Used cars are offered for sale at a dealership on July 11, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
DETROIT – Prices of wholesale used vehicles may have bottomed for the year, as Cox Automotive said prices last month increased for the first time since March.
Cox reported Friday its Manheim Used Vehicle Value Index was 212.2 in August, up 0.2% from July. It marks the lowest increase in the index this year, as prices have generally fallen from all-time highs stemming from the coronavirus pandemic and supply chain problems of recent years.
The index, which tracks vehicles sold at its U.S. wholesale dealership auctions, remains elevated from historical levels but is down 7.7% compared with August 2022. Retail prices for consumers traditionally follow changes in wholesale prices.
“August brought a stop to wholesale price declines, though it was only a small reversal of the larger magnitude declines so far this spring and early summer,” Chris Frey, Cox senior manager of economic and industry insights, said in a release.
Frey said wholesale used vehicle prices are not expected to change much through the end of the year, with tight inventories and expected sales levels preventing any substantial pricing declines.
Cox estimates used vehicle retail sales in August were up 5% compared with July, and year over year they were up 0.8%. The average price listed for a used vehicle In July – the most recent data – was $ 27,028, down from a month earlier but still elevated from historical levels.
Used vehicle prices have been elevated since the early days of the Covid pandemic, as the global health crisis combined with supply chain issues caused production of new vehicles to sporadically idle. That led to a low supply of new vehicles and record-high prices amid resilient demand. The costs and scarcity of inventory led consumers to the used vehicle market, boosting those prices as well.
Cox expects the used vehicle wholesale market to experience a “slow and gradual recovery” in prices to pre-pandemic levels by 2028.