SAN DIEGO — Used-vehicle costs are unlikely to crater within the coming months partly due to the power of lingering new-vehicle demand, a J.D. Energy professional mentioned.

Approaching a “cliff edge” in used-vehicle costs probably will not occur as a result of pent-up shopper demand on the new-vehicle aspect equates to possible gross sales of greater than 4 million autos, mentioned Tyson Jominy, vp of information and analytics at J.D. Energy, who spoke Monday on the Used Automobile Week convention in San Diego.

If automakers might produce autos at 2018 ranges, they’d “clear this [backlog of sales] fairly rapidly” and “be again to a extra reasonable worth surroundings,” Jominy mentioned.

Used-car market trackers report that wholesale costs peaked in November and December 2021, Jominy mentioned. Within the lead-up to that, costs for the common used automobile went from hovering round $15,000 all the way in which to $28,000, he mentioned. Since then, costs have trended about $3,000 decrease, Jominy mentioned.

However despite the fact that wholesale costs have decreased, they have not modified a lot on the retail stage, he added.

Jominy mentioned one purpose he’s optimistic that retail used-vehicle costs might be sturdy — extra so than 2021, once they saved rising — is as a result of the variety of autos flowing again into the market stays pretty restricted, and there is not any getting round that.

Pandemic-related disruptions have reduce the numbers of latest autos produced and bought annually since 2020. And leasing charges have tumbled dramatically.

“Automobiles — there’s far fewer of them coming again yearly, based mostly on different metrics that we have seen,” Jominy mentioned.

Leased autos between one and three years outdated, specifically, are going to be “very troublesome to search out” by 2025, he added.

“These autos are mainly gone, and the leased market actually is not going to return till we begin speaking about these different components, concerning the worth surroundings moderating,” Jominy mentioned.