The prices car dealers pay for the used cars they later sell went down in March. That’s good news for used car shoppers, as that decline will probably result in lower prices.
The Manheim Used Vehicle Value Index, which tracks dealer prices at auction, declined 3.3% last month. It remains 23.2% higher than it was one year ago. The average used car sold for $27,608 in February.
The index is a product of Kelley Blue Book parent company Cox Automotive.
Prices declined for every type of vehicle. That has become unusual in the current market, driven by the global microchip shortage. Some segments of the market, like minivans, have typically held high prices even when most decline. Last month, even minivan prices dropped.
The pace of used car sales normally picks up significantly in March. It accelerated last month but less than most analysts expected. That’s probably the fault of the IRS – the agency is several weeks behind its normal pace in issuing tax refunds.
Based on IRS statistics through March 22, Cox Automotive estimates that 45% of this year’s likely number of tax refunds had been issued, when for the same week in 2019, 71% had been disbursed.
