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DETROIT – Wholesale used vehicle prices posted their largest decline last month since the beginning of the coronavirus pandemic, as prices are set to stabilize during the second half of this year.
Cox Automotive reported Monday a 4.2% decline from May to June in its Manheim Used Vehicle Value Index to 215.1. It marks the third consecutive monthly decline and one of the index’s largest monthly drops on record, according to Cox.
“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,” Chris Frey, Cox senior manager of economic and industry insights, said in a release.
The index, which tracks vehicles sold at its U.S. wholesale dealership auctions, remains elevated from historical levels but is down 10.3% compared to June 2022.
The decline could help bring used vehicle pricing down for consumers in the months to come, as retail prices traditionally follow changes in wholesale prices.
Used vehicle prices have been elevated since the early days of the coronavirus pandemic, as the global health crisis combined with supply chain issues caused production of new vehicles to sporadically idle. That led to a low supply of new vehicles and record-high prices amid resilient demand. The costs and scarcity of inventory led consumers to the used vehicle market, boosting those prices as well.
Cox Automotive expects wholesale used vehicle prices to be down roughly 1.1% at the end of this year compared to December 2022. That’s down from the company’s initial forecast of a 4.3% decline, as pricing and demand was more resilient than expected to begin the year.