The wholesale prices car dealers pay for the used cars they later sell are on the way up — not a good sign for used car shoppers.
The Manheim Used Vehicle Value Index tracks the prices dealers pay for used cars at auction. It is a product of Kelley Blue Book parent company Cox Automotive.
Used car wholesale prices took a long slide through summer, helping keep the price buyers paid under control. But that ended in August. The index rose another 1% in September. Changes in wholesale prices tend to become retail price trends about six to eight weeks later, and the long-term outlook for used car prices was already bad.
A United Auto Workers strike is making headlines, but analysts don’t think it’s to blame for price increases. Yet.
“We are at a crossroads for wholesale, mainly from concerns about the UAW strike’s potentially slowing new retail sales and moving buyers into the used market. We don’t see that happening just yet, as it always takes time for changes to work through the market,” says Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive.
“Two very different outcomes are possible. One is to see higher prices from an extended strike on new production also showing up at wholesale and then used retail. The second leads to very little change — a strike resolution leading to price declines at relatively normal rates,” he explains.
While wholesale prices are rising, they remain lower than last year. The average wholesale price is down 5.4% from September 2022.
The Conference Board Consumer Confidence Index declined by 5.2% in September, as future expectations plunged 11.5%, but views of the present situation increased 0.3%. Consumer confidence was down 4.5% year over year following two back-to-back months of decline. Plans to purchase a vehicle in the next six months declined but remained up year over year.
