Used car prices fall for first time this year as gas prices spike
Customers browse a used car lot on February 15, 2023 in Glendale, California.
Mario Tama | Getty Images News | Getty Images
DETROIT — Used car prices fell last month for the first time since October as gasoline prices rose amid the war in Iran.
Cox Automotive Manheim Second Hand Vehicle Value Index – which tracks prices of used vehicles sold at wholesale auctions in the United States – fell 1.6% last month from March and rose 1.8% from the same month a year ago.
Affordability remains a key concern for buyers, resulting in increased demand for older vehicles and fully electric vehicles at Manheim auctions, Cox said.
Gas prices at the end of April were up $1.12 per gallon from a year ago, above the national average of $4.30 per gallon. to AAA. They have continued to rise since then, reaching the national average of $4.56 on Thursday.
“The conflict in the Middle East has been going on for two months, and while energy prices fell slightly in mid-April, they are on the rise again: the price of gas has reached its highest level for the year and is up 47% since the end of February,” Jeremy Robb, chief economist at Cox Automotive, said in a statement. “These higher prices are sucking a lot of the extra money out of consumers’ pockets, and there’s no end in sight right now.”
Retail prices to consumers traditionally follow changes in wholesale prices; Cox predicts it will increase by about 2% this year, at a historically steady rate. The average list price for a used vehicle was $25,390 as of March, according to Cox. This is up nearly $100 from February.
The average list price of a used EV remains more than $9,200 higher than the general market, but new and used vehicle retailers said the rapid increase in gas prices following a slowdown last year following the end of federal incentives by the Trump administration has led to higher EV sales.
Manheim’s electric vehicle index increased by 7.2% on an annual basis and by 1.4% compared to March.
April’s lower prices follow a strong spring sales season, boosted by many consumers spending higher tax refunds to buy or finance used vehicles, Cox said.
