WASHINGTON, D.C. – Following intensely – and unusually – strong demand in January, prices of pre-owned vehicles in the United States have surged to their highest wholesale value level since last 2021, a new report indicates.
New data released on Tuesday by Cox Automotive show that used car values jumped 2.5 percent from December 2022 and January 2023, representing the largest month-over-month increase since pre-owned market values went up 3.9 percent between October and November 2021.
However, Cox’s Manheim Used Vehicle Value Index data shows that the overall used market as of January is down 12.8 percent when compared to the same period of time one year prior, indicating that the vastly inflated pre-owned vehicle prices that had been dominating the market due to supply chain issues brought about by the pandemic have begun to subside to more sustainable levels.
While used prices were at their highest, Cox noted that purchases declined 15 percent in 2022 as prospective buyers were holding off in hopes of prices coming down in 2023. However, January saw an unusually high degree of demand for pre-owned vehicles, driving the corresponding surge in wholesale values and prices.
According to the most recent data available, the average listed price of a used vehicle in December 2022 was $27,143, which represented a drop of 4 percent year-over-year; this was ample evidence, the firm said, that the used cars market was in the process of stabilizing.
And, given the fact that retail vehicle sale prices typically remain in-step with wholesale prices, this also indicates that new car prices have begun to stabilize as well going into 2023, generating hope that the market overall will be approaching its pre-pandemic “normal” level soon.
Both new and used vehicle prices spiked during the pandemic as supply chain issues – especially in terms of electronics – caused a worldwide car shortage that, in turn, drove record-breaking price hikes due to scarcity issues.
Christopher Boyle is an investigative journalist, videographer, reporter and writer for SEARCHEN NETWORKS® 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.