Insight

Used car prices could crash - will they?

How used-car prices normalize after the new-car shortage ends could have profound impact on the entire industry

Gary Silberg

Gary Silberg

Partner, Global Automotive Sector Leader, KPMG US

+1 312-665-1916

Yoshi Suganuma

Yoshi Suganuma

Managing Director, Strategy, KPMG LLP

+1 212-872-7821

Bala Lakshman

Bala Lakshman

Managing Director, Strategy, KPMG US

+1 214-840-4005

Eric Shapiro

Eric Shapiro

Director, Advisory, KPMG US

+1 212-954-3084

The prices of used cars in the U.S. have risen by more than 40 percent, the result of reduced output by U.S. auto plants. Consumers and businesses that would normally buy new have piled into the used-car market, driving up prices at four times the pace of new-car prices. When the supply/demand situation normalizes, we can expect used-car prices to come back to earth. How this happens—how far and how quickly prices change—will have profound impact on the new-car market and on players across the auto industry.