The wholesale prices used car dealers pay at auction for the used cars that fill their lots declined in May. Wholesale price changes usually become retail price changes after six to eight weeks. So, the drop probably means lower prices for used car shoppers later this summer.
The Manheim Used Vehicle Value Index is a product of Kelley Blue Book parent company Cox Automotive. It fell to 197.3, a 12.1% decline from a year ago.
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Used car dealers listed the average car for $25,571 in April. That represented a tiny increase – just $31 – from the month before. A further increase might come in the short term, as wholesale prices ticked up slightly about a month ago. However, any increase will likely be short-lived.
“It’s seasonally normal to get some weakening in the market over the Memorial Day weekend,” says Jeremy Robb, Senior Director of Economic and Industry Insights at Cox Automotive. “But this month, we experienced a little more softening in the final week.”
Every used car segment has seen its wholesale price fall this year, but pickup trucks and luxury cars have fallen less than the industry average. The best deals are in the compact car segment, where dealers pay 17.4% less than a year ago. Midsize cars aren’t far behind, at 16.3%.
