(NEXSTAR) — With limited supply and an ever-increasing demand for vehicles, it hasn’t been an easy year for car buyers across the nation, let alone Illinoisans. But that may change in 2023.
iSeeCars.com analyzed more than 3.8 million 1-5-year-old used car sales in May and November 2021 and 2022 by state. Experts compared the average listing prices between the two time periods, calculating both percentage and dollar differences from the 2021 price for each model.
Data from the website showed the value of used car prices in Illinois dropping between May and November 2022. Karl Brauer, an executive analyst at iSeeCars.com, suggested the pattern is expected to continue into the new year.
His best advice for car buyers in Illinois is to wait a few months for a massive price drop.
“If they can hold onto their current car right now for even three to six months, they can likely get a better price on the car that they replace it with,” Brauer said. “If they are buying a car in the next three to six months, they’ll probably get a better price than they would even today and certainly for the past year.”
However, the price drop also means car owners looking to sell their current vehicle drop in value as well.
“If car owners have to get rid of their current car to purchase a replacement, they’ll probably get a lower price whenever they get rid of their car. That would be the case unless they can get rid of it now and get the next car in six months,” Brauer said.
Another takeaway from the data set is how Illinois car buyers are more conscious of the price of fuel, which Brauer said is reflected in the types of vehicles that are rising and dropping in value.
“It’s kind of an interesting mix on both sides,” Brauer said.
“It’s the big SUVs, they’re coming down in price. You’re also seeing some smaller cars that get good mileage or zero mileage because they don’t use fuel like the Bolt. There is still a heightened awareness of fuel costs and how to avoid those,” he continued.
Brauer also pointed out that the two BMWs listed as increasing in price are the smaller versions of the vehicle. He said that indicates Illinois buyers are looking for a balance between premium brands and good fuel economy.
Overall, Brauer said somewhere in spring 2022 was the peak of the car market. During that time was the biggest difference between the number of cars available (new or used) for purchase and the amount of demand for those cars.
However, with global geopolitical events like the invasion of Ukraine, interest rates shifting, and other economic concerns, demand for cars started to dampen, Brauer said.
At the same time, Brauer said the supply chain issue, which has persisted across all industries, since the start of the pandemic, is slowly moderating. He said there are more computer chips being produced, and the ability to produce them is slowly improving as well, which is helping the supply side.
“You start removing some demand from the market for various reasons, like interest rates and economic concerns, and you add in an increased level of supply because of some global supply chain issues being resolved. Not surprisingly, you start to slowly see pricing moderate. That’s what it’s looking like now versus, say, six to 12 months ago,” Brauer said.
Brauer expects supply and demand issues to stagnate into the new year.
“I do see demand likely falling in the next over the next six-plus months, but I don’t think it’s going to fall nearly fast enough to counteract the ongoing supply chain challenges that will probably be impacting price. It will be impacting supply, vehicle supply, vehicle production, and thus, the price for probably another one-to-two years minimum,” he said.
iSeeCars.com analyzed over 3.8 million 1-5-year-old used car sales in May and November of 2021 and 2022 nationally, and further analyzed the data by US state. The average listing prices of each car model were compared between the two time periods, and the differences were expressed as both a percentage difference from the 2021 price as well as a dollar difference. Heavy-duty vehicles, low-volume vehicles, vehicles discontinued as of the 2022 model year, and vehicles with fewer than 4 of the 5 model years for each period were excluded from further analysis.