The Used Car Market Is SCREWED | Episode 1039

CarEdge Live dives into the deteriorating state of the used car market, revealing a perfect storm of rising demand, shrinking inventory, and escalating wholesale values. With tax refunds up 11% year-over-year and average refunds hitting $3,676, consumers have more cash to spend, fueling demand. At the same time, the day's supply of used cars sits at a critically low 25.1 days, and sales conversion rates are at 70%, indicating intense dealer competition at auctions. The Mannheim Used Vehicle Value Index is up 5.3% year-over-year and 5.6% from the start of 2026—far exceeding historical norms. EVs and hybrids are appreciating fastest, eroding their previous value advantage. A live experiment on CarEdge.com shows that even recently listed used cars are being discounted slowly, but with signs that dealers may soon reverse course and raise prices. The hosts warn that this trend may persist through 2026, defying the usual spring slowdown. On the financial side, auto loan delinquency rates have doubled since 2019, with 15% of serious delinquencies lasting five months or more—triple the 2019 level. This suggests banks are delaying repossessions, possibly to mask losses, creating a hidden risk in the credit system. The episode concludes with a caution: if you need a used car, buy it now—prices will likely rise soon.