SALT LAKE CITY (ABC4 News) – During the height of Coronavirus in Utah and across the country, the financial effects of the pandemic has caused used car sales to plummet. Analysts at Co-Pilot, a vehicle consumer app, using their dataset of over 1.3 million used car listings, have identified the U.S. states where used car prices have dropped the most so far. Co-Pilot aggregates car listings data in real-time across 46,000 U.S. dealers, between January and May 2020.
In Utah, the study finds that car prices have dropped an average of 4.50% in Utah since January, that is compared to a drop of 3.60% nationally.
Out of all 51 states, Utah’s used car prices have dropped 3rd most during the pandemic in the U.S.
The uncertainty of employment due to COVID-19 has affected every sector of the U.S economy, including the automotive industry. Many car dealerships are experiencing sharp declines in used car sales, even as parts of the country began to reopen.
While used car sales have always been subject to fluctuations, data from the U.S. Census Bureau found that retail used car sales saw a decrease as early as March even before the full effects of stay-at-home orders were realized. The last time that used car sales fell so precipitously was at the onset of the Great Recession in 2008.
Experts from Kelley Blue Book suggest that because car dealers have largely avoided purchasing new inventory in recent weeks, they aren’t in a rush to cut prices as a way to move their existing inventory. However, an analysis from Max Digital predicts that a combination of record supply, damaged consumer confidence, and new car incentives will ultimately create a perfect storm causing retail prices to drop sharply in the coming weeks.
On a national level, used cars are seeing a slight drop in retail prices. However, some parts of the country are already experiencing steeper declines than others. Between January and May, individual U.S. states experienced price drops ranging from 1-5 percent. The states with the biggest drops include Utah, Delaware, and Florida, which all experienced decreases greater than 4.5 percent. By contrast, the states with the lowest drops include Hawaii, Wyoming, and Mississippi.
Researchers have also found that the automobile model with the biggest drop in used sale prices since January in Utah is the Hyundai Sonata (-11.3%).
Across the nation as a whole, the Fiat 500e (-17%) has experienced the largest drop.