Used vehicle prices may have bottomed for 2023

DETROIT — Wholesale used-vehicle prices may have bottomed out last month, rising for the first time since March, Cox Automotive said.

Cox report on friday In August, the Mannheim used car value index was 212.2, up 0.2% from July. That marked the index’s weakest gain this year, as prices have generally retreated from record highs in recent years due to the coronavirus pandemic and supply chain issues.

The index, which tracks vehicles sold at U.S. wholesale dealer auctions, remains above historical levels but is down 7.7% compared to August 2022. Retail prices to consumers have traditionally followed changes in wholesale prices.

“The decline in wholesale prices came to a halt in August, although it was only a small reversal of the steep declines so far this spring and early summer,” Chris Frey, senior manager of economics and industry insights at Cox, said in a release. .”

Wholesale used car prices are not expected to change much through the end of the year, Frey said, with tight inventories and expected sales levels preventing sharp price drops.

Cox expects used car retail sales in August to increase 5% from July and 0.8% year-over-year.The average price listed is July Used Cars The latest figure was $27,028, down from a month ago but still above historical levels.

Used-car prices have been rising since the early days of the coronavirus pandemic, as the global health crisis coupled with supply chain issues has occasionally idled new car production. 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 expects prices in the wholesale used car market to “slowly and gradually recover” to pre-pandemic levels by 2028.