Wholesale used-car prices witness largest monthly drop in US

Wholesale used-car prices in the United States experienced a significant decline of 4.2 per cent from May to June, marking the largest monthly drop since the onset of the COVID-19 pandemic.

That's according to the Manheim Used Vehicle Value Index (MUVVI), which serves as a benchmark for measuring wholesale prices of used vehicles.

Commenting on the findings, Chris Frey, senior manager of economic and industry insights for Cox Automotive, said the "4.2 per cent drop is among the largest declines in MUVVI history and the largest decline since the start of the pandemic in April 2020 when the index plunged 11.4 per cent".

He added that the "year-over-year decline was also significant, with another 2.7 per cent drop compared to May's annualised 7.6 per cent decline".

"However, as mentioned last month, auction prices were lower in the fall of last year, and we anticipate that these year-over-year changes will diminish in the coming months as the market stabilises," Frey added.

The report highlighted that June's decline in prices set a new record for the month, partially influenced by seasonal adjustments. When compared to June 2022, the decrease in prices for pickups and vans was relatively less severe, at 6.6 per cent and 8.5 per cent respectively, compared to the overall industry.

Sports cars experienced the most substantial decline, with prices dropping by 14.8 per cent compared to the previous year. Compact cars and midsize cars also witnessed significant drops, each declining by over 12 per cent since June 2022. 

The report also highlighted a decline in used vehicle retail sales in June, with a 4 per cent decrease compared to May, and an estimated 6 per cent decrease compared to the same period last year.

Since the onset of the pandemic in 2020, used car prices have experienced a surge, with prices soaring by 40 per cent to an average of nearly $29,000 between early 2020 and May of this year, according to the Associated Press.