Used Vehicles Projected to be 1.1% Cheaper by End of Year

used cars

The retail prices of used vehicles may soon be on the decline.

After the largest decline in wholesale prices last month since the pandemic began, prices are set to stabilize in the second half of the year, potentially reducing retail used vehicle pricing for consumers in the months to come, CNBC reported Monday (July 10).

According to Chris Frey, senior manager of economic and industry insights at Cox Automotive, “buyers at auction look to have taken an early summer break, and while used retail inventory has been improving over the last several weeks, we are expecting less volatility in wholesale price movements through year-end,” per the report.

Jonathan Smoke, senior economist at Cox Automotive, added that the situation is “now at a turning point where the market returns to more balance and that balanced market is likely to deliver small but predictable changes in sales and less news about big changes in prices.”

Smoke added that the rate of decline in the remaining months of the year is not expected to be “like we saw in the spring,” with used vehicle prices projected to fall roughly 1.1% at the end of this year compared to December 2022.

Used car prices saw their first month-over-month decline this year in April, declining 3% compared to March after having increased 8.6% through the first quarter from December 2022, Manheim reported in May.

There was a year-over-year decline in April, too, continuing an eight-month-long series of such declines, according to the report.

An auto sales slump could be a crisis of the sector’s own making, PYMNTS reported May 12, referencing a Bureau of Labor Statistics (BLS) study analyzing the part auto dealers’ markups played in the new car price tag inflation during the post-pandemic recovery.

The study found these markups to be a prime driver behind new-vehicle inflation impacting consumers over the prior three years.

Consumers’ purchasing hesitancy amid inflation has also extended into used cars, the BLS report said.