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 over 500,000 SEK 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 towards the second-hand market, which has seen prices rise sharply over the past year. But now there are signs that prices may be on the way down. In October, a price decline of 5.6 percent was recorded 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 (second-hand 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. However, the seasonal variation and the slightly higher average age of the cars sold, which was also noticeable, 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. It is now clear that something has happened in the market,” he says.

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

– Historically, used car prices have followed the housing market and increased during the spring. If you think this pattern will continue, it may be time to act now and take advantage of a significant discount compared to just a month ago. But it cannot be ignored that many people's financial situation has deteriorated significantly in the last 18 months, and that it could become even tougher if the Riksbank chooses to raise the key interest rate once again. Of course, this also affects people's ability to invest in a used car, says Daniel Odsberg, Sales Manager Kvdbil .

Price drop for exclusive cars

It was primarily more expensive cars, with price tags over SEK 500,000, that contributed to the decline. In this price range, prices fell by a full 8.6 percent. For cars with auction prices ranging from under SEK 100,000 to SEK 300,000, the price decrease was more modest. Here, the declines ranged 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 ranges of 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 primarily more expensive cars that have fallen in price. When the economy becomes 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 (used car price index, BPI Momentan*):

Continued high pressure on the market

Although there is a decline in the price picture for some used cars, there is still high demand in the market. During October, 2,500 cars were sold through the marketplace kvd.se , 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 noted per car sold at auction.

*BPI Momentan shows the exact price trend month by month. This is a sensitive index and differs from Bilpriser's main index, BPI Total, which uses rolling 3-month averages to smooth out 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.