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The wholesale prices used car dealers pay for cars they then resell to buyers fell in the first half of April.
The Manheim Used Vehicle Value Index, which tracks the wholesale prices auto dealers pay at auction, fell 1% after adjusting for normal seasonal fluctuations. The index is a product of Kelley Blue Book’s parent company, Cox Automotive.
A drop in wholesale prices generally heralds a drop in retail prices. The average used car sold for $27,246 in March, a third straight month of falling prices.
Prices are still historically high – 14.1% more than in April 2021. Virtually all types of vehicles are more expensive now than a year ago, with the exception of pickup trucks, which saw a drop of 0.2% year over year.
But analysts believe the price decline may not last long. The IRS is behind its usual pace of issuing tax refunds this year, which means a normal spring rebound in used car sales should occur later this year.
Charlie Chesbrough, senior economist at Cox Automotive, explains: “The anniversary of the chip shortage – when prices started to soar – is approaching. Year-over-year growth rates will come down to earth. However, the prices will not turn negative. Instead, they should return to more normal growth patterns, but from a higher base.
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