Overview

The used vehicle market in New Mexico, as in the rest of the United States, has experienced notable changes over the past month. Here's a summary of the current trends and predictions for the market:

Recent Price Trends

1. Price Reductions: There has been a noticeable drop in the prices of various categories of used vehicles. For instance, hybrids and electric vehicles (EVs) saw an average price reduction of about $560 last month. Pickup trucks, luxury SUVs, and vans also experienced significant price drops, in the range of $500 or more​​.

2. Stabilizing Market: After a period of high prices due to the COVID-19 pandemic, used vehicle prices are expected to stabilize in 2024. This comes after a 7% decline in 2023 and a nearly 15% decrease in 2022. While prices are stabilizing, they still remain higher than pre-pandemic levels​​.

3. Impact of Interest Rates: With used car interest rates soaring beyond 14% APR, there's been a slowdown in the buying pace. This has led to an increase in the days-to-turn for used cars in dealerships​​.

Sales Forecasts and Consumer Behavior

1. Increasing Sales: The total number of used vehicle sales is expected to slightly increase in 2024, with forecasts predicting around 36.2 million sales, up from 35.9 million in 2023. The retail sales segment is anticipated to contribute significantly to this increase​​.

2. Consumer Demand for Older Cars: Interestingly, there's a growing trend of appreciation for older used cars. This shift in consumer preference is largely driven by budget constraints, as newer models have become more expensive​​.

3. Certified Pre-Owned Growth: The certified pre-owned segment is also expected to grow, adding an estimated 100,000 vehicles to reach 2.7 million in sales​​.

Market Insights and Buyer Advice

• Buyer Considerations: Although prices are stabilizing, it's still a significant investment to purchase a used vehicle. Buyers are advised to do thorough research and consider the total cost of ownership, including interest rates and potential value depreciation.
• Market Dynamics: The used car market is influenced by various factors, including the supply of new cars, economic conditions, and consumer preferences. Understanding these dynamics can help buyers make informed decisions.

In conclusion, the used vehicle market in New Mexico is showing signs of stabilization with a slight increase in sales projected for 2024. Price drops across various segments present opportunities for buyers, though high interest rates and economic uncertainty remain key considerations. As always, thorough research and understanding of the market are crucial for prospective buyers.