Used Vehicle Prices Again Reach New Highs
We’ve talked about it many times now: used vehicles—including yours—have gained plenty of value this year as new vehicle inventory problems continue to affect dealers.
New vehicle sales have dropped, but so has the number of trade-ins, leaving dealers with 25 percent fewer used vehicles in their lots, J.D. Power reported in August. This, combined with strong consumer demand, resulted in prices increasing 8 percent on average.
- Also: New Cars Are Selling at Record Prices, Flying Off Dealer Lots
- Also: How to Sell Your Car Quickly at the Right Price
However, since the summer, new highs have been reached month after month.
Consider this: Cox Automotive's Manheim Used Vehicle Value Index for the U.S. jumped 3.9 percent from October to November, and a whopping 44 percent compared with November 2020.
Similar increases can be seen in Black Book’s Used Vehicle Retention Index, which rose to 189.9 points last month—up 5.4 percent from October and 45 percent above where it was in November 2020. Wholesale prices across all vehicle segments reached record levels in November.
Fear What’s Next?
What will the used vehicle market look like in the next couple of months? Analysts don’t quite see things in the same way.
“Prices are probably going to stay about where they are—or the index is going to stay about where it is—through the end of the year," Cox Automotive Chief Economist Jonathan Smoke told Automotive News.
Meanwhile, Black Book Chief Data Science Officer Alex Yurchenko believes that used vehicle prices will increase again in December, although at a much lower rate. Why? Because new vehicle inventories are starting to improve and consumer demand is softening due to the record-breaking used prices at retail.
