Auctions in April saw a 14% depreciation in the prices dealers paid for used vehicles compared to the same period last year. This could be an advantageous trend for prospective buyers as fluctuations in wholesale prices typically translate to retail adjustments around six to eight weeks later.
During the spring season, used car dealers faced lower inventory levels than usual, yet this scarcity did not trigger an upward trend in pricing. Considering dealers can replenish their stock at reduced costs, this trend may persist into the early summer months.
Associated: Is It a Suitable Time to Purchase, Vend, or Exchange a Vehicle?
Throughout 2024, there has been a gradual decline in the prices of pre-owned vehicles. While there was a slight increase in March, prices remained below those of the previous year. A rise in prices during March is a regular occurrence as tax refunds reach consumers, prompting many to explore the used car market.
Last month, all major segments of the automotive market recorded decreased wholesale values. Notably, compact cars experienced the most significant decline, dropping by 17.6% compared to April 2023. Luxury used cars, on the other hand, saw the smallest drop, with prices 12.9% lower than a year ago.
Despite the reduced prices, there is a lack of widespread anticipation among Americans to engage in used car shopping in the near future. The Consumer Confidence Index published by The Conference Board saw a 5.9% dip in April, reflecting diminished outlooks on both the current economic climate and the foreseeable future. Year over year, consumer confidence saw a decrease of 6.5%. Although plans to acquire a vehicle within the next six months dipped slightly from the previous month, they remained higher than a year prior.
This data is sourced from the Manheim Used Vehicle Value Index, a division of Cox Automotive, akin to Kelley Blue Book.