Cars Depreciating at a Slower Rate

[bjl584]

The market disruptions that were caused by the pandemic are likely to stay long-term.
Analysts predict that cars will depreciate at a slower rate from here on.
Some holding value at 10% higher or more than pre-pandemic.


Why cars lose their value so quickly (cnbc.com)

[Jluke]

We bought a 2015 RAV4 (used) in 2017 for about 23k.

we traded it in this week and the dealer is now selling it for 18k. (75k miles)

[disneysteve]

I wonder how this plays out. If used cars are holding their value longer does that make new cars more attractive? If so, won’t that then cause used car prices to drop because they aren’t selling? Isn’t that how supply and demand works?

[ua_guy]

10% doesn't seem like a whole lot and follows inflation since the pandemic.

It could also be driven by interest rates. People are holding on to used vehicles longer (constraining inventory) as they don't want to finance at significantly higher rates.

[srblanco7]

I wonder how this plays out. If used cars are holding their value longer does that make new cars more attractive? If so, won’t that then cause used car prices to drop because they aren’t selling? Isn’t that how supply and demand works?

Agreed. It would seem supply and demand has to factor into how the market is pricing used cars. This would seem to imply that supply remains constrained or that demand remains unusually high.