After all the price records – now the price of used cars is falling

Used cars have fared well during the economic crisis and have continued to set new price records, but now the trend may be broken. Our statistics show that the average price fell by 5.6 percent during October. More expensive cars with price tags of more than SEK 500,000 were the ones that fell the most in price – a whopping 8.6 percent.

Rising interest rates and price increases on new cars have steered consumers toward the used market, which has seen sharply rising prices in the past year. But now there are signs that prices may be on the way down. In October, a price decrease of 5.6 percent was registered compared to the previous month in the auctions on kvd.se. The statistics are based on approximately 20,000 sales annually, and are measured using the BPI (Car Price Index) by our sister company Bilpriser.se .

Daniel Odsberg, sales manager at Kvdbil, points out that it is common for prices to drop in October. But the seasonal variation and the slightly higher average age of the cars sold, which could also be discerned, do not fully explain the decline, he believes.

- Although used cars have a clear advantage over new cars in tougher economic times, it is not realistic to expect prices to rise indefinitely. Now it is clear that something has happened in the market, he says.

But whether we are now entering a prolonged period of decline for prices on the used market, or whether it will just be a temporary bump in the curve, remains to be seen, according to Odsberg.

- Historically, the prices of used cars have followed the housing market and rose during the spring. If this pattern is thought to continue, now is the time to pounce and take advantage of a significant discount from just a month ago. But it cannot be ignored that many people's financial situation has worsened considerably in the last 18 months, and that it could become even tougher if the Riksbank chooses to raise the key interest rate once more. Of course, this also affects people's ability to invest in a used car, says Daniel Odsberg, sales manager Kvdbil.

Price race for exclusive cars

Mainly it was more expensive cars, with price tags over SEK 500,000, which contributed to the decline. In this price range, prices fell by as much as 8.6 percent. For cars with auction prices ranging from under SEK 100,000 to SEK 300,000, the price reduction was more modest. Here it was about declines from -1.3 to -1.6 percent. At the same time, somewhat unexpected increases were noted in the Car Price Index (BPI) for cars in the price categories SEK 300-400 thousand and SEK 400-500 thousand. In both cases, however, the increase was less than one percent.

- Although there are variations in the statistics, we can see that it is above all more expensive cars that have fallen in price. When finances become more important, people often prioritize other expenses over expensive cars. In addition, it is more common for more expensive cars to be financed with loans, which makes them more sensitive to interest rate changes, in the same way as housing, explains Odsberg.

Price change for used cars, October 2023 (Car price index, BPI Current*):

Continued high pressure on the market

Although there is a decline in the price picture for some used cars, there is still high demand on the market. During October, 2,500 cars were sold through the kvd.se marketplace, which is an increase of 17 percent compared to the previous year. The cars are sold by auction or fixed price and during the month 51 bids** were recorded per car sold at auction.

*BPI Momentan shows the exact price development month by month. This is a sensitive index and differs from Car Prices' main index, BPI Total, which uses 3-month rolling averages to smooth price fluctuations.

**Bid at a level that corresponds to at least 85 percent of the seller's minimum selling price for the car being sold.