WASHINGTON, D.C. – Wholesale prices of pre-owned vehicles in the United States increased for the third consecutive month in a row in February, sending a clear signal to consumers planning to shop around for a used car this upcoming spring that the market will unfortunately be more expensive than they may have been hoping for.
According to a new report by Cox Automotive released on Tuesday, wholesale used vehicle prices jumped 4.3 percent in February from the prior month, which represents the biggest month-to-month increase in the industry since 2009.
Despite the third month in a row of price increases, the used market overall is down 7 percent from February 2022, a period of time when supply chain issues driven by the COVID-19 pandemic caused pre-owned prices to swell to record levels. But while today’s figures are currently below that inflated level, they are nonetheless heading back into that territory if things continue as they are.
This trend should be especially distressing to not only consumers, but also the Biden Administration, which considers pre-owned vehicle prices to be an overall indicator of the state of inflation in the country.
With that being the case, the news on Tuesday from Federal Reserve Chairman Jerome Powell that interest rates will most likely climb higher than originally forecast by central bank policymakers, noting that inflation – which lowered in late 2022 – is starting to climb once again. And with that climb comes higher costs of consumer goods and services…including used car prices and loans, unfortunately.
The average price of a pre-owned vehicle in January was $26,510, down from the high of $28,000 recorded at the same period of time last year. Sales of used vehicles dropped 5 percent in February and 9 percent year-over-year.
Using estimates of used retail days’ supply, an initial analysis indicates February ended with an approximate 41 days’ supply of vehicles on the market, down from 48 days at the end of January and 13 days lower than how February 2022, which ended at 54 days.
Christopher Boyle is an investigative journalist, videographer, reporter and writer for SEARCHEN NETWORKS® and The Published Reporter® as well as other independent news and media organizations in the United States. Christopher works on a wide variety of topics and fields, has been featured in print and online in a variety of publications, from local to national, and helps keep a keen-eye on what’s happening in the automotive world for Auto Buyers Market.