- According to Cox Automotive, there was a larger increase in wholesale values last month than there had been since late 2021 due to stronger-than-expected demand for used cars.
- The Manheim Used Vehicle Value Index, produced by the automotive data company, increased 2.5% from December but was down 12.8% from inflated levels a year earlier.
- Investors and the Biden administration have grown increasingly interested in used car prices as a gauge of declining inflation.
According to new data released by Cox Automotive on Tuesday, stronger-than-expected demand for used cars last month caused the largest increase in wholesale values since late 2021.
The Manheim Used Vehicle Value Index for January was up 2.5% from December but was down 12.8% from inflated levels a year earlier, according to the automotive data company. Since a 3.9% increase between October and November 2021, it was the largest month-over-month increase.
The index, which tracks the prices of used cars sold at its U.S. dealerships, increased more than was predicted. wholesale auctions, was in part the result of unseasonably high demand, according to Cox.
Investors and the Biden administration are becoming more and more interested in used car prices as a gauge of declining inflation. Early last year, the government attributed the nation’s rising inflation rates in large part to the used car market.
Due to record-high prices, buyers put off buying a used car last year, which resulted in a 15% decline in the Manheim Used Vehicle Value Index.
In December, according to Cox, the most recent data available, the average listed price of a used car was $27,143, which is a decrease of almost 4% from a year earlier. Traditionally, changes in wholesale prices are followed by changes in retail prices for consumers.
Last month, the research company reported that the used car market had stabilized, resembling its pre-pandemic normal, with inventory remaining stable and prices declining from their record highs. According to its Manheim Used Vehicle Value Index, wholesale prices were predicted to decrease 4.3% by the end of 2023 compared to December 2022.
Since the coronavirus pandemic began, used car prices have increased as a result of the supply chain problems and global health crisis that have intermittently halted new car production. Due to the strong demand, there was a lack of new cars on the market and their prices reached all-time highs. Because used cars were more affordable and more readily available, more people bought them, driving up their prices.
Source: cnbc.com
