Good news for used car buyers: prices, which have shot up in recent months, have started to come down — at least at the wholesale level, according to the consulting arm of the big used car auction houses.
Manheim Consulting’s index of used car values dipped in October, its first decline since December 2008 when the index hit an all-time low. In the months since that December low, the index has climbed steadily, reaching an all-time high in September. Prices dropped for trucks (-5.2%), full-size cars (-10.2%) and midsize cars (-5.4%).
The autumn typically sees a reduction in used car sales. Factoring in a seasonal adjustment the index dipped 0.9% overall in October. Without that adjustment, it dropped 4.4%. “Given that wholesale prices had reached record levels, October’s pullback was neither unexpected nor alarming. In fact, if there is no free fall in values or a plunge in conversion rates, the moderation in pricing should be welcomed, ” Manheim said.
The increase in new car sales has brought in more fresh trade-ins. That has increased the stock of used cars. With used car sales still soft, inventories have increased which is leading to lower prices.This combined with lower used car sales has meant a high inventory, and lower prices.
