[With Subtitles] CONTROLLED DEMOLITION: After the Artificial BOOM, the Inevitable Artificial BUST -- Car Prices Crash By 60% But The Worst Is Yet To Come

In a surprising twist, the U.S. auto market is experiencing a phenomenon that's both a blessing and a curse. Car prices, which once seemed to climb endlessly, are now plummeting at an alarming rate. For consumers, this means long-awaited relief at the dealership. But for many car dealers, this trend is nothing short of a nightmare.

For years, Americans have grappled with skyrocketing car prices. Now, amidst economic uncertainties, we are witnessing a dramatic shift. According to industry analysts, the average price of a new vehicle has dropped by nearly 20% year-over-year. The used car market is even more volatile, with prices plunging by an astonishing 59% from the 2022 peak.

According to data shared by Wolf Richter, seasonally adjusted, prices of used vehicles that were sold at auctions across the U.S fell to $18,151, the lowest since April 2021, and are down by $5,423 (or 23%) from the peak in January 2022, according to the Used Vehicle Value Index by Manheim, the largest auto auction house in the U.S. “From February 2020 through the crazy peak in January 2022, auction prices had spiked by a mindboggling 64%, or by $9,252,” Richter noted. “The historic plunge so far has surrendered 59%, or $5,423, of that $9,252 spike.”

Last month alone, prices fell significantly in all major vehicle categories on a yearly basis, according to Manheim. Luxury cars went down by 12.9%, while SUVs & crossovers prices declined by 14.6%, pickups lost 15.2%, midsize cars fell 16.8%, EVs dropped by 17.5%, and compact cars went down by 17.6%.