Used car prices skyrocketed during the coronavirus pandemic as plant closures, part shortages, and the microchip crisis conspired to limit production of new vehicles.
Prices finally started to cool in 2022, but they’re unfortunately increasing once again. That’s according to Cox Automotive, which found wholesale used vehicle prices – on a mix, mileage, and seasonally adjusted basis – increased 2.5% in January.
The company attributes the increase, in part, to seasonal adjustment, but noted there was an non-adjusted price change of 1.5% in January. Furthermore, while prices were up on a monthly basis, Cox pointed out that the unadjusted average price is actually down 11% compared to last year.
Also: Used Car Prices Drop For The Fourth Straight Month
While prices were up overall, prices for full-size cars and luxury cars fell in January. However, these decreases were more than offset by increases of between 0.8% and 3.6% for compact and mid-size cars as well as trucks, vans, and SUVs.
Despite higher prices, used retail sales were up 16% from December and up 5% compared to last year. This increased demand saw inventory levels drop to a 44 day supply, which is down from a 56 day supply in December and a 60 day supply in January of 2022. That’s a sizable change and it means buyers might need to do some extra research to find exactly what they’re looking for.
Looking into the future, consumers seem to be unfazed by growing concerns of economic uncertainty as the number of people planning to purchase a vehicle in the next six months was unchanged from December. That being said, the number is down slightly compared to this time last year.
