The covid pandemic and resulting lockdowns issued a knockout blow to auto buyers, who saw used-car prices skyrocket.
From January 2021 to January 2022, for example, used-car and -truck prices rose an average of 40.5%, according to the U.S. Bureau of Labor Statistics.
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But that was then and this is now, and auto consumers are finally seeing some slivers of sunlight in summer 2023.
Used-vehicle data show U.S. wholesale used-vehicle prices fell 4.2% in June, according to the Manheim Used Vehicle Value Index, a brand of Cox Automotive.
Meanwhile. used-auto prices fell 10.1% in the first half. And used-vehicle prices have fallen for three straight months.
The primary factor for the price drop: Global supply chains are stabilizing, which is moving vehicles and auto parts at a faster clip in mid-2023, the Manheim Report stated.
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'Inventory Balanced Between Supply and Demand'
The outlook for both new and used cars and trucks looks promising.
“The wholesale market story for the first half of 2023 can be summed up in one word: volatile,” said Cox Automotive Chief Economist Jonathan Smoke.
“The result, however, is not unexpected. Larger upswings during the first quarter and a downward trajectory that began in the second half of March have brought us to roughly where we expected to be at this point in the year.
"The good news is that the worst of this is likely behind us. Used retail sales held steady in June and are showing signs of strengthening – inventory levels are generally balanced between supply and demand.”
Sports vehicles saw the largest price declines, 14.8%, from June 2022 to June 2023. Pickup-truck and van prices slid 6.6% and 6.8% respectively. Compact and midsize vehicles fell 6.6% and 6.7%.
All in all, vehicle consumers should see prices ease as supply chain issues ease and demand for used cars and trucks remains relatively low.
“End-of-year expectations for the Manheim Used Vehicle Value Index [which tracks car prices] have been downwardly revised, mainly based on the decreases already seen year to date,” the report noted. “Instead of being up 1.6%, Cox Automotive now forecasts the [index] will be down 1.1% year over year in December.”
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