Wholesale used car prices in the United States plunged again in July, although less than that in June, according to two major indicators for the auto industry.
Used vehicle prices plunged, while a combination of high interest rates and inflation pushed car payments, maintenance, and auto insurance costs upwards.The index was 11.6 percent lower in July compared with the same month in 2022, according to Cox.
Used Car Prices Ease for Consumers
The Manheim index, which measures wholesale used-vehicle prices by tracking vehicles sold at Manheim’s auctions in the United States, fell 1.6 percent in July.The seasonally adjusted decline in July was “an indicator of slowing wholesale price declines, at least when compared to the month-over-month losses we’ve seen since April,” said Chris Frey, senior manager of economic and industry insights for Cox Automotive.
The Manheim Index said that the July decrease was softened by seasonal adjustments and that non-adjusted figures were down 3.8 percent for that month, moving it down 10.7 percent year over year.
Average non-adjusted wholesale prices for a 3-year-old vehicle, which is the most popular model sold at auctions, declined an aggregate 3.4 percent over the last four weeks.
However, the cost of financing a car and keeping it in service is rising.
Black Book’s price index fell 2.5 points to 171.1 in July, which is 9.6 percent below where it was at the same time in 2022.
That measure is 49 percent higher than it was in March 2020 at the start of the pandemic.
Wholesale prices for most vehicle segments in July, with the exception of the mid-size car market, declined at rates “exceeding the typical pace for this time of year,” wrote Alex Yurchenko, chief data science officer at Black Book.
“We have started to see improvements in the conversion rate at auctions as remarketers were willing to lower floors,” Mr. Yurchenko said.
Available Used Car Supplies Fall as Sales Increase
In contrast, Manheim’s sales and inventory data showed that wholesale supply was estimated to have finished last month at 27 days, up from 26 days at the end of June and down 30 days from July 2022’s estimate.
While used vehicle inventory remain volatile, their sales were showing some growth this summer.
On the other hand, Mr. Frey said he did not expect any wholesale price declines “of serious import” through December.
New car prices also remain high due to the slowdown vehicle production during the pandemic, which lowered inventory amid increased demand, but have since stabilized.