Could surge in car prices finally have peaked?

Some U.S. auto sales experts say the record surge in car prices may have reached its peak and is headed downward. That includes the slightly lower value of used cars, which have been in great demand during the pandemic.

With supply chain issues and a shortage of micro-chip processors required for newer cars, used car prices soared – with some costing 50% more than the year before.

John Hiester with Hiester Automotive says negotiating the trends feels a lot like playing the stock market.

"You’re trying to make sure you buy when the value is good and you sell when it’s going up, not down," he said.

He admits that used car values have declined but it may have more to do with the time of year.

"Every year this time of year, the used car prices go down and not all used car prices have dropped," he said.

The average cost for a used car reached an all-time high of $28,000 in December, according to Cox Automotive.

Now, according to a report from CoPilot app, prices are down for the first time in many months – at an average of 1.4%.

Used cars 3-years-old or less dropped 2.1%, while 4-to-7 year-old used cars only lost 1% of their value.

Hiester stresses, however, that it’s a still a good market for selling your used vehicle as a trade-in.

"Even though, timing-wise, you may not get quite what you would’ve a month a go, you might not have to pay quite what you would have a month ago, so I think it’s a wash," he said.

He believes that warmer weather in Spring will do what it always does, inspire more people to shop for cars. He said, "When you get close to vacation time of year, they are wanting something nice to travel in."

As for new vehicles, Hiester says the current supply chain challenge of filling up car lots with new cars won’t change in the next three to four months. His advice is in order to get the new car you want, you should order it now.