When that shopper is waffling over whether the timing is right to buy a used car, here’s a selling point a dealer can pass along to that indecisive consumer, courtesy of CARFAX.

“It’s time to get off the fence if that’s where you’ve been sitting and waiting for the right moment to act,” CARFAX editor in chief Patrick Olsen writes in analysis around the latest CARFAX Used Car Index.

As it stands, retail prices for used vehicles have slowed significantly year-over-year:  used SUVs are down 9.5% from May 2023, with cars off 7.2% and pickup trucks falling 10.2%, according to the index.

Luxury SUV prices have dropped 10%, luxury cars are off 6.6%, hybrids & EVs are down 9.8% and vans prices have slowed 8.9%, according to CARFAX.

But while retail prices on used vehicle have dropped from what were peaks in most segments, the relief could be short-lived, the company contends.

The two-headed supply impact of 2021’s new-car production stoppages and decline in leases is lowering the number of 3-year-old vehicles available now, CARFAX said, and that will likely lift prices.

The company added that the slow used-car demand to start the year is likely to reverse course.

“Put all of that together, and it means it may be time to jump into the market if you’ve been waiting,” Olsen said. “It doesn’t mean that, down the road, prices won’t go lower again — after all, we still have historically high used-car prices — but it means the near-term outlook is for price increases.”

Olsen went on to note that the market may have reached the trough of this particular price decline and some segments have turned upward. Looking forward, interest rates may play a key role in how used-car prices fare the rest of the year, he said.

“The Federal Reserve didn’t lower interest rates last month, and continued inflation concerns may mean it will hold off for some time still,” Olsen said. “If interest rates stay high and used cars remain expensive to finance, that could curtail demand, and prices would normally decline in the wake of that.”