Used vehicle demand and prices continue to decline from record highs – By Michael Wayland (CNBC) / Dec 7, 2022
- Wholesale prices of used vehicles reached their lowest level in more than a year last month, as retail sales decline amid interest rate hikes, rising new vehicle availability and recessionary fears.
- The Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions, has declined about 16% from record levels in January.
- The decline is good news for potential car buyers, however not great for companies such as Carvana that purchased vehicles at record highs and are now trying to sell them at a profit.
DETROIT – Wholesale prices of used vehicles reached their lowest level in more than a year last month, as retail sales decline amid interest rate hikes, rising new vehicle availability and recessionary fears.
Cox Automotive said Wednesday that its Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions, has declined 15.6% from record levels in January through November. The index dropped to 199.4 last month, below 200 for the first time since August 2021, and is down 14.2% from the same month a year ago. It marks the sixth-consecutive month of declines.
The falling prices come as the availability of new vehicles steadily rises from historic lows, providing additional options for consumers and potentially better loan options from automaker’s financing arms.
“New inventory is finally starting to build, and that’s producing momentum in new retail sales, but that momentum appears to be at the expense of used retail. Especially it’s the traditional used car buyer that’s most impacted by payment affordability,” Cox chief economist Jonathan Smoke said Tuesday during an industry update.
