Used car dealers paid more for used cars at auctions in May – a sign that usually foretells increases in retail prices. The news comes after several months of wholesale price drops.
Used cars cost dealers 1.1% more in May after adjusting for normal seasonal fluctuations. The Manheim Used Vehicle Value Index, which tracks wholesale prices adjusted for predictable monthly changes, has increased 9.7% in one year. Manheim is part of Cox Automotive, which is also the parent of Kelley Blue Book.
Wholesale price increases usually mean retail price increases. And retail prices were already on the rise before this news. The average used car buyer paid $28,365 in April – an increase of more than $1,100 in just one month.
Used pickup trucks saw their wholesale prices drop 2.7% during the month. Prices increased in every other segment of the market. Vans and minivans led the way with an eye-opening 27.6% price bump during the month. With Americans searching for more fuel-efficient cars amid record gas prices, compact car prices increased by nearly 15%.
