It sucks to be in the market for a car these days. High MSRPs and even higher dealer markups make a lot of new cars unreachable for a lot of buyers, which has increased demand for used cars. As a result, pre-owned prices have shot up as well. For the first time in a while, though, we have some good news about used car prices.
CNBC reports that last month marked six months in a row that wholesale used-vehicle prices fell. They’re now 15.6 percent lower than they were in January 2022, their lowest point since August 2021. That data comes from Cox Automotive’s Manheim Used Vehicle Value Index, which tracks wholesale auction prices.
One reason for the steady drop in prices is the increased availability of new cars. You can also credit higher interest rates for reducing demand for cars across the board, not to mention continued fears over the potential of an imminent recession. But while dealers may be paying less for used cars, that doesn’t necessarily mean customers will immediately see those savings in the prices they pay.
Cox reports the average list price of a used car was $27,564 in October, which is less than half a percentage point lower than it was back in January. Between October and November, Cox says retail pricing dropped another one percent. That’s better than prices continuing to go up, but it’s still not great news unless you’re a used car dealer.
Presumably, retail pricing will eventually fall enough to get more in line with wholesale pricing, but how long that will take is still up in the air. If consumers continue to be willing to pay what dealers are charging, it may take a while.