Used car prices seem to be resetting. Wholesale used car prices fell in the first 15 days of October — a good sign that used car prices will continue on the downward trend they’ve been on since summer.
Car dealers paid almost 2% less for used cars at auction in the first two weeks of the month, according to the Manheim Used Vehicle Value Index. Wholesale prices are now 9% lower than a year ago.
Manheim is part of Cox Automotive, which is also parent to Kelley Blue Book.
Wholesale price drops turn into retail price drops. When dealers pay less for cars at auction, they can sell them for less and keep the lights on.
Every segment of the used car market saw prices drop. Compact cars had the lowest decline at -5.4%. SUVs, midsize cars, and luxury cars all saw their wholesale prices fall more than 10% year-over-year.
Car dealers measure their stock of cars to sell in a metric they call days of inventory – how long it would take them to sell out of cars at the current sales rate if they didn’t acquire more. Nationwide, used car dealers had about 49 days’ worth of used cars to sell in early October – nine days more than a year ago.
Used supply measured in days’ supply and compared to 2019 suggests supply is tighter than normal for this time of year, which indicates that depreciation should be lower than normal for the time of year as well.
