Used Car Prices Hit Three-Year High

According to Cox Automotive’s Manheim Used Vehicle Value Index - a tracker monitoring the prices of used vehicles sold at its US wholesale auctions - used car prices are on the rise, and have already hit a three-year high. Prices jumped 6.2 percent last month compared to a year earlier. The data indicate that demand remains strong despite high gas prices and struggling consumers.

While wholesale prices aren't what buyers are paying at lots or in private party sales, they're a strong indicator of supply and demand. Moreover, Cox reported that days' supply for used vehicles fell below 40 days in March. The supply of used vehicles measured in days is another key metric, and is based on the estimated daily retail sales rate for the most recent 30-day period.

“We thought we’d see some impact from the Middle East conflict, and that may still happen. But right now, the data is clear: used-vehicle demand is healthy and inventory levels are relatively tight,” Cox Automotive’s chief economist, Jeremy Robb, told media.

Another factor constantly influencing the cost of used vehicles is the cost of new ones. In February, before the Supreme Court struck down some Trump tariffs, a joint poll from ABC News, the Washington Post, and Ipsos illustrates what so many Americans are feeling: that the cost of essentials is too high. Cars are among those essentials for a majority of Americans; 74 percent of those polled also agreed that new vehicles are “unaffordable.”

“Stronger retail demand continues to be supported by new vehicle affordability pressures that are pushing consumers toward used vehicles, while lower new-vehicle sales are constraining trade-in volumes and limiting supply into the used market,” Cox said. Pricey new vehicles have traditionally pushed most Americans into the used market, and for now at least, Cox says things should stay stable beyond this year's early spike.