Used Car Prices Forecasted To Stabilize in 2024

After a two-year decline from record highs, used vehicle prices are expected to creep back up to stabilize this year, reports CNBC.

Data firm Cox Automotive predicts that wholesale prices on its Manheim Used Vehicle Value Index, which measures prices of used vehicles sold at its U.S. wholesale auctions, will end 2024 only 0.5% steeper than in December 2023. Monthly variations are expected due to seasonal selling patterns as well as other factors.

This small increase would contrast with a 7% decline in 2023 and an almost 15% decrease in 2022, coming down from sky-high prices during the COVID-19 pandemic. During the pandemic, new car availability dropped to record lows as a result of issues with parts and the supply chain impacting the production of automobiles.

In a press release, Jeremy Robb, Cox Automotive’s senior director of economic and industry insights, said, “2024 is looking to be less volatile than 2023, but we’ve been taught to expect the unexpected in the wholesale market.”

While prices stabilizing benefits potential car buyers, used vehicle prices remain higher than they were pre-pandemic. Consumer retail prices typically align with changes in wholesale prices, but they have not dropped as rapidly in recent years.

In a call on Monday, Jonathan Smoke, Cox Automotive’s chief economist, said, “For the economy and the auto market, we’re in for just 1% to 2% growth, but growth beats a recession. As we enter into 2024, new supply is back to spring 2020 levels, which favors consumers and leads to lower prices.”

Cox Automotive anticipates a slight rise of less than 1% in used vehicle sales, reaching 36.2 million, with 19.2 million attributed to used vehicle retail sales. This compares with “a ‘pessimistic’ forecast of a 1.3% increase for new cars and trucks in the U.S. this year to 15.7 million units, according to Cox.”