Car dealers paid 1.6% less for used cars at auction in July than they did in June. Wholesale prices are 11.6% lower today than they were a year ago.
The numbers come from the Manheim Used Vehicle Value Index, a product of Kelley Blue Book parent company Cox Automotive.
Wholesale price drops trigger retail price drops, usually about six to eight weeks later.
Used car shoppers have seen an improving market in recent weeks. Retail prices dropped slightly in June – good news after several years of frequent price increases.
But retail prices have not fallen as far as wholesale prices. Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive, puts the numbers in perspective: “From July 2020, there were 22 straight monthly double-digit increases through April 2022; we’ve had just six double-digit declines since October last year.”
America’s automakers built about 8.1 million fewer cars than normal during the height of the COVID-19 pandemic. Those cars will never reach the used market, keeping some upward pressure on used car prices for years to come.
Price changes aren’t the same for every type of vehicle.
Wholesale prices of pickup trucks have fallen the least – just 6.6% in one year. Compact cars sit at the other end of the scale, fetching 15.9% less at auction than they did last July.
The Conference Board Consumer Confidence Index was up a refreshing 22.8% year-over-year in July. Plans to purchase a vehicle in the next six months increased to the highest level in nine months and were up year over year.
