuel costs breathing fresh air into this segment, subcompact and compact cars are finally retaining value again."
Drury also shared a word of advice for SUV and truck owners thinking of trading in their vehicles amidst rising fuel prices.
"Gas prices are cyclical, and individuals who react too soon could find themselves deeper in the red, especially considering all of the other costs associated with trading in a vehicle," added Drury. "The best rule of thumb is to wait this out."