Dealers buy many of the used cars they sell at wholesale auctions. The prices they pay at auction govern the prices they set for you and me.
Wholesale prices rose slightly in November. They sit about 0.2% higher than a year ago, meaning used car prices continue their slow climb even as new car prices continue to see heavy discounts this season.
Related: Is Now the Time To Buy, Sell, or Trade-in A Car?
The Manheim Used Vehicle Value Index tracks the prices that car dealers pay at used car auctions to restock their lot. It’s published by Kelley Blue Book parent company Cox Automotive, which also owns auction giant Manheim.
Wholesale price changes tend to become retail price changes after six to eight weeks.
Car dealers entered November with about 6% fewer cars on lots than a year ago. The supply of used vehicles remains slightly thin, and may for several years. Between 2020 and 2022, automakers built about 8 million fewer cars than they otherwise would have. Many Americans who routinely rolled one car lease into another every three years stopped that practice, buying their off-lease car at lower pre-pandemic prices.
That one-two punch slowed the feed of used cars dealers depend on to restock. That’s still affecting prices, says Cox Automotive Senior Director of Economic and Industry Insights Jeremy Robb. “Tight supply in wholesale and retail markets will support healthy dealer demand through the final month of the year.”
Consumers continue to recover their confidence slowly. The Conference Board Consumer Confidence Index increased 2.8% in November, which was about as expected, and October’s index was revised higher. Consumers’ views of the present and of the future both improved. Consumer confidence was up 10.6% year over year. Plans to purchase a vehicle in the next six months declined slightly in October but remained much higher year over year.
