After two years of sticker shock, used car shoppers are getting some relief.
Wholesale auction prices dropped again last month, and that decline is slowly working its way to dealership lots.
The catch: the biggest savings are landing on certain models while popular trucks and SUVs barely budge.
According to auction data tracked by industry analysts, wholesale values have slipped for several consecutive months.
Manheim's used vehicle index, a widely followed benchmark, has eased from its pandemic-era peaks.
Since dealers buy at auction and resell to you, those lower costs typically show up on lots within six to eight weeks.
Sedans, compact cars, and EVs are seeing the steepest cuts.
A three-year-old electric vehicle that once carried a hefty premium may now sit thousands below its original asking price.
Meanwhile, full-size pickups and rugged SUVs hold their value because demand stays strong and supply stays tight.
The reason prices climbed so high in the first place was a perfect storm.
New car production stalled during chip shortages, pushing buyers into the used market.
Rental fleets stopped selling off cars, and stimulus money gave shoppers extra cash.
That combination drained inventory and sent prices soaring.
New car inventory has recovered, automakers are offering incentives again, and more trade-ins are hitting the market.
When new cars get cheaper, used cars have to follow.
Here's what to do if you're shopping right now.
First, get preapproved for financing before you walk onto a lot, so you're negotiating on price alone.
Second, check the same model at three different dealers, since pricing varies wildly by region.
Third, look at certified pre-owned programs, which often include warranties and lower interest rates than a private sale.
Even as car prices fall, auto loan rates remain elevated compared to a few years ago.
A lower sticker price can be wiped out by a bad loan.
Run the total cost, not just the monthly payment, before you sign anything.
The last week of the month and the end of a quarter are when salespeople are chasing quotas.
That's often when you have the most room to negotiate.
Bring your own financing offer and let them try to beat it.
Some dealers are padding prices on the hottest models to offset thinner margins elsewhere.
If a truck or SUV is marked up well above market value, walk away.
Patience saves real money in this market.
If you can wait a few more months, the trend line suggests more relief is coming.
But if you need a car now, focus on the segments where prices are actually dropping.
Sedans and EVs are your best bet, and a little homework can save you thousands.
The bottom line: the used car market is cooling, but it's not a fire sale.
Final Thoughts
Shop smart, finance smart, and let the numbers guide you instead of the monthly payment.