Used car prices are likely to have bottomed out in 2023

Used cars are listed for sale at a dealership on July 11, 2023 in Chicago, Illinois.

Scott Olson | Getty Images

DETROIT – Wholesale used car prices may have hit their low point for the year as Cox Automotive said prices rose last month for the first time since March.

Cox reported on Friday Its Manheim Used Vehicle Value Index was 212.2 in August, up 0.2% from July. This represents the index’s lowest increase this year as prices generally have fallen from all-time highs due to the coronavirus pandemic and supply chain issues in recent years.

The index, which tracks vehicles sold at its U.S. wholesale auctions, remains at historical levels but is down 7.7% compared to August 2022. Consumer retail prices traditionally follow changes in wholesale prices.

“August brought wholesale price declines to a halt, although it was only a small reversal of larger declines this spring and early summer,” Chris Frey, senior manager of economic and industry insights at Cox, said in a news release.

Frey said wholesale prices for used vehicles are not expected to change significantly through the end of the year as tight inventory and expected sales volumes prevented significant price declines.

Cox estimates used car retail sales rose 5% in August compared to July and 0.8% year over year. The stated average price for a Used cars in July – the latest data – was at $27,028, down from the previous month but still above historical levels.

Used car prices have risen since the early days of the Covid pandemic, as the global health crisis combined with supply chain issues caused production of new vehicles to sporadically halt. This led to a low supply of new vehicles and record high prices amid robust demand. The cost and shortage of inventory caused consumers to turn to the used car market, which also drove up prices.

Cox expects the used car wholesale market to see a “slow and gradual recovery” in prices to pre-pandemic levels by 2028. Used car prices are likely to have bottomed out in 2023

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