For used car buyers, things get better in a hurry.
The average price of used cars fell in August, continuing an early summer decline that was briefly interrupted in July. Now the wholesale prices car dealers pay for later used cars have fallen.
Car dealers buy many used cars at auctions. Their auction prices have already fallen by 2.3% in the first 15 days of September. That comes after a 4% decline over the past month. If they pay less for used cars, they can charge less for them.
The Manheim Used Vehicle Value Index reflects the prices car dealers pay for used cars at auction. The Index is a product of Kelley Blue Book’s parent company, Cox Automotive.
Compared to August, prices fell in all market segments. Luxury cars and sports cars recorded the largest declines.
Americans have developed a new taste for fuel-efficient small cars in the face of inflation and gas price hikes in 2022. Compact cars and pickups saw the smallest price declines.
The nationwide supply of used cars has started to recover from the early pandemic lows. Dealers measure their inventory of cars for sale by a metric they call “inventory days” — how long the current vehicle inventory would last if they could no longer purchase.
Daily retail supplies used averaged 48 days in early September – just one day down from August. Used car dealers had about 48 days of supply in early September 2019, prior to the first outbreak of COVID-19.
