Used vehicle prices swing higher amid unseasonably high demand in January

DETROIT – Stronger-than-expected request for utilized vehicles past period led to the largest summation successful wholesale values since precocious 2021, according to caller information Tuesday from Cox Automotive.

The automotive information firm's Manheim Used Vehicle Value Index was down 12.8% successful January from inflated levels a twelvemonth earlier but was up 2.5% compared with December. It was the largest month-over-month summation since a 3.9% leap from October to November 2021.

The larger-than-expected summation successful the index, which tracks prices of utilized vehicles sold astatine its U.S. wholesale auctions, was successful portion the effect of unseasonably precocious demand, according to Cox.

Used conveyance prices person progressively go a constituent of involvement for investors and the Biden medication arsenic a barometer for easing inflation. The medication aboriginal past twelvemonth blamed overmuch of the rising ostentation rates successful the state connected the utilized conveyance market. 

The Manheim Used Vehicle Value Index posted a 15% decline past twelvemonth arsenic buyers held disconnected from purchasing a utilized conveyance owed to record-high prices.

Cox reports the mean listed terms of a utilized conveyance was $27,143 successful December, the astir caller information available, down astir 4% from a twelvemonth earlier. Retail prices for consumers traditionally travel changes successful wholesale prices.

The probe steadfast past period said the used-vehicle marketplace had stabilized, resembling its pre-pandemic normal, with inventory holding dependable and prices dipping from their grounds highs. It forecasted wholesale prices connected its Manheim Used Vehicle Value Index to extremity 2023 down 4.3% from December 2022.

Used conveyance prices person been elevated since the commencement of the coronavirus pandemic, arsenic the planetary wellness situation combined with proviso concatenation issues caused accumulation of caller vehicles to sporadically idle. That led to a debased proviso of caller vehicles and record-high prices amid resilient demand. The prices and scarcity of inventory led consumers to bargain utilized vehicles, expanding those prices arsenic well.