Used car prices are high, but expected to stabilize in 2024

Used cars for sale at Lee Auto Mall on Wednesday, August 16, 2023. (Staff photo by Brianna Soukup/Portland Press Herald via Getty Images)

Brianna Soukup | Portland Press Herald | fake images

DETROIT – Used vehicle prices are expected to stabilize this year, after buyers of used cars and trucks got more relief in 2023 following a streak of record prices.

Automotive data firm Cox Automotive expects wholesale prices in its Manheim Used Vehicle Value Index, which tracks the prices of used vehicles sold at its U.S. wholesale auctions, to end 2024 just up 0.5% more than December 2023. Prices will fluctuate month to month due to sales. seasonality and other factors, according to Cox.

The slight increase would compare with a 7% decline in 2023 and a nearly 15% drop in 2022 due to inflated prices during the coronavirus pandemic. At that time, new vehicle availability fell to historic lows due to supply chain and parts issues that disrupted vehicle production.

“2024 appears to be less volatile than 2023, but we have been taught to expect the unexpected in the wholesale market,” Jeremy Robb, senior director of economic and industry insights at Cox Automotive, said in a statement.

Stability is a win for potential car buyers. However, used vehicle prices remain higher than before the pandemic. Retail prices for consumers traditionally follow changes in wholesale prices, but have not fallen as rapidly as wholesale prices in recent years.

Cox reports that the average listing price for a used vehicle was $26,091 last month, down 3.9% from a year ago and down 7.5% from about $28,200 at the end of 2021. Average listing prices for used vehicles ​They were less than $20,000 in 2019, according to Cox.

Used Vehicle Sales Expected to Increase in less than 1% to 36.2 million, according to Cox Automotive. That forecast includes 19.2 million in retail sales of used vehicles.

The forecasted sales of used vehicles compare with a “pessimistic” forecast of a 1.3% increase for new cars and trucks in the US this year to 15.7 million units, according to Cox.

“For the economy and the auto market, we're looking at only 1% to 2% growth, but the growth outpaces the recession,” Jonathan Smoke, chief economist at Cox Automotive, said Monday during a call. “As we move into 2024, new supply returns to spring 2020 levels, which favors consumers and leads to lower prices.”

Meanwhile, Cox expects sales of all-electric vehicles to rise and account for more than 10% of retail sales of new cars and trucks in 2024. That would compare with 1.1 million units, or 7.4% of retail sales, sold in 2023.

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