The wholesale prices car dealers pay for the used cars they later sell rose by a surprising 4.3% in February. When dealers pay more for cars at auction, they pass those higher prices on to buyers. So, a significant rise in the average used car price is likely coming.
Some increase is normal as dealers stock up for the spring selling season. But, adjusted for normal seasonal fluctuations, the increase still shows up, measuring 3.7%.
The figures come from the Manheim Used Vehicle Value Index, a product of Kelley Blue Book’s parent company Cox Automotive, which tracks the prices dealers pay for the used cars they later sell to consumers.
The increase comes after a sustained drop in wholesale prices. Paired with falling new car prices, the change means that a market flip is likely underway. After a long period of high new car prices and low used car prices, the two trends are trading places.
That’s great news for those who want to trade in a car to buy a new one, but it’s harder for those purely in the used car market.
Thin supply is driving price increases. America’s used car dealers ended February with an average of 41 days’ worth of cars to sell — down from 48 at the end of January and 54 at the end of February 2022.
