- Wholesale prices for used vehicles fell last month for the first time this year.
- Cox Automotive posted a 3% decline from March to April in its Manheim Used Vehicle Value Index.
- Further declines could help lower used vehicle prices for consumers, as retail prices traditionally follow changes in wholesale prices.
A used car dealership is seen in Annapolis, Maryland on May 27, 2021 as many car dealerships across the country are running out of new vehicles as a shortage of computer chips has made that the production of many vehicle manufacturers almost stopped.
Jim Watson | AFP | Getty Images
DETROIT – Wholesale prices for used vehicles fell last month for the first time this year as automakers ramped up production of new cars and trucks.
Cox Automotive on Friday reported a 3% decline from March to April in its Manheim Used Vehicle Value Index, although levels remain elevated compared to historical figures.
The index, which tracks vehicles sold at its U.S. wholesale auctions, is still up 5.2 percent from December, but down 4.4 percent from April 2022.
“We’ve had eight straight months of year-over-year declines, averaging 8.3%, and it’s likely not over yet,” Chris Frey, Cox’s senior director of economic and industry information, said in a statement .
Used vehicle prices have been elevated since the start of the coronavirus pandemic, as the global health crisis combined with supply chain issues caused new vehicle production to sporadically stall. This led to low new vehicle supply and record prices amid resilient demand. Costs and inventory shortages led consumers to buy used vehicles, driving up those prices as well.
Further declines could help lower used vehicle prices for consumers, as retail prices traditionally follow changes in wholesale prices.
Cox reports that the average price of a used vehicle was $26,086 in February, the most recent data available, down slightly from January.
“Prices have been coming down, but tight supply could be providing some price support,” said Charlie Chesbrough, senior economist at Cox. “Used prices may fall further, but a massive decline seems unlikely given the supply situation.”
Used vehicle prices have increasingly become a point of interest for investors and the Biden administration as a barometer for easing inflation. The administration earlier last year blamed much of the rising inflation rates in the country on the used vehicle market.
