Used car prices have been heating up fast throughout 2021. There have been subtle signs that the rise could start to slow soon. But a key indicator of near-future prices – the price dealers pay at auction for the used cars they later sell – continues to rise.
The Manheim Used Vehicle Value Index tracks the prices dealers pay for the used cars they plan to sell, adjusted for normal seasonal variations, the types of cars dealers buy, and mileage. It’s a product of Kelley Blue Book parent company Cox Automotive.
Through the first two weeks of December, the index rose 3.1%.
When dealers pay more for used cars, they pass that additional cost on to buyers. So, the rising index likely means used car prices will continue to rise in the coming weeks. The price of the average used car has increased by 27% in the last calendar year. It crossed the $27,000 mark for the first time late last month.
But there is some reason to believe prices may cool off soon. Dealers ended November with 2.31 million vehicles available for sale – a slight increase over October’s inventory.
