Used Car Prices Are Plunging: 1 Under-the-Radar Stock That Could Benefit
If you've shopped for a used car in the past three years, you've undoubtedly noticed that prices are elevated. While it's true prices are up, the good news for would-be buyers is that they are starting to fall. And this price drop may also be good news for vehicle auction leader Copart (NASDAQ: CPRT).
Copart is an under-the-radar company that also happens to be a market-crushing stock over the long term. Its price is up 195% over the past five years and 704% over the last 10. That's why I'm particularly interested in what could be in store for it, considering the recent shifts in the used car market.
When a car is in an accident or damaged during a natural disaster, insurance companies have a choice to make: Pay to repair it, or declare it "totaled." If a vehicle is totaled, insurance companies then need to get rid of it, and they look to Copart for help. Copart sells vehicles via auctions to people who either want to fix them or dismantle them for parts. According to the company's filings, in 2022, 80% of the vehicles sold through Copart's online vehicle auctions in the U.S. came from insurance companies.
Source Fool.com
