Used car prices have been rising gently in recent weeks. The average used car was listed for $25,415 in July — $164 higher than June’s average.
Used car shoppers can predict the future — imperfectly — by watching the prices dealers pay at auction for the used cars they later sell. A wholesale price change usually leads to a retail price change about six to eight weeks later.
In recent months, we’ve watched wholesale prices rise slowly, and, sure enough, list prices have followed. But there may be an end in sight. That trend has reversed.
The news comes from Cox Automotive, Kelley Blue Book’s parent company. Cox Automotive also owns Manheim, the operator of America’s largest used car auctions. Its Manheim Used Vehicle Value Index tracks prices paid at auctions.
The index fell by 0.2% over the first 15 days of September. It’s down a full 5% from September of last year.
That follows a predictable pattern, says Jeremy Robb, senior director of Economic and Insights at Cox Automotive. “It’s normal for seasonally adjusted values to cool a bit in the first half of September as results include the impact from the Labor Day holiday week, which has a lingering effect on the industry over a few weeks.”
But it’s still good news for buyers, suggesting that used car prices could cool headed into the holidays.
In the first half of September, seasonally adjusted prices remained lower year over year in all major market segments.
Luxury vehicles saw auction prices drop 3.4% compared to last September. Compact cars fell by 4.6% over the same period. Falling more than the average, SUVs were down 5.2%, midsize cars fell by 5.7%, and pickups declined 7.5% year over year.
