A man shops for used vehicles at the Deerfield Toyota dealership in Deerfield Beach, Florida.
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DETROIT — Stronger-than-expected demand for used vehicles last month led to the biggest jump in wholesale values since late 2021, according to new data Tuesday from Cox Automotive.
Automotive data firm’s Manheim Used Vehicle Value Index fell 12.8% in January from inflated levels a year earlier, but rose 2.5% from December. It was the biggest month-over-month increase since a 3.9% jump from October to November 2021.
The bigger-than-expected rise in the index, which tracks the prices of used vehicles sold at its U.S. wholesale auctions, was partly the result of abnormally high demand, Cox said.
Used vehicle prices have increasingly become a point of interest for investors and the Biden administration as a barometer of easing inflation. Early last year, the administration blamed much of the rising inflation rates in the country on the used-vehicle market.
The Manheim Used Vehicle Value Index fell 15% last year as buyers delayed buying a used vehicle due to record prices.
Cox reports that the average list price for a used vehicle was $27,143 in December, the most recent data available, down nearly 4% from a year earlier. Retail prices for consumers traditionally follow changes in wholesale prices.
The research firm said last month that the used-vehicle market had stabilized, resembling its pre-pandemic normal, with inventories flat and prices falling from record highs. It projects wholesale prices on its Manheim Used Vehicle Value Index to end 2023 down 4.3% from December 2022.
Used vehicle prices have risen since the start of the coronavirus pandemic as the global health crisis, combined with supply chain issues, has caused sporadic inactivity in new vehicle production. This resulted in a low supply of new vehicles and record prices amid resilient demand. Prices and the scarcity of inventory pushed consumers to buy used vehicles, which also increased these prices.
