Wholesale used vehicle prices jump as inventory drops
Add Axios as your preferred source to
see more of our stories on Google.
Wholesale used car prices hit their highest point in nearly three years in March amid strong demand and limited inventory.
Why it matters: With economic uncertainty swirling, car buyers are seeking out alternatives to new vehicles, whose price tags are now averaging more than $49,000.
Driving the news: Cox Automotive's Manheim Used Vehicle Value Index rose 6.2% in March compared with a year earlier, marking its highest point since summer 2023.
- Values also increased 1.4% month over month — "a jump well above long-term norms," according to Cox.
- The non-seasonally adjusted average wholesale price for used vehicles was $20,102 in March, according to Manheim. Average list prices topped $25,000, though that doesn't reflect actual transaction prices.
How it works: Dealers acquire vehicles at wholesale prices — typically via auction — and then use that to set retail prices for consumers.
Zoom in: On used car lots, inventory fell to 40 days' supply in March, its lowest point this year, signaling healthy demand.
- "While affordability constraints remain a limiting factor for many buyers, the combination of steady demand and constrained supply helped keep used vehicle retail pricing firm through the first quarter and buying activity healthy," Cox reported.
- One unexpected boost to sales is coming from higher-than-average tax refunds, according to Cox.
Yes, but: Prices are still down from their all-time high in 2022, when demand spiked as the market grappled with limited inventory of new vehicles.
- Wholesale used vehicle prices reached a record of $22,902 in May 2022.
What to watch for: Whether economic turmoil from the war in Iran — including rising energy prices — reshapes the market for used vehicles.
- "We thought we'd see some impact from the Middle East conflict, and that may still happen," Cox Automotive chief economist Jeremy Robb said in an analysis.
Disclosure: Cox Automotive is part of Cox Enterprises, which also owns Axios.
