A used car is displayed at a Roger Beasley South dealership on June 7, 2023 in Austin, Texas.
Brandon Bell | Getty Images
DETROIT — Wholesale used-vehicle prices last month saw their biggest drop since the coronavirus pandemic began, as prices are set to stabilize in the second half of the year.
Cox Motors reported on monday The Mannheim used car value index fell 4.2% from May to June to 215.1. Cox said it marked the index’s third straight monthly decline and one of its largest monthly declines on record.
Chris Frey, senior manager of Cox Economics, said: “Buyers at auction appear to have taken the early summer break and while second-hand retail stocks have been improving over the past few weeks, we expect There will be less volatility in wholesale price changes at the end of the year,” and industry insights, said in a release.
The index, which tracks vehicles sold at U.S. wholesale dealer auctions, remains above historical levels but is down 10.3% compared to June 2022.
That drop could help lower used-vehicle prices for consumers in the coming months, as retail prices traditionally track wholesale prices.
Used-car prices have been rising since the early days of the coronavirus pandemic, as the global health crisis coupled with supply chain issues kept new car production occasionally idled. That has led to a reduced supply of new vehicles, while demand is firm and prices are hitting record highs. Costs and a scarcity of inventory drove consumers into the used car market, also driving up prices.
Cox Automotive expects wholesale used car prices to drop about 1.1% by the end of the year compared with December 2022. That was less than the 4.3% decline the company had initially forecast, as pricing and demand were more resilient than expected at the start of the year.
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