Used cars are finally getting a little cheaper, according to Cox Automotive. After what seemed like an interminable series of price hikes across all vehicle segments, used prices are going down. The only caveat is that pickup trucks are trending in the other direction and are getting slightly more expensive instead.
In 2023, used car prices have declined by about four percent overall. The prices of used compacts, midsize and luxury cars is down, as well as that of minivans.
Even used SUVs are getting cheaper, which points to a cooling market for sport utility vehicles. That’s surprising in light of their recent popularity, but it seems trucks have overtaken SUVs on used lots. At least, based on the prices of used cars reported by Cox Automotive’s Manheim Index:
The Manheim Used Vehicle Value Index (MUVVI) stabilized to end the third quarter with a steady September, following a period of fluctuation with declines in the first half of the year and rebounding values in Q3.
Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) increased 1.0% in September from August. The Manheim Used Vehicle Value Index rose to 214.3 in September, down 3.9% from a year ago.
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The major market segments saw seasonally adjusted prices that were mostly lower year over year in September. Compared to September 2022, vans and SUVs lost less than the industry, down 2.3% and 3.5%, respectively. Compact cars again performed the worst year over year, down 9.9%, followed by luxury, down 6.7%, and midsize cars, down 5.9%. Pickups were up 0.7%, better than the industry and the only positive year-over-year performer.
From the perspective of dealers, used trucks have fared better than most other segments. Crossovers are notably absent from the Manheim report, but used cars in general have seen prices dip, which could come as a relief for those (im)patiently waiting for the used market to go back to pre-pandemic pricing.
People are holding on to their cars for longer, which is why used supply has still not rebounded, but it’s likely supply and pricing will not rebound and result in dramatically cheaper used cars in the short term, as Business Insider reports.
It might be too early to say that used cars will ever return to prepandemic prices, and those waiting for trucks to get cheaper will have to keep waiting because they don’t seem to be going down in price any time soon. Used pickup prices may only have increased by a modest 0.7 percent, but that’s an increase nonetheless.
The average price of used vehicles is at $26,717, which represents a small decrease, according to Business Insider. Used car supply is getting better than it was in 2020 and 2021 at the height of the pandemic, but supply is still constrained. Used inventory is at 47 days’ supply, which is less than the same time last year when used inventory was at 54 days’ supply.